ch08 - SOLUTIONS TO B EXERCISES E8-1B (1015 minutes)...

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SOLUTIONS TO B EXERCISES E8-1B (10–15 minutes) Inventory per physical count $200,000 Goods in transit to customer, f.o.b. destination + 25,000 Goods in transit from vendor, f.o.b. seller + 42,000 Inventory to be reported on balance sheet $267,000 The consigned goods of $20,000 are not owned by the company and were properly excluded. The goods in transit to a customer of $23,000, shipped f.o.b. shipping point, are properly excluded from the inventory because the title to the goods passed when they left the seller and therefore a sale and related cost of goods sold should be recorded in 2007. The goods in transit from a vendor of $60,000, shipped f.o.b. destination, are properly excluded from the inventory because the title to the goods does not pass to buyer until the buyer receives them. E8-2B (10–15 minutes) 1. Raw Materials Inventory. .............................. 40,500 Accounts Payable. ............................... 40,500 2. Raw Materials Inventory. .............................. 140,000 Accounts Payable. ............................... 140,000 3. No adjustment necessary. 4. Accounts Payable. ......................................... 38,000 Raw Materials Inventory. ..................... 38,000 5. Raw Materials Inventory. .............................. 95,000 Accounts Payable. ............................... 95,000 8-1
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E8-3B (10–20 minutes) 2005 2006 2007 Sales $217,500 $270,000 $307,500 Sales returns 8,250 9,750 15,000 Net sales 209,250 260,250 292,500 Beginning inventory 15,000 24,000 27,750** Ending inventory 24,000* 27,750 33,000 Purchases 181,500 195,000 223,500 Purchase returns and allowances 3,750 6,000 7,500 Transportation-in 6,000 6,750 9,000 Cost of good sold 174,750 192,000 219,750 Gross profit 34,500 68,250 72,750 *This was given as the beginning inventory for 2006. **This was calculated as the ending inventory for 2006. 8-2
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E8-4B (10–15 minutes) (a) May 10 Purchases. ............................................ 19,600 Accounts Payable. ...................... 19,600 ($20,000 X .98) May 11 Purchases. ............................................ 18,018 Accounts Payable. ...................... 18,018 ($18,200 X .99) May 19 Accounts Payable. ............................... 19,600 Cash. ............................................ 19,600 May 24 Purchases. ............................................ 16,170 Accounts Payable ($16,500 X .98). .......................... 16,170 (b) May 31 Purchase Discounts Lost. ................... 182 Accounts Payable ($18,200 X .01). ......................... 182 (Discount lost on purchase of May 11, $18,200, terms 1/15, n/30) 8-3
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E8-5B (10 minutes) (a) Feb. 1 Inventory. ................................................. 21,600 Accounts Payable. ......................... 21,600 Feb. 4 Accounts Payable. ................................... 5,000 Inventory. ........................................ 5,000 Feb. 13 Accounts Payable ($21,600 – $5,000). ... 16,600 Inventory (2% X $16,600). .............. 332 Cash. ................................................ 16,268
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ch08 - SOLUTIONS TO B EXERCISES E8-1B (1015 minutes)...

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