Exam 15: Accounting for Merchandise Inventory

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Paid for merchandise within the discount period. - Perpetual Debit ________ & ________ Credit ________ & ________

Hall Novelty Shop uses a periodic inventory system. It sold 150 balloons during April. Other data for April includes: Cost of goods sold under the weighted-average method (rounded to the nearest dollar)is:

Goods on consignment to another company:

Tack Room Clothing uses the retail method to estimate cost of ending inventory for its interim reports. From the following facts, estimate Tack Room's ending inventory at cost at August 31.

In a periodic inventory system, Purchases, Freight, and Purchases Returns and Allowances accounts are not used.

This method assumes that the most recently acquired goods are sold first.

Shayla's Design uses a periodic inventory system. Shayla sold 33 artist kits during January. Other data for January includes: Ending inventory under the FIFO method is:

An overstatement of ending inventory in one period results in:

A beginning inventory and purchases of computer parts follow: Required: Determine the cost of an ending inventory of 6 computer parts remaining in the periodic inventory under each of the assumptions listed. a)________ FIFO b)________ LIFO c)________ Weighted-average

During a period of inflation, LIFO will produce the highest net income.

In a perpetual inventory system, Cost of Goods Sold is an account in the general ledger.

The journal entry to record a customer's return of an item for a cash refund would:

The journal entry to record a purchase of inventory on credit under the perpetual system includes:

To use the gross profit method to estimate the value of the ending inventory, the company needs the following information:

The freight paid on goods purchased F.O.B. shipping point was debited to the Freight Expense account. This error would cause:

Chocolate Heaven had the following data for November: The cost of the estimated inventory on November 30 under the retail method is:

St. Paul Corporation had a beginning inventory of $2,500 which would retail for $4,000. They made $9,000 in purchases which would retail at $14,400. The sales for the period were $15,000. What is the estimated cost of ending inventory under the retail inventory method?

The full disclosure principle says that if a change is made:

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, overstated, or correctly stated for Year 1.

To use the retail method to estimate inventory, you need to know the goods available for sale at retail.