Demonstration_Problems_for_Chapter_5

Demonstration_Problems_for_Chapter_5 - Demonstration...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Demonstration Problems for Chapter 5 Demonstration Problem 5-1 Inventory Purchase/Sale, Perpetual Method The following events pertain to Jefferson Hardware Store. Jefferson uses the perpetual inventory method. 1. Jefferson Hardware was started on January 1, 2003 when it acquired $5,000 cash by issuing common stock. 2. The store paid $4,500 cash to purchase inventory. 3. Jefferson sold for $6,000 cash inventory that cost $3,500. 4. During 2003, the store paid $2,000 cash for operating expenses. Required Record the events in a financial statements model. Prepare a formal income statement and a balance sheet. 1
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Demonstration Problem 5-2 Perpetual Inventory Transactions Lisa’s Dress Shop (LDS) experienced the following events in 2004, its first year of oper- ations. The dress shop uses the perpetual inventory method. 1. LDS was started when it issued common stock for $60,000 cash. 2. LDS purchased on account inventory with a list price of $54,000. Payment terms were 2/10, n/30. LDS records inventory transactions at the net amount.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern