**How to Journalize the Purchase of Merchandise Inventory on Account**When a business purchases merchandise inventory on account, it must record the transaction in its accounting journal. Follow these steps to properly journalize this transaction, referencing the provided example:### Example Transaction DetailsOn September 8th, the business purchased merchandise inventory on account. The entry to record this transaction would be structured as follows:#### Journal Entry as of September 8th:1. **Date** - September 8th2. **Accounts and Explanation** - Debit: Merchandise Inventory - Credit: Accounts Payable - Explanation: This entry is to record the purchase of merchandise inventory on account.3. **Journal Entry Format**| Date | Accounts and Explanation | Debit | Credit ||-----------|---------------------------------------------------------|--------|--------|| Sep. 8 | Merchandise Inventory | | || | Accounts Payable | | || | *To record purchase of merchandise inventory on account.* | | |### Explanation of the Entry- **Merchandise Inventory** is debited because the business has acquired this asset. When inventory is purchased, it increases the asset account.- **Accounts Payable** is credited because the purchase was made on account, meaning the business now owes money to the supplier. This increases the liability account.By following this format, you ensure that the financial records accurately reflect the transaction and adhere to accounting principles. ### Inventory and Cost of Goods Sold Analysis Using LIFO Method#### Inventory Table:The following table demonstrates the purchases, cost of goods sold, and inventory on hand over the course of a month, broken down by specific dates.**Purchases:**| Date | Quantity | Unit Cost | Total Cost ||-------|----------|-----------|------------|| Sep. 1 | | | || Sep. 6 | | | || Sep. 8 | 20 | $74 | $1,480 || Sep. 17 | | | || Sep. 30 | | | || **Totals**| **20** | | **$1,480** |**Cost of Goods Sold:**| Date | Quantity | Unit Cost | Total Cost ||-------|----------|-----------|------------|| Sep. 1 | | | || Sep. 6 | 7 | $68 | $476 || Sep. 8 | | | || Sep. 17 | 20 | $74 | $1,480 || Sep. 30 | 5 | $68 | $340 || **Totals**| **32** | | **$2,296** |**Inventory on Hand:**| Date | Quantity | Unit Cost | Total Cost ||-------|----------|-----------|------------|| Sep. 1 | 17 | $68 | $1,156 || Sep. 6 | 10 | $68 | $680 || Sep. 8 | 10 | $68 | $680 || Sep. 8 | 20 | $74 | $1,480 || Sep. 17 | 10 | $68 | $680 || Sep. 30 | 5 | $68 | $340 || **Totals**| **5** | | **$340** |#### Discussion:1. **Identify the cost of ending inventory for the month.** - The cost of ending inventory using the LIFO method is $340.2. **Identify the cost of goods sold for the month.** -

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Description: **How to Journalize the Purchase of Merchandise Inventory on Account**When a business purchases merchandise inventory on account, it must record the transaction in its accounting journal. Follow these steps to properly journalize this transaction, r

When a company purchases material on account the journal entry can be posted by increasing the…

Business

Accounting

Date Sep. 1 Sep. 6 Sep. 8 Sep. 17 Sep. 30 Totals Quantity Purchases Unit Cost 20 Total Cost 20 $ 74 $ 1,480 $ 1,480 Cost of Goods Sold Unit Quantity Cost Identify the cost of ending inventory for the month. The cost of ending inventory using the LIFO method is Identify the cost of goods sold for the month. The cost of goods sold using the LIFO method is 7 $ 20 $ 5 $ 32 $ 2,296 68 $ 74 $ 68 $ $ 340 Total Cost 476 1,480 340 2,296 Inventory on Hand Unit Quantity Cost 17 $ 10 $ 10 $ 20 $ 10 $ 5 $ 5 Total Cost 68 $ 1,156 68 $ 680 68 $ 74 $ 68 $ 68 $ GA 680 1,480 680 340 340

