E6-6 On December 1, Discount Electronics has three DVD players left in stock. All are identicaland priced to sell at $750. Of the three DVD players left in stock, one with serial #1012 was pur-chased on June 1 at a cost of $500, another with serial #1045 was purchased on November 1 for$450. The last player, serial #1056, was purchased on November 30 for $400.Instructions(a) Calculate the cost of goods sold using the FIFO periodic inventory method, assuming thattwo of the three players were sold by the end of December, Discount Electronics' year end.(b) If Discount Electronics used the specific identification method instead of the FIFO method,how might it alter its income by "selectively choosing" which particular players to sell to thetwo customers? What would Discount's cost of goods sold be if the company wished to max-imize income? What would Discount's cost of goods sold be if the company wished to mini-mize income?(c) Which inventory method do you recommend that Discount use? Explain why.

The company calculates the cost of goods sold by adding the opening inventory and purchases and…

E6-6 On December 1, Discount Electronics has three DVD players left in stock. All are identical and priced to sell at $750. Of the three DVD players left in stock, one with serial #1012 was pur- chased on June 1 at a cost of $500, another with serial #1045 was purchased on November 1 for $450. The last player, serial #1056, was purchased on November 30 for $400.

E6-6 On December 1, Discount Electronics has three DVD players left in stock. All are identical and priced to sell at $750. Of the three DVD players left in stock, one with serial #1012 was pur- chased on June 1 at a cost of $500, another with serial #1045 was purchased on November 1 for $450. The last player, serial #1056, was purchased on November 30 for $400.

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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On May 10, Hudson Computing sold 90 Millennium laptop computers to Apex Publishers. At the date of this sale, Hudson’s perpetual inventory records included the following cost layers for the Millennium laptops. Purchase Date Quantity Unit Cost Total Cost Apr. 9 70 $ 1,500 $ 105,000 May 1 30 $ 1,600 48,000 Total on hand 100 $ 153,000 Prepare journal entries to record the cost of the 90 Millennium laptops sold on May 10, assuming that Hudson Computing uses the following. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. Specific identification method (62 of the units sold were purchased on April 9, and the remaining units were purchased on May 1). b. Average-cost method. c. FIFO method. d. LIFO method
DS Unlimited has the following transactions during August. August 6 Purchases 70 handheld game devices on account from GameGirl, Inc., for $200 each, terms 1/10, n/60. August 7 Pays $400 to Sure Shipping for freight charges associated with the August 6 purchase. August 10 Returns to GameGirl six game devices that were defective. August 14 Pays the full amount due to GameGirl. August 23 Sells 50 game devices purchased on August 6 for $220 each to customers on account. The total cost of the 50 game devices sold is $10,212.50. Required: Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system.
Salieri Company purchased 70 keyboards on account for $25 each from Amadeus, Inc. When they unpacked the keyboards, Salieri found that 50 of the keyboards were damaged in shipping. What is the journal entry that Salieri will make to record the purchase return? OA. Debit Accounts Payable - Amadeus and credit Inventory, $1,250. 00 B. Debit Purchase Returns and credit Inventory, $1,250. OC. Debit Purchase Returns and credit Inventory, $1,750. O D. Debit Accounts Payable - Amadeus and credit Inventory, $1,750.
On March 30, Century Link received an invoice dated March 28 from ACME Manufacturing for 67 televisions at a cost of $150 each. Century received a 15/7/4 chain discount. Shipping terms were FOB shipping point. ACME prepaid the $127 freight. Terms were 2/10 EOM. When Century received the goods, 2 sets were defective. Century returned these sets to ACME. On April 8, Century sent a $195 partial payment. Century will pay the balance on May 6. What is Century’s final payment on May 6? Assume no taxes. (Do not round intermediate calculations. Round your answer to the nearest cent.)
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GameGirl, Incorporated, has the following transactions during August. August 6 Sold 60 handheld game devices for $150 each to DS Unlimited on account, terms 3/10, net 60. The cost of the 60 game devices sold was $130 each. August 10 DS Unlimited returned four game devices purchased on August 6 since they were defective. August 14 Received full amount due from DS Unlimited. Required:Prepare the transactions for GameGirl, Incorporated, assuming the company uses a perpetual inventory system. The items returned on August 10 were considered worthless to GameGirl and were discarded. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
E6.5 (LO 2), AP Mather sells a snowboard, EZslide, that is popular with snowboard enthusiasts. The following is information relating to Mather's beginning inventory and purchases of EZslide snowboards during September. During the same month, 102 EZslide snowboards were sold. Mather uses a periodic inventory system. Date Unit Cost Sept. 1 Sept. 12 Sept. 19 Sept. 26 Explanation Inventory Purchases Purchases Purchases Totals Units 12 45 50 20 127 $100 103 104 105 Total Cost $1,200 4,635 5,200 2,100 $13,135 Instructions Compute the ending inventory at September 30 and the cost of goods sold using the FIFO, LIFO, and average-cost methods. (For average-cost, round the weighted-average unit cost to three decimal places.) Prove the amount allocated to cost of goods sold under each method. Calculate inventory and cost of goods sold using FIFO, average-cost, and LIFO in a periodic inventory system.
At the beginning of June, Circuit Country has a balance in inventory of $2,650. The following transactions occur during the month of June. June 2 Purchase radios on account from Radio World for $2,350, terms 2/15, n/45. June 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $330. June 8 Return defective radios to Radio World and receive credit, $300. June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $4,300, that had a cost of $2,850. June 18 Receive payment on account from customers, $3,300. June 20 Purchase radios on account from Sound Unlimited for $3,450, terms 2/10, n/30. June 23 Sell radios to customers for cash, $4,950, that had a cost of $3,250. June 26 Return damaged radios to Sound Unlimited and receive credit of $400. June 28 Pay Sound Unlimited in full.
ok DS Unlimited has the following transactions during August. August 6 Purchases 52 handheld game devices on account from GameGirl, Incorporated, for $110 each, terms 2/10, n/60. August 7 Pays $310 to Sure Shipping for freight charges associated with the August 6 purchase. August 10 Returns to GameGirl seven game devices that were defective. August 14 Pays the full amount due to GameGirl. August 23 Sells 32 game devices purchased on August 6 for $130 each to customers on account. The total cost of the 32 game devices sold is $3,670.00. Required: Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to 2 decimal places.)
8. Auto Dealers Incorporated sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the beginning of 2024, Auto Dealers had three cars in inventory, as follows: Car ID Cost 203 RM 90,000 207 210 During 2024, each of the three autos sold for RM120,000. Additional purchases (listed in chronological order) and sales for the year were as follows: Car ID Cost 211 RM 90,000 212 90,000 213 91,500 214 93,000 215 96,000 94,500 99,000 216 217 218 219 90,000 93,000 96,300 102,000 Selling Price RM 120,000 123,000 not sold 126,000 130,500 not sold 135,000 136,500 not sold Required: Calculate ending inventory and cost of goods sold assuming: a. FIFO and a periodic inventory system. b. FIFO and perpetual system
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