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Chapter 6: 16E_2 (page 362)

Question:Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of each putter is \(119. Company records indicate the following for a particular line ofGolf Unlimited’s putters:

Date Item Quantity Unit Cost

Nov. 1 Balance 24 \) 53

6 Sale 20

8 Purchase 30 70

17 Sale 30

30 Sale 2

Requirements

2. Journalize Golf Unlimited’s inventory transactions using the FIFO inventory costingmethod. (Assume purchases and sales are made on account.)

Short Answer

Expert verified

The total of journal book matches at $11,520.

Step by step solution

01

Journal Entry (part 1)

Journal entry

Date

Description

Debit

Credit

Nov 6

Accounts Receivables

$2,380

Sales Revenue

$2,380

Being sales made on account

Cost of goods sold

$1,060

Inventory

$1,060

Being cost of goods sold recorded

8

Inventory

$2,100

Accounts Payable

$2,100

Being Inventory purchased on account

Balance c/d

$5,540

$5,540

02

Journal Entry (part 2)

Journal entry

Date

Description

Debit

Credit

Balance c/d

$5,540

$5,540

Nov 17

Accounts Receivables

$3,570

Sales Revenue

$3,570

Being sales made on account

Cost of goods sold

$2,032

Inventory

$2,032

Being cost of goods sold recorded

30

Accounts Receivables

$238

Sales Revenue

$238

Being sales made on account

Cost of goods sold

$140

Inventory

$140

Being cost of goods sold recorded

Balance c/d

$11,520

$11,520

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Most popular questions from this chapter

Question:Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of each putter is \(119. Company records indicate the following for a particular line ofGolf Unlimited’s putters:

Date Item Quantity Unit Cost

Nov. 1 Balance 24 \) 53

6 Sale 20

8 Purchase 30 70

17 Sale 30

30 Sale 2

Requirements

2. Journalize Golf Unlimited’s inventory transactions using the weighted-averageinventory costing method. (Assume purchases and sales are made on account.)

Question:Boston Cycles started October with 12 bicycles that cost \(42 each. On October 16, Boston bought 40 bicycles at \)68 each. On October 31, Boston sold 34 bicycles for$100 each.

Preparing a perpetual inventory record and journal entries—Specific identification

Requirements

2. Journalize the October 16 purchase of merchandise inventory on the account and theOctober 31 sale of merchandise inventory on the account.

Steel Mill began August with 50 units of iron inventory that cost \(35 each. During August, the company completed the following inventory transactions:

Units Unit Cost Unit Sales Price

Aug. 3 Sale 45 \) 85

8 Purchase 90 $ 54

21 Sale 85 88

30 Purchase 15 58

Requirements

1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method.

Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires:

May 1 Beginning merchandise inventory 16 tires @ \( 65 each

11 Purchase 10 tires @ \) 78 each

23 Sale 12 tires @ \( 88 each

26 Purchase 14 tires @ \) 80 each

29 Sale 18 tires @ $ 88 each

Requirements

2. Compute cost of goods sold and gross profit using the LIFO inventory costing method.

Some of M and C Electronics’s merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is \(24,000 below the business’s cost of the goods, which was \)97,000. Before any adjustments at the end of the period, the company’s Cost of Goods Sold account has a balance of $380,000.

Requirements

3. At what amount should the company report cost of goods sold on the income statement?
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