Date Sep. 1 Sep. 6 Sep. 8 Sep. 17 Sep. 30 Totals Quantity Purchases Unit Cost 20 Total Cost 20 $ 74 $ 1,480 $ 1,480 Cost of Goods Sold Unit Quantity Cost Identify the cost of ending inventory for the month. The cost of ending inventory using the LIFO method is Identify the cost of goods sold for the month. The cost of goods sold using the LIFO method is 7 $ 20 $ 5 $ 32 $ 2,296 68 $ 74 $ 68 $ $ 340 Total Cost 476 1,480 340 2,296 Inventory on Hand Unit Quantity Cost 17 $ 10 $ 10 $ 20 $ 10 $ 5 $ 5 Total Cost 68 $ 1,156 68 $ 680 68 $ 74 $ 68 $ 68 $ GA 680 1,480 680 340 340

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Date January 1 May 5 November 3 Weighted Average Transaction Beginning inventory Purchase Purchase Cost Beginning Inventory Purchases: May 5 November 3 Total Calculate ending inventory and cost of goods sold for the year, assuming the company uses weighted-average cost. (Round your average cost per unit to 4 decimal places.) Number of units Number of Units 60 Cost of Goods Available for Sale 60 Average Cost per unit 220 140 420 Cost of Goods Available for Sale $ 220 140 420 $33,700.0000 $ Unit Cost $76 4,560 79 84 17,380 11,760 33,700 Total Cost $4,560 17,380 11,760 $33,700 Cost of Goods Sold - Weighted Average Cost Number of units sold Average Cost per Unit Cost of Goods Sold 375 $30,280.0000 $ 11,355,000.00 Ending Inventory - Weighted Average Cost Number of units in ending inventory Average Cost per unit 45 $ Ending Inventory 3,420.0000 $ 153,900.00
Jasper & Williams made purchases of a particular product In the current year as follows: 1 Beginning inventory 7 Purchased Jan. 120 units e $2.10 @$2.20 @ $2.30 252 Mar. 250 units 55e July 28 Purchased 500 units 1,150 Oct. Purchased 69 units e$2.45 147 Totals 930 units $ 2,099 Assume that the specific Identification method is used to assign costs to cost of goods sold ending inventory. The units in ending Inventory were specifically identified as follows. • 80 units from beginning Inventory • 27 units from the March 7 purchase, and • 48 units from the July 28 purchase. Required: Determine the cost to be assigned to ending Inventory and cost of goods sold. (Round the final answers to 2 decimal places.) Ending inventory Cost of goods sold
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Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 14 $102 $1,428 Sept. 12 Purchases 48 105 5,040 Sept. 19 Purchases 50 106 5,300 Sept. 26 Purchases 23 23 107 2,461 Totals 135 $14,229 (a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to O decimal places, e.g. 125.) The ending inventory at September 30 $ FIFO $ LIFO $ AVERAGE COST (b) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to O decimal places, e.g. 125.) Cost of goods sold EA FIFO +A $ LIFO AVERAGE-COST $
Inventory Costing Methods Oppenheimer Inc. reported the following information for the month of May: Inventory, May 1 58 units @ $18 Purchase: Мay 7 48 units @ $20 May 18 61 units @ $21 May 27 40 units @ $22 During May, Oppenheimer sold 133 units. The company uses a periodic inventory system. Required: What is the value of ending inventory and cost of goods sold for May under the following assumptions. Assumption Cost of Goods Sold Ending Inventory 1. Of the 133 units sold, 49 cost $18, 34 cost $20, 46 cost $21, and 4 cost $22. $ 2. FIFO %$4 3. LIFO 2$ 4. Weighted average method (Round average unit cost to the nearest cent, $ and round all other calculations and your final answers to the nearest dollar.)
Given the following: Numberpurchased Costper unit Total January 1 inventory 32 $ 4 $ 128 April 1 52 6 312 June 1 42 7 294 November 1 47 8 376 173 $ 1,110 a. Calculate the cost of ending inventory using the FIFO (ending inventory shows 53 units). b. Calculate the cost of goods sold using the FIFO (ending inventory shows 53 units).
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