Exam 15: Accounting for Merchandise Inventory

A beginning inventory and purchases of computer parts follow: The company sold 20 units from beginning inventory, 5 units from the first purchase, and 18 units from the second purchase. Required: Determine the (a) cost of an ending inventory and (b) Cost of Goods Sold under the specific invoice method. Round to two decimal places if required.

Prepare journal entries for the following transactions for Mark Machine Parts applying the perpetual inventory system. Omit explanations. July 9 Purchased on account 4 tires for $700. 11 Returned 1 tire for $175 credit. 15 Sold 2 tires for $1,500 cash, cost $350. 19 Paid the balance due on account.

Indicate the account(s) to be debited and credited to record the following transactions. -Returned merchandise inventory for cash - Periodic Debit ________ Credit ________

Journalize the following assuming periodic inventory. June 20 Made purchases of inventory for $4,500 on account. June 21 Made sales of $3,500 cash and $2,500 credit. June 22 Returned $2,000 of purchases for defects.

When there is more than one product in inventory:

Assume that in Year 1, the ending merchandise inventory is overstated by $30,000. If this is the only error in Year 1, fill in the items below, indicating which items will be understated(U), overstated(O), or correctly(C) stated for Year 1.

The inventory method where unit cost is found by dividing the cost of goods available for sale by the total number of units for sale is:

Bert Logistics has the following company information for August: goods available for sale at cost are $19,000, retail is $28,500, and sales at retail equal $21,500. Bert has a normal gross profit of 35%. The cost of estimated ending inventory under the gross profit method is: (Round any percentages to two decimal places, X.XX%, and your final answer to the nearest dollar.)

Under the periodic inventory method, purchases are debited to ________.

The retail method:

Determine the estimated cost of the ending inventory for Market Surplus as of September 30 by the retail method from the following data (use four decimal places).

Indicate the account(s) to be debited and credited to record the following transactions. -Purchased merchandise on credit; terms of 2/10, n/30. - Perpetual Debit ________ Credit ________

Hall Novelty Shop uses a periodic inventory system. It sold 55 balloons during April. Other data for April include: Cost of goods sold under the weighted-average method (rounded to the nearest dollar) is:

The first-in-first-out method assumes the oldest goods are sold first.

Hard Candy has a beginning inventory of $1,600 with a retail value of $2,000. June purchases were $3,000, with a retail value of $5,000 and retail sales were $4,700. What is the June 30 estimated ending inventory at cost under the retail method? (Round any percentages to two decimal places, X.XX%, and your final answer to the nearest dollar.)

The inventory method where items in the ending inventory will be valued at the costs shown on the most recent invoices is:

To use the gross profit method to estimate inventory, you do not need to know the goods available for sale at retail.

The full disclosure principle says that if a change is made to the inventory valuation method, the company should:

Bert Logistics has the following company information for August: goods available for sale at cost are $19,000, retail is $28,500, and sales at retail equal $21,500. Bert has a normal gross profit of 35%. The cost of estimated ending inventory under the retail method is: (Round any percentages to two decimal places, X.XX%, and your final answer to the nearest dollar.)

A beginning inventory and purchases of desks follow: The company sold 11 units from beginning inventory, 16 units from the first purchase, and 21 units from the second purchase. Required: Determine the (a) cost of an ending inventory and (b) Cost of Goods Sold under the specific invoice method. Round to two decimal places if required.