**Inventory Adjustments Journal Entries: Educational Example**Evergreen St. Book Shop's unadjusted Merchandise Inventory at June 30, 2024, was $5,400. The cost associated with the physical count of inventory on hand on June 30, 2024, was $4,750. In addition, Evergreen St. Book Shop estimated approximately $500 of merchandise sold will be returned with a cost of $100.**Requirements:**1. Journalize the adjustment for inventory shrinkage.2. Journalize the adjustment for estimated sales returns.---### Requirement 1: Journalize the Adjustment for Inventory ShrinkageTo record the adjustment for inventory shrinkage, follow these steps:#### Table for Journal Entry| Date | Accounts | Debit | Credit ||----------|-----------------------------|--------|--------|| Jun. 30 | Inventory Shrinkage Expense | $650 | || | Merchandise Inventory | | $650 |Explanation:- The physical inventory count was $4,750, but the unadjusted inventory was $5,400. This results in an inventory shrinkage of $650 ($5,400 - $4,750).- Debit Inventory Shrinkage Expense for $650 to account for the loss in inventory value.- Credit Merchandise Inventory for $650 to reduce the inventory value on the balance sheet.---### Requirement 2: Journalize the Adjustment for Estimated Sales ReturnsTo record the adjustment for estimated sales returns, follow these steps:#### Table for Journal Entry| Date | Accounts | Debit | Credit ||----------|-----------------------------------|--------|--------|| Jun. 30 | Sales Returns and Allowances | $500 | || | Refund Liability | | $500 || Jun. 30 | Estimated Inventory Returns | $100 | || | Cost of Goods Sold | | $100 |Explanation:- Estimated merchandise sold to be returned is $500, with a cost of $100.- Debit Sales Returns and Allowances for $500 to decrease revenue by the expected return amount.- Credit Refund Liability for $500 to acknowledge the liability for cash or credit refunds.- Debit Estimated Inventory Returns for $100 to recognize the cost of goods expected to be returned.- Credit Cost of Goods Sold for $100 to adjust the cost of goods sold downward by

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Description: **Inventory Adjustments Journal Entries: Educational Example**Evergreen St. Book Shop's unadjusted Merchandise Inventory at June 30, 2024, was $5,400. The cost associated with the physical count of inventory on hand on June 30, 2024, was $4,750. In

Inventory shrinkage: It implies to a loss of company's inventory as a result of number of factors…

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Accounting

Evergreen St. Book Shop's unadjusted Merchandise Inventory at June 30, 2024 was $5,400. The cost associated with the physical count of inventory on hand on June 30, 2024, was $4,750. In addition, Evergreen St. Book Shop estimated approximately $500 of merchandise sold will be returned with a cost of $100. Requirements 1. Journalize the adjustment for inventory shrinkage. 2. Journalize the adjustment for estimated sales returns. Requirement 1. Journalize the adjustment for inventory shrinkage. (Record debits first, then credits. Exclude explanations from journal entries.) Accounts Date Debit Credit Jun. 30

Evergreen St. Book Shop's unadjusted Merchandise Inventory at June 30, 2024 was $5,400. The cost associated with the physical count of inventory on hand on June 30, 2024, was $4,750. In addition, Evergreen St. Book Shop estimated approximately $500 of merchandise sold will be returned with a cost of $100. Requirements 1. Journalize the adjustment for inventory shrinkage. 2. Journalize the adjustment for estimated sales returns. Requirement 1. Journalize the adjustment for inventory shrinkage. (Record debits first, then credits. Exclude explanations from journal entries.) Accounts Date Debit Credit Jun. 30

