Explanation Perpetual inventory system: The method or system of maintaining, recording, and adjusting the inventory perpetually throughout the year, is referred to as perpetual inventory system. Gross price method: Under gross price method, sales and purchases of inventory are recorded at the full invoice price (gross amount) without the deduction of discounts. Prepare journal entries to record the purchases. Date Account title and Explanation Post ref. Amount Debit Credit July 10 Inventory $50,000 Accounts payable $50,000 (To record the purchase of inventory on account, credit terms of 2 / 10 , net 30 ) July 18 Accounts payable $50,000 Purchase discounts (1) $1,000 Cash (2) $49,000 (To record the payment for inventory within the discount period ) Table (1) July 10: To record the purchase of inventory on account, credit terms of 2 / 10 , net 30 : Inventory is an asset and the value is increased due to the credit purchases on account. Therefore, debit inventory account with $50,000. Accounts Payable is a liability and it is increased due to the increase in the amount to be paid for purchases

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Chapter 7, Problem 6RE

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Prepare journal entry to record the purchases and payments of Company S using gross price method under perpetual inventory system.

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Chapter 7, Problem 5RE

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Logan Enterprises purchased a forklift for $45,000 on January 1, 2018. The forklift has an expected salvage value of $2,500 and is expected to be used for 150,000 hours over its estimated useful life of 6 years. Actual usage was 17,500 hours in 2018 and 14,200 hours in 2019. Calculate depreciation expense per hour under the units-of-activity method. (Round the answer to 2 decimal places.) Correct answer

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Chapter 7 Solutions

EBK INTERMEDIATE ACCOUNTING: REPORTING

Ch. 7 - Distinguish among the types of inventory accounts...Ch. 7 - Prob. 2GI Ch. 7 - Describe the flow of costs for o merchandising...Ch. 7 - Describe the relationship between cost of goods...Ch. 7 - Explain the differences between the perpetual and...Ch. 7 - Prob. 6GI Ch. 7 - Prob. 7GI Ch. 7 - Prob. 8GI Ch. 7 - Prob. 9GI Ch. 7 - Prob. 10GI

Ch. 7 - Prob. 11GI Ch. 7 - Prob. 12GI Ch. 7 - Prob. 13GI Ch. 7 - Prob. 14GI Ch. 7 - Discuss the LIFO and FIFO cost flow assumptions...Ch. 7 - Prob. 16GI Ch. 7 - Prob. 17GI Ch. 7 - List the acceptable cost flow assumptions under...Ch. 7 - Prob. 19GI Ch. 7 - Describe the double-extension and link-chain...Ch. 7 - Prob. 21GI Ch. 7 - What is the impact of LIFO inventory liquidation...Ch. 7 - Goods on consignment should be included in the...Ch. 7 - Prob. 2MC Ch. 7 - Prob. 3MC Ch. 7 - Prob. 4MC Ch. 7 - Prob. 5MC Ch. 7 - Prob. 6MC Ch. 7 - Prob. 7MC Ch. 7 - Assuming no beginning inventory, what can be said...Ch. 7 - Prob. 9MC Ch. 7 - When the double-extension approach to the...Ch. 7 - On December 31, Pitts Manufacturing Company...Ch. 7 - On January 1, Pope Enterprises inventory was...Ch. 7 - Reid Company uses the periodic inventory system....Ch. 7 - Billings Company uses a periodic inventory system....Ch. 7 - Dani Corporation signed a binding commitment on...Ch. 7 - Prob. 6RE Ch. 7 - Prob. 7RE Ch. 7 - On October 23, Johnson Company purchased 100,000...Ch. 7 - Prob. 9RE Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - On January 1 of Year 1, Dorso Company adopted the...Ch. 7 - An evaluation of Bryces Bookstores inventory was...Ch. 7 - Inventory Accounts for a Manufacturing Company...Ch. 7 - Prob. 2E Ch. 7 - Perpetual versus Periodic Inventory Systems Graham...Ch. 7 - Determining Net Purchases The following amounts...Ch. 7 - Prob. 5E Ch. 7 - Items Included in Inventory The following are...Ch. 7 - Prob. 7E Ch. 7 - Prob. 8E Ch. 7 - Discounts Nelson Company bought inventory for...Ch. 7 - Alternative Inventory Methods Nevens Company uses...Ch. 7 - Alternative Inventory Methods Park Companys...Ch. 7 - Alternative Inventory Methods Frate Company was...Ch. 7 - LIFO, Perpetual and Periodic Riedel Companys...Ch. 7 - Dollar-Value LIFO A company adopted the LIFO...Ch. 7 - Prob. 15E Ch. 7 - Prob. 16E Ch. 7 - Prob. 17E Ch. 7 - Prob. 18E Ch. 7 - Prob. 19E Ch. 7 - Prob. 20E Ch. 7 - Prob. 1P Ch. 7 - Prob. 2P Ch. 7 - Prob. 3P Ch. 7 - Prob. 4P Ch. 7 - Cost of Goods Sold As an accountant for Lee...Ch. 7 - Alternative Inventory Methods Garrett Company has...Ch. 7 - Totman Company has the following transactions...Ch. 7 - Prob. 8P Ch. 7 - Prob. 9P Ch. 7 - Prob. 10P Ch. 7 - Prob. 11P Ch. 7 - Prob. 12P Ch. 7 - Prob. 13P Ch. 7 - Prob. 14P Ch. 7 - Prob. 15P Ch. 7 - Prob. 16P Ch. 7 - Prob. 17P Ch. 7 - Prob. 18P Ch. 7 - FIFO and LIFO A company may compute inventory...Ch. 7 - Prob. 2C Ch. 7 - In January, Broome Inc. requested and secured...Ch. 7 - Prob. 4C Ch. 7 - Prob. 5C Ch. 7 - Interpretation of GAAP and Ethical Issues Robin...Ch. 7 - Selection of an Inventory Method and Ethical...Ch. 7 - Prob. 8C Ch. 7 - Analyzing Nestls Cash and Receivables Disclosures...Ch. 7 - Fenimore Manufacturing Company uses the average...

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