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What should be the journal entry to match the inventory record to the physical count of inventory? The gross profit must be still 40%. Refer to the chart of accounts for the accounting titles to be used. Is there missing inventory? Justify your answer by giving proofs such as computation.

What should be the journal entry to match the inventory record to the physical count of inventory? The gross profit must be still 40%. Refer to the chart of accounts for the accounting titles to be used. Is there missing inventory? Justify your answer by giving proofs such as computation.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Merchandise Inventory COGS 85,500.00 12,142.86 3,200.00 15,714.29 12,142.86 25,714.29 15,714.29 53,571.43 25,714.29 28,728.56 Sales 17,000.00 Sales COGS Gross Profit 21,428.57 75,000.00 53,571.43 22,000.00 36,000.00 75,000.00 The Manu Merchandising uses a perpetual inventory system. The gross profit is 40% based on cost. Thus, to compute the cost of goods sold in sales transaction, the amounts were divided to 140% or 1.40. The Manu Merchandising has an unadjusted trial balance in inventory of 28,728.56 and 53,571.43 cost of goods sold. However, the merchandise inventory at the end of the month is 10,500 based on physical count. If the amount in the record will be used to compute tthe gross profit. It shows that the gross profit (21,428.57) is 40% of cost, so it is correct. What should be the journal entry to match the inventory record to the physical count of inventory? The gross profit must be still 40%. Refer to the chart of accounts for the accounting titles to be used. Is there missing inventory? Justify your answer by giving proofs such as computation.
Transcribed Image Text:Merchandise Inventory COGS 85,500.00 12,142.86 3,200.00 15,714.29 12,142.86 25,714.29 15,714.29 53,571.43 25,714.29 28,728.56 Sales 17,000.00 Sales COGS Gross Profit 21,428.57 75,000.00 53,571.43 22,000.00 36,000.00 75,000.00 The Manu Merchandising uses a perpetual inventory system. The gross profit is 40% based on cost. Thus, to compute the cost of goods sold in sales transaction, the amounts were divided to 140% or 1.40. The Manu Merchandising has an unadjusted trial balance in inventory of 28,728.56 and 53,571.43 cost of goods sold. However, the merchandise inventory at the end of the month is 10,500 based on physical count. If the amount in the record will be used to compute tthe gross profit. It shows that the gross profit (21,428.57) is 40% of cost, so it is correct. What should be the journal entry to match the inventory record to the physical count of inventory? The gross profit must be still 40%. Refer to the chart of accounts for the accounting titles to be used. Is there missing inventory? Justify your answer by giving proofs such as computation.
101 Cash 103 Accounts Receivable 104 Allowance for Doubtful Accounts Merchandise Inventory Store Supplies 105 106 107 Store Furniture Accounts Payable Salaries Payable 201 202 203 Unearned sales 301 Maria Lopez, Capital 401 Sales 402 Sales Return and Allowances 501 Cost of Goods Sold Salaries Expense Store Supplies Expense Doubtful Accounts Expense 502 503 504
Transcribed Image Text:101 Cash 103 Accounts Receivable 104 Allowance for Doubtful Accounts Merchandise Inventory Store Supplies 105 106 107 Store Furniture Accounts Payable Salaries Payable 201 202 203 Unearned sales 301 Maria Lopez, Capital 401 Sales 402 Sales Return and Allowances 501 Cost of Goods Sold Salaries Expense Store Supplies Expense Doubtful Accounts Expense 502 503 504
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