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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es Required information [The following information applies to the questions displayed below.] Hughes Hair Design is a wholesaler of hair supplies. Hughes Hair Design uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $35,637). b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $410). c. Sold merchandise (costing $10,165) to a customer on account with terms n/60. d. Collected half of the balance owed by the customer in (c). e. Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. f. Anticipate further returns of merchandise (costing $330) after year-end from sales made during the year. $ 63,360 440 21,400 10,700 198 450 4. Hughes Hair Design is considering a contract to sell merchandise to a hair salon chain for $53,000. This merchandise will cost Hughes Hair…
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Whispering Company 'sells one product. Presented below is information for January for Whispering Company. Jan. 1 4 11 13 20 27 Inventory 111 90 159 130 149 85 Sale Purchase Sale Purchase Sale Whispering uses the FIFO cost flow assumption. All purchases and sales are on account. Assume Whispering uses a perpetual system. Prepare all necessary journal entries. (If no entry is required, select "No entry" for the account titles and enter O for the amounts, Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) units at $5 each units at $8 each units at $6 each units at $9 each units at $7 each units at $11 each Date Account Titles and Explanation (To record the sale) (To record the cost of inventory) (To record the sale) Debit Credit
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