Mgmt 200 Assignment Soln 2-28-11

Mgmt 200 Assignment Soln 2-28-11 - Inventory Shirts 25 $ 50...

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Management 200 – Introductory Financial Accounting– Spring 2011 Krannert School of Management - Purdue University Solutions to class assignment for February 28, 2011 Exercise 6-4 Inventory 300,000 Accounts Payable 300,000 ( Purchase inventory on account ) Accounts Receivable 500,000 Sales 500,000 ( Sell inventory on account ) Cost of Goods Sold 325,000 Inventory 325,000 ( Cost of inventory sold ) Exercise 6-14 Requirement 1 Inventory Quantity Lower of Cost or Market Ending
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Unformatted text preview: Inventory Shirts 25 $ 50 $1,250 MegaDriver 5 200 1,000 MegaDriver II 20 300 6,000 $8,250 Requirement 2 Debit Credit Cost of Goods Sold 300 Inventory 300 ( Adjust inventory down to market ) (5 units of MegaDriver X $60 ) Requirement 3 The write-down of inventory has the effects of reducing total assets (inventory), increasing expenses (cost of goods sold), decreasing net income, and decreasing retained earnings....
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