P6-8A You are provided with the following information for Amelia Company. Amelia purchases all its high-tech items from Karina Company and makes sales to a variety of customers. All trans- actions are settled in cash. Returns are usually not damaged and are restored immediately to inven- tory for resale. Both Amelia and Karina use the periodic inventory method and the weighted average cost flow assumption. Increased competition has reduced the price of the product. AMELIA COMPANY Date July 1 5 8 10 15 16 20 25 Transaction Beginning inventory Purchase Sale Sale return Purchase Purchase return Sale Purchase Quantity 25 60 45 10 25 5 60 10 Unit Dollar Amount $10.00 9.00 11.00 11.00 8.00 8.00 9.00 6.50 Instructions (a) Prepare the required journal entries for the month of July for Amelia Company, the purchaser. (b) Prepare the required journal entries for the month of July for Karina Company, the seller, to record the purchases made by Amelia. (c) Determine the ending inventory amount using the weighted average cost flow assumption for Amelia Company. (d) By July 31, Amelia Company learns that the product has a net realizable value of $7 per unit. What amount should ending inventory be valued at on the July 31 balance sheet?

P6-8A You are provided with the following information for Amelia Company. Amelia purchases all its high-tech items from Karina Company and makes sales to a variety of customers. All trans- actions are settled in cash. Returns are usually not damaged and are restored immediately to inven- tory for resale. Both Amelia and Karina use the periodic inventory method and the weighted average cost flow assumption. Increased competition has reduced the price of the product. AMELIA COMPANY Date July 1 5 8 10 15 16 20 25 Transaction Beginning inventory Purchase Sale Sale return Purchase Purchase return Sale Purchase Quantity 25 60 45 10 25 5 60 10 Unit Dollar Amount $10.00 9.00 11.00 11.00 8.00 8.00 9.00 6.50 Instructions (a) Prepare the required journal entries for the month of July for Amelia Company, the purchaser. (b) Prepare the required journal entries for the month of July for Karina Company, the seller, to record the purchases made by Amelia. (c) Determine the ending inventory amount using the weighted average cost flow assumption for Amelia Company. (d) By July 31, Amelia Company learns that the product has a net realizable value of $7 per unit. What amount should ending inventory be valued at on the July 31 balance sheet?

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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