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Select all that apply Merchandise Inventory, before adjustment, has a balance of $5,000. The newly counted inventory balance is $3,500. The jour remove the original balance, will include which of the following entries: credit to merchandise inventory for $5,000 credit to come summary for $5,000 debit to income summary for $5,000 debit to merchandise inventory for $5,000 Need help? Review these concept resources.
Use the first-in, first-out (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and (c) gross margin for A75 Company, considering the following transactions. Number Unit of Units Cost Beginning Inventory 110 $49 Purchased Mar. 2 170 51 Sold Mar. 31 for $70 per unit 87 (a) Sales Revenue (b) Cost of Goods Sold (c) Gross Margin $1 %24 %24
Sales during the year were 1,220 units. Beginning inventory was 380 units at a cost of $6 per unit. Purchase 1 was 610 units at $7 per unit. Purchase 2 was 940 units at $8 per unit. Required: a. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using FIFO method. (Enter all values as a positive value.) b. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using LIFO method. (Enter all values as a positive value.)
Assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Estimating sales returns On December 31, Jack Photography Supplies estimated that approximately 2% of merchandise sold will be returned. Sales Revenue for the year was $80,000 with a cost of $48,000. Journalize the adjusting entries needed to account for the estimated returns.
Adler Inc. has the following information for four inventory items, reported using the retail method, on July 31. The normal profit margin is 20% of selling price. Cost to Sell Cost per Replacement Cost Item Selling Price per No. Quantity Unit per Unit Unit per Unit #101 80 $20 $5 $15 $12 #102 50 22 4 14 15 #211 30 35 5 30 28 #212 40 40 8 28 35 Required Determine the inventory cost to report on the balance sheet on July 31 assuming that the company applies the lower of cost or market value rule to each individual inventory item. Note Do not use any negative signs with your answers. Per Unit Total Total Cost Cost to Cost Replacement Total Sell per Replacement Ceiling Floor Market Cost Lower of Selling Price Item per per No. Quantity Unit Unit Unit per Unit Cost #101 80 $20 $5 $15 $12 $ 0 $ #102 50 22 #211 30 35 45 14 15 0 30 28 0 #212 40 40 8 28 35 0 000 O 0 ос 00 Cost or Market 0 $ 0 $ 0 $ 0 $ 0 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0
UMET's Stores had the following inventory transactions in 2020: Transaction Units Cost per unit 1/1 Balance 50 $6 2/14 Sale 25 5/23 Purchase 100 8 8/21 Sale 50 11/5 Purchase 25 12 11/18 Sale 95 Required: Compute tge cost of goods sold and the ending inventory using the periodic inventory system for each of the following cost flow assumptions: a. FIFO b. LIFO c. Weighted average
Presented below is information related to Headland Enterprises. Inventory at cost Inventory at LCNRV Purchases for the month Sales for the month *(a) Sales Revenue Cost of Goods Sold Inventory, Beginning Purchases Cost of Goods Available Jan. 31 Inventory, Ending Cost of Goods Sold Gross Profit $18,300 17,690 Feb. 28 $18,422 15,372 20,740 35,380 Gain (loss) due to Market Fluctuations of Inventory Your answer is partially correct. Try again. From the information, prepare (as far as the data permit) monthly income statements in columnar form for February, March, and April. The inventory is to be shown in the statement at cost; the gain or loss due to market fluctuations is to be shown separately (using a valuation account). (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) February $35380 [18300 20740 139040 [18422 20618 [14762 +2440 Mar. 31 $12322 $20,740 19,032 29,280 42,700 Apr. 30 March -1048 143466 $17,080 16,226 32,330…
Perez Company had the following information for the year ending December 31: Units Unit Cost Beginning inventory 360 $34 Purchase: April 6 290 35 Sale: May 4 380 Purchase: July 19 590 39 Sale: September 9 450 Purchase: October 10 140 45 Perez uses the perpetual inventory system and the FIFO method. Required: Using FIFO (a) Compute the cost of ending inventory. (b) Compute the cost of goods sold for the year. Cost of ending inventory Cost of goods sold
You have the following information for Ivanhoe Inc. for the month ended October 31, 2025. Ivanhoe uses a periodic system for inventory. Date Oct. 1 Oct. 9 Oct. 11 Oct. 17 Oct. 22 Oct. 25 Oct. 29 (a1) (a2) Description Beginning inventory Purchase Sale Purchase Sale Purchase Sale Ending inventory $ Cost of goods sold Gross profit Units Unit Cost or Selling Price $26 +A 55 - Your answer is partially correct. $ 140 tA 100 1.LIFO. 2. FIFO. 3. Average-cost. (Round answers to O decimal places, e.g. 125.) 100 55 65 110 Calculate ending inventory, cost of goods sold, and gross profit under each of the following methods. LIFO 2424 7841 4034 $ $ 28 $ 45 29 50 31 50 FIFO 2885 7380 5370 i +A tA $ LA AVERAGE-COST 2580 7685 4190
The cost of goods sold for Home Depot last year amounted to $3,536,800 and the average inventory at cost was $1,576,182. The published inventory turnover at cost is 5.4. Calculate the inventory turnover at cost, and if it is less than the published rate, calculate the target average inventory cost. (Round your answer to the nearest dollar.) a. $374,265 b. $491,222 c. $654,963
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