Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 7, Problem 7PB
Selected data on merchandise inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows:
Instructions
- 1. Determine the estimated cost of the merchandise inventory of Jaffe Co. on February 28 by the retail method, presenting details of the computations.
- 2. a. Estimate the cost of the merchandise inventory of Coronado Co. on October 31 by the gross profit method, presenting details of the computations.
b. Assume that Coronado Co. took a physical inventory on October 31 and discovered that $366,500 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during May through October?
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Retail Method; Gross Profit Method
Selected data on merchandise inventory, purchases, and sales for Celebrity Tan and Ranchworks Co. are as
follows:
Cost
Retail
Celebrity Tan
Merchandise inventory, August 1
$354,000
$520,000
Transactions during August:
Purchases (net)
Sales
4,066,000
5,980,000
6,152,000
Ranchworks Co.
Merchandise inventory, March 1
$285,000
Transactions during March through November:
Purchases (net)
3,786,000
Sales
5,915,000
Estimated gross profit rate
35%
1.
Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record (in the same format as the example table I have attached) using the first-in, first-out method. The data needed is provided in the list of transactions/units/totals attached
2.
Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on the account and date your journal entry March 31.
Determine the gross profit from sales for the period.
4.
Determine the ending inventory cost as of March 31.
Given the following, prepare the entries that
both the purchaser and seller should record for
these transactions. Assume both companies
use a perpetual inventory system.
a. February 14: Benson Inc.'s merchandise was
sold to Dylex Corporation for $700 under
credit terms of 2/30, n/60, FOB shipping
point. The cost of the merchandise was
$630.
b. February 28: Dylex Corporation paid Benson
Inc. the balance due.
Enter the transaction letter as the description
when entering the transactions in the journal.
Dates must be entered in the format dd/mmm
(i.e., January 15 would be 15/Jan).
Please use the '+' and '-' buttons to change the
number of accounts (if necessary) for each
journal entry.
a) Dylex Corporation
b) Benson Inc.
General Journal
Page GJ4
General Journal
Page GJ7
Date
Account/Explanation
E Debit
Credit
Date
Account/Explanation
E Debit
Credit
+ -
+ -
+ -|
+
Chapter 7 Solutions
Financial Accounting
Ch. 7 - Prob. 1DQCh. 7 - Why is it important to take a physical inventory...Ch. 7 - Do the terms FIFO, LIFO, and weighted average...Ch. 7 - If merchandise inventory is being valued at cost...Ch. 7 - Which of the three methods of inventory...Ch. 7 - If inventory is being valued at cost and the price...Ch. 7 - Using the following data, how should the...Ch. 7 - The inventory at the end of the year was...Ch. 7 - Hutch Co. sold merchandise to Bibbins Company on...Ch. 7 - A manufacturer shipped merchandise to a retailer...
Ch. 7 - The following three identical units of Item A are...Ch. 7 - The following three identical units of Item Beta...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for...Ch. 7 - Beginning inventory, purchases, and sales for...Ch. 7 - The units of an item available for sale during the...Ch. 7 - Prob. 5PEBCh. 7 - On the basis of the following data, determine the...Ch. 7 - Prob. 6PEBCh. 7 - During the taking of its physical inventory on...Ch. 7 - During the taking of its physical inventory on...Ch. 7 - Financial statement data for years ending December...Ch. 7 - Financial statement data for years ending December...Ch. 7 - Triple Creek Hardware Store currently uses a...Ch. 7 - Hardcase Luggage Shop is a small retail...Ch. 7 - Beginning inventory, purchases, and sales data for...Ch. 7 - Assume that the business in Exercise 7-3 maintains...Ch. 7 - Beginning inventory, purchases, and sales data for...Ch. 7 - Assume that the business in Exercise 7-5 maintains...Ch. 7 - The following units of an item were available for...Ch. 7 - Prob. 8ECh. 7 - The following units of a particular item were...Ch. 7 - Assume that the business in Exercise 7-9 maintains...Ch. 7 - Assume that the business in Exercise 7-9 maintains...Ch. 7 - The units of an item available for sale during the...Ch. 7 - The units of an item available for sale during the...Ch. 7 - Assume that a firm separately determined inventory...Ch. 7 - On the basis of the following data, determine the...Ch. 7 - Based on the data in Exercise 7-15 and assuming...Ch. 7 - Missouri River Supply Co. sells canoes, kayaks,...Ch. 7 - Fonda Motorcycle Shop sells motorcycles, ATVs, and...Ch. 7 - During 20Y5, the accountant discovered that the...Ch. 7 - The following data (in millions) were taken from...Ch. 7 - Kroger, Sprouts Farmers Market, Inc., and Whole...Ch. 7 - A business using the retail method of inventory...Ch. 7 - A business using the retail method of inventory...Ch. 7 - A business using the retail method of inventory...Ch. 7 - On the basis of the following data, estimate the...Ch. 7 - The merchandise inventory was destroyed by fire on...Ch. 7 - Based on the following data, estimate the cost of...Ch. 7 - Based on the following data, estimate the cost of...Ch. 7 - The beginning inventory at Midnight Supplies and...Ch. 7 - The beginning inventory at Midnight Supplies and...Ch. 7 - The beginning inventory for Midnight Supplies and...Ch. 7 - The beginning inventory for Midnight Supplies and...Ch. 7 - Dymac Appliances uses the periodic inventory...Ch. 7 - Data on the physical inventory of Ashwood Products...Ch. 7 - Selected data on merchandise inventory, purchases,...Ch. 7 - The beginning inventory of merchandise at Dunne...Ch. 7 - The beginning inventory for Dunne Co. and data on...Ch. 7 - The beginning inventory for Dunne Co. and data on...Ch. 7 - The beginning inventory for Dunne Co. and data on...Ch. 7 - Pappas Appliances uses the periodic inventory...Ch. 7 - Data on the physical inventory of Katus Products...Ch. 7 - Selected data on merchandise inventory, purchases,...Ch. 7 - Sizemo Elektroniks sells semiconductors that are...Ch. 7 - Anstead Co. is experiencing a decrease in sales...Ch. 7 - Golden Eagle Company began operations on April 1...Ch. 7 - The following is an excerpt from a conversation...Ch. 7 - Target Corp. sells merchandise primarily through...Ch. 7 - Prob. 7CP
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Selected data on merchandise inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows: Instructions 1. Determine the estimated cost of the merchandise inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the computations. 2. a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that 369,750 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March through November?arrow_forwardBased on the data in Exercise 7-15 and assuming that cost was determined by the FIFO method, show how the merchandise inventory would appear on the balance sheet.arrow_forwardUse the first-in, first-out (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forward
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