Homework Help is Here – Start Your Trial Now!
Business
Accounting
Number

Number

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
**Educational Exercise: Inventory and Sales Accounting** In this exercise, you will learn how to record sales and costs, and determine inventory-related financial metrics. Below is a transcript of the accounting entries and questions presented: ### Accounting Entries 1. **Record Sale** - **Accounts Receivable** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] - **Sales** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] 2. **Record Cost** - **Cost of Merchandise Sold** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] - **Merchandise Inventory** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] ### Questions 3. **Determine the gross profit from sales for the period.** - Response: $ [Enter Amount] 4. **Determine the ending inventory cost as of June 30.** - Response: $ [Enter Amount] 5. **Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?** - Response: [Select: Lower] These exercises are designed to enhance your understanding of the financial aspects of inventory management and sales record-keeping in a business context.
Transcribed Image Text:**Educational Exercise: Inventory and Sales Accounting** In this exercise, you will learn how to record sales and costs, and determine inventory-related financial metrics. Below is a transcript of the accounting entries and questions presented: ### Accounting Entries 1. **Record Sale** - **Accounts Receivable** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] - **Sales** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] 2. **Record Cost** - **Cost of Merchandise Sold** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] - **Merchandise Inventory** - Post. Ref: ✓ - Debit: [Enter Amount] - Credit: [Enter Amount] ### Questions 3. **Determine the gross profit from sales for the period.** - Response: $ [Enter Amount] 4. **Determine the ending inventory cost as of June 30.** - Response: $ [Enter Amount] 5. **Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?** - Response: [Select: Lower] These exercises are designed to enhance your understanding of the financial aspects of inventory management and sales record-keeping in a business context.
**Inventory and Transaction Records** | Date | Transaction | Number of Units | Per Unit | Total | |--------------|-------------|-----------------|----------|----------| | Apr. 3 | Inventory | 72 | $600 | $43,200 | | Apr. 8 | Purchase | 144 | $720 | $103,680 | | Apr. 11 | Sale | 96 | $2,000 | $192,000 | | Apr. 30 | Sale | 60 | $2,000 | $120,000 | | May 8 | Purchase | 120 | $800 | $96,000 | | May 10 | Sale | 72 | $2,000 | $144,000 | | May 19 | Sale | 36 | $2,000 | $72,000 | | May 28 | Purchase | 120 | $880 | $105,600 | | June 5 | Sale | 72 | $2,100 | $151,200 | | June 16 | Sale | 96 | $2,100 | $201,600 | | June 21 | Purchase | 216 | $960 | $207,360 | | June 28 | Sale | 108 | $2,100 | $226,800 | This table presents a series of transactions involving inventory purchases and sales over the course of three months. Each entry includes the date, type of transaction, number of units involved, the price per unit, and the total transaction value. It provides insight into inventory management, showing the fluctuation in unit cost and overall sales revenue.
Transcribed Image Text:**Inventory and Transaction Records** | Date | Transaction | Number of Units | Per Unit | Total | |--------------|-------------|-----------------|----------|----------| | Apr. 3 | Inventory | 72 | $600 | $43,200 | | Apr. 8 | Purchase | 144 | $720 | $103,680 | | Apr. 11 | Sale | 96 | $2,000 | $192,000 | | Apr. 30 | Sale | 60 | $2,000 | $120,000 | | May 8 | Purchase | 120 | $800 | $96,000 | | May 10 | Sale | 72 | $2,000 | $144,000 | | May 19 | Sale | 36 | $2,000 | $72,000 | | May 28 | Purchase | 120 | $880 | $105,600 | | June 5 | Sale | 72 | $2,100 | $151,200 | | June 16 | Sale | 96 | $2,100 | $201,600 | | June 21 | Purchase | 216 | $960 | $207,360 | | June 28 | Sale | 108 | $2,100 | $226,800 | This table presents a series of transactions involving inventory purchases and sales over the course of three months. Each entry includes the date, type of transaction, number of units involved, the price per unit, and the total transaction value. It provides insight into inventory management, showing the fluctuation in unit cost and overall sales revenue.
Expert Solution
Step 1

Introduction:

Inventory management: Its refers to tracking required materials and raw consumables that a organization consumes or distributes. Inventory management is completed to check and confirm if a business has adequate merchandise in hand and to recognize a shortfall.

Gross profit: The gross profit of a organization is the total sales of organization minus total cost of the goods sold. The total sales here refers to all the goods sold by the company. The total cost of goods sold is the sum of all costs and overheads of the organization. 

 

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS