RE Version 2 revised - In the accounting cycle, if the...

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Question 120 Marksi) What is the meaning of the terms DDP and EXW? Discuss the impact of such terms on thebuyer’s and seller’s accounting system.(2 Marks)
ii) Using the perpetual inventory system, record the following transactions in the generaljournal of Falcon Ltd (Ignore GST)(10 Marks)1. Purchased 200 units for $110 each on credit.2. Returned 12 units to the supplier.3. Sold 50 units for $330 each on credit.4. Purchased office supplies for $360 cash.5. Customer returned 8 of the units sold in (3).6. Sold 45 units for $356 each on credit.7. The physical inventory count at the end of the period consisted of 140 units of inventory.SOLUTION:
Review Exam, Spring 2016 Version 2Page 1
Review Exam, Spring 2016 Version 2Page 2Inventory5 000Recorded cost of the goods sold.4.Office Supplies360GST ReceivableCash at Bank36396Purchase of office supplies.5Sales Returns & Allowances2 400GST Payable240Accounts Receivable (8$330)2640Units returned by customers.Inventory (8$100)800Cost of Sales800Units returned into inventory.6Accounts Receivable (45$356)16 020Sales (45$324)14564GST Payable1456Sold 45 units on credit.Cost of Sales4 500Inventory (45$100)4 500Cost of sales.7.Inventory (39 x $100)39 000Excess Inventory39 000Purchase of units of inventory not recorded
Part 2(8 Marks)The following information relates to the inventory of Gadgets Ltd during May:May 1310121725Beginning InventoryPurchasedPurchasedSoldSoldSold70100110908030unitsunitsunitsunitsunitsunits@ $9@ $10@ $11Gadgets Ltd uses a perpetual inventory system. Ignore GST.RequiredDetermine the cost of the ending inventory (assuming there have been no stock losses) andthe cost of sales, using FIFO method.SOLUTION:$9630$9630630800121011880
Review Exam, Spring 2016 Version 2Page 3
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Term
Three
Professor
N/A
Tags
Accounting, Financial Accounting, Balance Sheet, Revenue, Generally Accepted Accounting Principles

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