Record the end of period adjustment to determine the amount of cost of goods sold, including any "book-to-physical" adjustment that might be needed. (How to get the inventory, ending? # Inventory Management Case Study## OverviewThis section will discuss the inventory transactions of Home Hardware, which began with an initial stock of shovels. The following data provides insights into the sales and purchases over a specific month.## Transaction Details- **Initial Inventory:** - Starting with 35 shovels - Total initial cost: $175### Monthly Transactions:- **January 2:** - Sold 9 shovels on account. - Selling price: $10 per unit. - **January 16:** - Sold 12 shovels on account. - Selling price: $10 per unit.- **January 18:** - Bought 4 shovels on account. - Cost: $5 per unit.- **January 19:** - Sold 12 shovels on account. - Selling price: $10 per unit.- **January 24:** - Bought 12 shovels on account. - Cost: $5 per unit.- **January 31:** - Conducted an inventory count. - Determined that 15 units were on hand.This data provides a detailed look at inventory management and financial transactions related to stock handling. **Required:**1. Prepare the journal entries that would be recorded using a periodic inventory system. *(If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)*[Button: View transaction list]---## Journal Entry Worksheet**Step 6****Instructions:**Record the end of period adjustment to determine the amount of cost of goods sold, including any "book-to-physical" adjustment that might be needed.*Note: Enter debits before credits.*| Date | General Journal | Debit | Credit ||------------|-------------------------|-------|--------|| January 31 | Cost of Goods Sold | 180 | || | Inventory, Ending | | 175 |[Button: Record entry] [Button: Clear entry] [Button: View general journal]---This worksheet is used to record journal entries under a periodic inventory system. Adjustments are made at the end of the period to reflect the cost of goods sold and any discrepancies in inventory.

The adjustment entry is to be made under periodic inventory system at year end to record cost of…

Answered: Record the end of period adjustment to…

Record the end of period adjustment to determine the amount of cost of goods sold, including any "book-to-physical" adjustment that might be needed. (How to get the inventory, ending?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Under a perpetual inventory system, what are the four inventory costing methods and how does each…

A: The four inventory costing methods are: Specific identification FIFO (First-In, First-Out), LIFO…

Q: How do you enter an adjusting entry for Inventory?

A: Inventory adjustment Fluctuation in the inventory is a serious issue for a business entity. The…

Q: FIFO or LIFO

A: Inventory is the current assets reported under the head current assets in the balance sheet of the…

Q: The adjusting entry to set up the ending inventory will have: (A) a credit to Sales B a debit to…

A: Ending inventory is the worth of products still available for sale and held by a corporation at the…

Q: When using a perpetual inventory system, the journal entry to record the cost of goods sold is:…

A: Perpetual inventory system reports the inventory units on regular basis.

Q: Cost of goods sold is determined only at the end of the accounting period in a perpetual inventory…

A: Periodic inventory system :The periodic inventory system is a method of ascertaining inventory by…

Q: In the Perpetual/Periodic Inventory System what are the merchandise inventory and Income summary?…

A: Perpetual inventory: Under perpetual inventory system each transaction for purchase of inventory,…

Q: 31) What is the Adjusting journal entry to record when merchandise inventory is overstated in the…

A: Merchandise inventory is a form of asset for the company. It should be debited in case of increase…

Q: Which inventory costing method produces a more accurate income statement – FIFO or LIFO? ___________…

A: Lets understand the basics. There are various inventory methods are followed for calculating ending…

Q: 1. Journalize the adjustment for inventory shrinkage. 2. Journalize the adjustment for estimated…

A: Given: Merchandise inventory = $ 5,200 Inventory on June 30, 2018 = $ 4,900 Amount of Sold…

Q: Explain the appropriate accounting treatment required when a change in inventory method is made.

A: Definition: Change in inventory method: Change in inventory method is said to be the difference…

Q: What is the method of accounting of inventory in which the cost of goods is recorded each time a…

A: The cost of goods included the cost of goods that are sold during the period.

Q: Under the perpetual inventory system, in addition to making the entry to record a sale, a company…

A: Under perpetual inventory system, the decrease in inventory is also recorded every time of sale.

Q: oods purchased and held for resale are commonly known as _____. perpetual inventoryperiodic…

A: Periodic Inventory System: The periodic inventory system records and updates the inventory at the…

Q: Describe the entry to adjust from cost to net realizable value for inventory write-downs. What…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: Flora's Gifts reported the following current-month data for its only product. The company uses a…

A: Solution A: Computation of COGS and ending inventory - Specific identification Particulars Cost…

Q: Required information [The following information applies to the questions displayed below.] A company…

A: Evaluating Net Realizable Value is essential for proper financial reporting because it prevents…

Q: Required: 1. Complete the…

A: "Since you have posted multiple questions with multiple sub parts,we will provide the solution only…

Q: When inventory is sold, the cost of the inventory is removed from the Inventory account and reported…

A: COST OF GOODS SOLDCost of Goods Sold States the Amount of Cost Included in the Total Number of Units…

Q: A temporary account used to record the cost of goods bought for resale during a periodis called

A: Notes: All Income statement (P & L) accounts are considered as temporary account.

Q: Understand and apply rules for measurement of inventory at the end of the reporting period.

Q: Physical counts of inventory: O a. Must be taken at least once a month. O b. Are not necessary under…

A: A physical count of inventory means having an actual count of inventory despite maintaining…

Q: What are the purposes of the period-end adjustment under the periodic inventory system?

A: Periodic inventory system: The method or system of recording the transactions related to…

Q: (True or false) Under the perpetual inventory system, on a work sheet, cost of sales will be shown…

A: Cost of Sales - Cost of Sales is the cost incurred by the company to earn sales for the…

Q: Define days' sales in inventory (what do the results mean). Provide an example

A: Days sales in inventory means how much days company will take to convert its inventory into sales.…

Q: Need to know how to get ending inventory for JAFFE on a corrected income statement for NPV

A: This question is related to the ending inventory before moving into the question first we know about…

Q: Under a perpetual inventory system: Multiple Choice Cost of good sold is recorded with a…

A: Inventory management is a method of acquiring, keeping, and selling inventory, which includes both…

Q: When recording purchase returns and purchase allowances under the periodic inventory system, what…

A: Periodic Inventory System:Periodic inventory system is a system in which the inventory is updated…

Q: Explain the types of inventory and the differences between a perpetual inventory system and a…

Question

100%

Record the end of period adjustment to determine the amount of cost of goods sold, including any "book-to-physical" adjustment that might be needed. (How to get the inventory, ending?

# Inventory Management Case Study

## Overview

This section will discuss the inventory transactions of Home Hardware, which began with an initial stock of shovels. The following data provides insights into the sales and purchases over a specific month.

## Transaction Details

- **Initial Inventory:**
- Starting with 35 shovels
- Total initial cost: $175

### Monthly Transactions:

- **January 2:**
- Sold 9 shovels on account.
- Selling price: $10 per unit.

- **January 16:**
- Sold 12 shovels on account.
- Selling price: $10 per unit.

- **January 18:**
- Bought 4 shovels on account.
- Cost: $5 per unit.

- **January 19:**
- Sold 12 shovels on account.
- Selling price: $10 per unit.

- **January 24:**
- Bought 12 shovels on account.
- Cost: $5 per unit.

- **January 31:**
- Conducted an inventory count.
- Determined that 15 units were on hand.

This data provides a detailed look at inventory management and financial transactions related to stock handling.

**Required:**

1. Prepare the journal entries that would be recorded using a periodic inventory system. *(If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)*

[Button: View transaction list]

---

## Journal Entry Worksheet

**Step 6**

**Instructions:**
Record the end of period adjustment to determine the amount of cost of goods sold, including any "book-to-physical" adjustment that might be needed.

*Note: Enter debits before credits.*

| Date | General Journal | Debit | Credit |
|------------|-------------------------|-------|--------|
| January 31 | Cost of Goods Sold | 180 | |
| | Inventory, Ending | | 175 |

[Button: Record entry] [Button: Clear entry] [Button: View general journal]

---

This worksheet is used to record journal entries under a periodic inventory system. Adjustments are made at the end of the period to reflect the cost of goods sold and any discrepancies in inventory.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Record the end of period adjustment to determine the amount of cost of goods sold, including any "book-to-physical" adjustment that might be needed.

Solution

by Bartleby Expert

SEE SOLUTION

Similar questions

Under the perpetual inventory system, which of the following accounts is credited in the adjusting entry to reflect the expected amount of merchandise that will be returned? a. Merchandise Inventory b. Cost of Goods Sold c. Sales Returns and Allowances d. Estimated Returns Inventory
What is the correct entry to write off the inventory under perpetual method? Dr. Cost of Goods sold Cr. Inventory Account B Dr. Sales Cr. Cost of Goods sold © Dr. Sales Cr. Inventory Account Dr. Inventory Account Cr. Cost of Goods sold
Which of the following is accounted for prospectively? Change in reporting entity. Change in the percentage used to determine warranty expense. Correction of an error. Changes from the weighted-average method of inventory costing to FIFO.
What account is debited when recording a purchase of inventory when using a periodic inventory system?
Subject :- Account
Q-1: What is Perpetual and Periodic Inventory System? Explain the differences between both. Record all the transactional entries for the sales and purchases of inventory.
The account used to adjust the perpetual inventory records when a difference exists between the physical count and the amount in the perpetual inventory records is called a. Inventory Short and Over. b. Estimated Returns Inventory. c. Inventory Shrinkage. d. Merchandise Inventory
Explain the retail inventory method of estimating ending inventory.
Discuss how discounts are recorded in a perpetual inventory system, and compare how discounts are recorded in a periodic inventory system.