P#10, pp. 321 - Credo's Auto Supply (with revision) Step 1: Adjusting Journal Entries 1 Merchandise Inventory - beg 165,000 Add: Net Purchases Purchases 310,000 Add: Freight In 1,000 Cost of Goods Delivered 311,000 less: Purchase Discount 4,000 307,000 Cost of goods Available for Sale 472,000 less: Merchandise Inventory - ending (50%) 236,000 Cost of Sales 236,000 AJE: Merchandise Inventory - ending 236,000 Change in Inventory 236,000 Change in Inventory 236,000 Income and Expense Summary Account 236,000 note: To use Change in Inventory is Optional, but the final entry will result ot the following: Merchandise Inventory - ending 236,000 Income and Expense Summary Account 236,000 2 Office Supplies Expense 1,000 Sales Supplies Expense 1,000 Supplies Inventory 2,000 note: asset method was, therefore the expense is understated (DR Exp) 3 Store Equipment: date in Dep for 2013 Invested portion 60,000 Jan 1, 2013 6,000 (60,000 / 10 years ) x 1 year Acquired 84,000 July 1, 2013 4,200 (84,000 / 10 yrs) x 6/12 10,200 Depreciation - Store FF 10,200 Accumulated Depreciation - Store FF 10,200 How much is the Store FF's Book Value on Dec. 31, 2013?
