Jerome's Fashion Dezigns sells a variety of items of clothing including footwear for men and uses a perpetual nventory system. The business began the last quarter of 2017 with 25 pairs of the "Jordan" brand at a total cost of $152,500. The following transactions, relating to the Jordan brand, took place during the quarter. October 10 Purchased 100 pairs of sneakers on account at a cost of $5,945 per pair. In addition, Jerome paid $405 in cash on each pair of shoes have the inventory shipped from the vendor's warehouse to Jerome's showroom. During the month 90 pairs were sold at a unit selling price of $8,255. | A new batch of 60 pairs was purchased on account at a total cost of $406,500 October 30 November 1 November 14 5 pairs of the sneakers purchased on November 1 were found to be of the wrong description and returned to the supplier November 30 The sales for November were 60 pairs of sneakers which yielded total sales revenue of $430,000. December 2 Odail Thomas, a customer to whom 10 pairs were sokld at the close of business on November 30, returned 4 pairs of the sneakers, as they were of the wrong colour. Jsing the FIFO method, the values of purchases and COGS after accounting for the transaction on November 1, 2017 are: O a. $1,194,000 and $571,500 O b. $1,041,500 and $742,500 O c. $1,194,000 and $742,950 O d. $1,041,500 and $565,250

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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Transcribed Image Text:Jerome's Fashion Dezigns sells a variety of items of clothing including footwear for men and uses a perpetual inventory system. The business began the last quarter of 2017 with 25 pairs of the "Jordan" brand at a total cost of $152,500. The following transactions, relating to the Jordan brand, took place during the quarter. Purchased 100 pairs of sneakers on account at a cost of $5,945 per pair. In addition, Jerome paid $405 in cash on each pair of shoes to have the inventory shipped from the vendor's warehouse to Jerome's showroom. During the month 90 pairs were sold at a unit selling price of $8,255. A new batch of 60 pairs was purchased on account at a total cost of $406,500 October 10 October 30 November 1 November 14 5 pairs of the sneakers purchased on November 1 were found to be of the wrong description and returned to the supplier November 30 The sales for November were 60 pairs of sneakers which yielded total sales revenue of $430,000. December 2 Odail Thomas, a customer to whom 10 pairs were sold at the close of business on November 30, returned 4 pairs of the sneakers, as they were of the wrong colour. Using the FIFO method, the values of purchases and COGS after accounting for the transaction on November 1, 2017 are: O a. $1,194,000 and $571,500 O b. $1,041,500 and $742,500 O c. $1,194,000 and $742,950 O d. $1,041,500 and $565,250

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