Freedman Company estimates that sales this year of $12,000 will be returned next year and customers will be granted a full refund. Which of the following journal entries would Freedman Company record as part of its year-end adjustments assuming it uses the perpetual inventory system? a.Debit Estimated Returns Inventory for $12,000 and credit Income Summary for $12,000 b.Debit Sales Returns and Allowances for $12,000 and credit Cost of Goods Sold for $12,000 c.Debit Inventory Short and Over for $12,000 and credit Merchandise Inventory for $12,000 d.Debit Sales Returns and Allowances for $12,000 and credit Customer Refunds Payable for $12,000

Q: Record the adjustment into T accounts and then journalize the adjusting entry.

A: Whenever there is decrease /increase of the physical inventory in comparison to the book value then…

Q: Merchandise Inventory Adjustments: Periodic Inventory system with Sales Returns and Allowances The…

A: An income statement, also known as a profit and loss statement or P&L statement, is a financial…

Q: Gladstone Company tracks the number of units purchased and sold throughout each accounting period…

A: As per last-in, first-out method units sold from inventory are the units that have been purchased…

Q: Based on the following data for the current year, what is the number of days' sales in inventory?…

A: Inventory turnover ratio is a ratio which determines how efficiently and effectively the inventory…

Q: Analyze each of the following transactions and record journal entries under the perpetual inventory…

A:

Q: Blue Company had the following account balances at year-end: Cost of Goods Sold $61,200, Inventory…

A: Perpetual Inventory System: Perpetual inventory systems are programs that continually estimate your…

Q: ProBuilder reports merchandise sales of $50,000 and cost of merchandise sales of $20,000 in its…

A: Journal entry:   Journal is the book of original entry whereby all the financial transactions are…

Q: C has beginning inventory for the year of $12,000. During the year, ABC purchases inventory for…

A: Solution: Cost of goods sold is the cost of total goods available for sale reduced by ending…

Q: Brill Company reported the following year-end amounts: Beginning Inventory $7,650 Net Cost of…

A: Formula: Ending Inventory = Beginning Inventory + Net purchases - Cost of goods sold

Q: Based on the following data for the current year, what is the number of days' sales in inventory?…

A: Days sales in inventory = 365/(cost of goods sold/Average inventory)  Average inventory = (Opening…

Q: Boyle Company uses the perpetual inventory system. At the end of the current fiscal year, the…

A: The adjustment needed for the discrepancy between the ledger balance and the physical count of…

Q: A company using the periodic inventory system has inventory costing $183 on hand at the beginning of…

A: Cost of goods sold = Beginning inventory + merchandise  purchased - Ending inventory

Q: MERCHANDISE INVENTORY ADJUSTMENT:PERODIC INVESTORY SYSTEM WITH SALES RETURNS AND ALLOWANCE Use the…

A: Merchandise inventory is the item which is purchased for the purpose of reselling them to the…

Q: Question: Langley Inc. inventory records for a particular development program show the following at…

A: Under the FIFO method, initial purchases are sold first.

Q: Larkspur Furniture uses a perpetual inventory system and pays GST on an accrual basis. Larkspur…

A: A special journal is used to post those transactions which impact the same set of accounts and have…

Q: Bing Corp. has the following normal account balances at its 12/31/22 year-end, prior to adjusting…

A: PERIODIC INVENTORY SYSTEM   A periodic inventory system is a mechanism for measuring the level of…

Q: A company that uses the perpetual inventory system purchases inventory for $65,000 on account, with…

A: Discount on payment = Purchase amount x rate of discount = $65,000 x 2% = $1,300

Q: The trial balance of Blossom Company at the end of its fiscal year, August 31, 2022, includes these…

A: COGS is known as Cost of Goods Sold. These are  the direct costs which occur in producing the goods…

Q: Crane Corporation sells item A as part of its product line. Information as to balances on hand,…

A: FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases…

Q: PLEASE DO NOT PROVIDE HAND WRITTEN ANSWER The following information for 2019 is available for…

A: The question has asked to compute the cost of ending inventory, and the cost of goods sold.    Costs…

Q: Wolfpack Corp. has the following normal account balances on 12/31/22 before the year-end adjustment…

A: Inventory: Inventory in accounting terms can be explained as inputs like raw materials, parts,…

Q: Orion Iron Corporation tracks the number of units purchased and sold throughout each year but…

A: The inventory can be valued using various methods as LIFO, FIFO and weighted average method.Under…

Q: Sheffield Co. uses the gross method to record sales made on credit. On June 1, 2020, it made sales…

A: gross method of recording sales -   the sales transaction is recorded at its gross price without…

Q: At the beginning of the year, Snaplt had $11,800 of inventory. During the year, Snaplt purchased…

A: Inventory refers to the goods and materials that a company holds for sale or production. These can…

Q: H.T. Tan Company is preparing the annual financial statements dated December 31 of the current year.…

A: Detailed explanation:Item  Quantity x  Unit Cost =  Total CostTotal Net Realizable Value (NRV)…

Q: Complete the journal entries for the following transactions: On August 1, 2019 XYZ Company sold…

A: Journal Entry is the primary step to record the transaction in the books of accounts. The increase…

Q: A company reports the following: Cost of merchandise sold $207,320 Average merchandise inventory…

A: · Ratio analysis used to identify the business performance of the company.· It is used to measure…

Q: The following information is available for Beach Company for 2025 who uses a periodic inventory…

A: Cost of goods sold budget shows the expenses incurred for producing a product. Cost of goods sold is…

Q: On December 1, 2016, Lynch Incorporated sold $18,000 of merchandise with terms 2/10, n/EOM. On…

A: Cash Discounts:Cash discounts are a type of financial incentive provided by a seller to a buyer in…

Q: Compute Altoona Company's (a) inventory turnover ratio and (b) number of days' sales in inventory…

A: Inventory turnover ratio (ITR) is a financial ratio that indicates how many times a company's…

Q: A company using the periodic inventory system has inventory costing $137 on hand at the beginning of…

A: Cost of goods sold means the cost incurred on the manufacturing or purchase of goods which has been…

Q: K New Home reported the following income statement for the year ended December 31, 2019: Click the…

A: Inventory turnover :— It is calculated by dividing cost of goods sold by average merchandise…

Q: Litton Industries uses a perpetual inventory system. The company began its fiscal year with…

A: The journal entries are prepared to keep the record of day to day transactions of the business on…

Q: On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method.…

A: Dollar Value in LIFO MethodTo calculate the Dollar value in LIFO Method which can be taken first the…

Q: One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each…

A: LIFO Method : Under LIFO method the goods which comes last are sold first.   Inventory in hand : 100…

Q: Sales staff salaries expense 2,500 Prepare a multiple-step Income statement for the year ended…

A: Income Statement is a financial statement that includes revenue earned and expenses incurred during…

Q: erstop Corporation sells ite A as part Its product Information the beginning inventory, purchases,…

A: Inventory Management -Inventory management includes handling order processing, production, storage,…

Q: nuary 1, 2020, Cullumber Corporation had inventory of $50,00O. At December 31, 2020, Cullumber Ces.…

A: Gross profit is the amount of profit which is arrived by deducting cost of goods sold from sales…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.