Warren SM_Ch.07_final

Warren SM_Ch.07_final - CHAPTER 7 EXERCISES Ex. 71...

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CHAPTER 7 EXERCISES Ex. 7–1 Switching to a perpetual inventory system will strengthen Hammer & Nails Hard- ware’s internal controls over inventory, since the store managers will be able to keep track of how much of each item is on hand. This should minimize shortages of good-selling items and excess inventories of poor-selling items. On the other hand, switching to a perpetual inventory system will not eliminate the need to take a physical inventory count. A physical inventory must be taken to verify the accuracy of the inventory records in a perpetual inventory system. In addition, a physical inventory count is needed to detect shortages of inventory due to damage or theft. 1
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Ex. 7–3 Portable Video CD Players Purchases Cost of Merchandise Sold Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Apr. 1 50 35 1,750 5 40 35 1,400 10 35 350 14 60 36 2,160 10 60 35 36 350 2,160 21 10 25 35 36 350 900 35 36 1,260 23 10 36 360 25 36 900 30 75 38 2,850 25 75 36 38 900 2,850 30 Balances 3,010 3,750 2
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Ex. 7–4 Portable Video CD Players Purchases Cost of Merchandise Sold Inventory Date Quantity Unit Cost Total Cost Quantity
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This note was uploaded on 08/11/2010 for the course ACCT 1A taught by Professor Seyedin during the Spring '10 term at Foothill College.

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Warren SM_Ch.07_final - CHAPTER 7 EXERCISES Ex. 71...

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