Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goal The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Kzinski that include shipping co decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory. The following transactions occur in February to May 2021. Feb. 2 16 25 Mar. 2 30 31 Apr. 1 13 30 May 4 27 Natalie buys two deluxe mixers on account from Kzinski Supply Co. for $1,150 ($575 each), FOB destination, terms n/30. She sells one deluxe mixer for $1,100 cash. She pays the amount owed to Kzinski. She buys one deluxe mixer on account from Kzinski Supply Co. for $592, FOB destination, terms n/30. Natalie sells two deluxe mixers for a total of $2,200 cash. She pays the amount owed to Kzinski. She buys two deluxe mixers on account from Kzinski Supply Co. for $1,172 ($586 each), FOB destination, terms n/30. She sells three deluxe mixers for a total of $3,300 cash. Natalie pays the amount owed to Kzinski. She buys three deluxe mixers on account from Kzinski Supply Co. for $1,800 ($600 each), FOB destination, terms n/30. She sells one deluxe mixer for $1,100 cash. Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not inder Entry" for the account titles and enter O for the amounts.)

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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Do not use EXCEL to type answers please write out answers and give explanations.

Determine the cost of goods available for sale. Recall from Chapter 5 that at the end of January, Cookie Creations had three
mixers on hand at a cost of $570 each.
Cost of goods available for sale
List of Accounts
Calculate (i) ending inventory. (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the following methods:
LIFO, FIFO, and average cost. (Round Gross profit rate to 2 decimal places, e.g. 25.22%)
Ending
inventory
Cost of
goods sold
Gross profit
Gross profit
rate
$
60
60
$
$
69
$
LIFO
%
$
69
69
$
$
69
FIFO
%
69
$
69
$
$
Average Cost

Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goal:
The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Kzinski that include shipping co
decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory.
The following transactions occur in February to May 2021.
Feb. 2
16
25
Mar. 2
30
31
Apr. 1
13
30
May 4
27
Natalie buys two deluxe mixers on account from Kzinski Supply Co. for $1,150 ($575 each), FOB destination, terms n/30.
She sells one deluxe mixer for $1,100 cash.
She pays the amount owed to Kzinski.
She buys one deluxe mixer on account from Kzinski Supply Co. for $592, FOB destination, terms n/30.
Natalie sells two deluxe mixers for a total of $2,200 cash.
She pays the amount owed to Kzinski.
She buys two deluxe mixers on account from Kzinski Supply Co. for $1,172 ($586 each), FOB destination, terms n/30.
She sells three deluxe mixers for a total of $3,300 cash.
Natalie pays the amount owed to Kzinski.
She buys three deluxe mixers on account from Kzinski Supply Co. for $1,800 ($600 each), FOB destination, terms n/30.
She sells one deluxe mixer for $1,100 cash.
Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not inder
Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Date
Debit
Credit

Expert Solution

Step 1

Periodic Inventory System:

Journal entries

Date	Account Titles	Debit	Credit
February		$	$
2	Purchases	1,150
	Accounts payable		1,150
16	Cash	1,100
	Sales		1,100
25	Accounts payable	1,150
	Cash		1,150
March 2	Purchases	592
	Accounts payable		592
30	Cash	2,200
	Sales		2,200
31	Accounts payable	592
	Cash		592
April 1	Purchases	1,172
	Accounts payable		1,172
13	Cash	3,300
	Sales		3,300
30	Accounts payable	1,172
	Cash		1,172
May 4	Purchases	1,800
	Accounts payable		1,800
27	Cash	1,100
	Sales		1,100

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