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Homework - Ch 8

# Homework - Ch 8 - Exercise 8-4 perpetual vs periodic JEs...

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Exercise 8-4 perpetual vs periodic JEs P ERPETUAL S YSTEM P ERIODIC S YSTEM (\$ in 000s) Purchases Inventory 155 Purchases 155 Accounts payable 155 Accounts payable 155 Freight Inventory 10 Freight-in 10 Cash 10 Cash 10 Returns Accounts payable 12 Accounts payable 12 Inventory 12 Purchase returns 12 Sales Accounts receivable 250 Accounts receivable 250 Sales revenue 250 Sales revenue 250 Cost of goods sold 148 No entry Inventory 148 End of period No entry Cost of goods sold (below) 148 Inventory (ending) 30 Purchase returns 12 Inventory (beginning) 25 Purchases 155 Freight-in 10 Cost of goods sold: Beginning inventory \$25 Purchases \$155 Less: Returns (12) Plus: Freight-in 10 Net purchases 153 Cost of goods available 178 Less: Ending inventory (30 ) Cost of goods sold \$148

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Exercise 8-8 gross and net method for purchases discounts Requirement 1 Purchase price = 100 units x \$500 = \$50,000 x .70 = \$35,000 November 17, 2006 Purchases . ....................................................................... 35,000 Accounts payable . ....................................................... 35,000 November 26, 2006 Accounts payable ........................................................... 35,000 Purchase discounts ( 2% x \$35,000) ............................... 700 Cash (98% x \$35,000) .................................................... 34,300 Requirement 2 December 15, 2006 Accounts payable . ........................................................... 35,000 Cash . ........................................................................... 35,000
Exercise 8-8 (concluded) Requirement 3 Requirement 1: November 17, 2006 Purchases (98% x \$35,000) ................................................ 34,300 Accounts payable . ....................................................... 34,300 November 26, 2006 Accounts payable . ........................................................... 34,300 Cash . ........................................................................... 34,300 Requirement 2: December 15, 2006 Accounts payable . ........................................................... 34,300 Interest expense (2% x \$35,000) ........................................ 700 Cash . ........................................................................... 35,000

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Exercise 8-9 fob cutoff Inventory balance before additional transactions \$165,000 Add: Goods shipped to Kwok f.o.b. shipping point on Dec. 28 17,000 Goods shipped to customer f.o.b. destination on December 27 22,000 Correct inventory balance \$204,000
Exercise 8-11 periodic lifo, fifo, ave Cost of goods available for sale: Beginning inventory (2,000 x \$6.10) \$12,200 Purchases: 10,000 x \$5.50 \$55,000 6,000 x \$5.00 30,000 85,000 Cost of goods available (18,000 units)

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Homework - Ch 8 - Exercise 8-4 perpetual vs periodic JEs...

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