Inventory turnover is calculated by dividing cost of

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22.Inventory turnover is calculated by dividing cost of goods sold bya.beginning inventoryb.ending inventoryc.average inventoryd.365 days
23.The following information relates to product J:Cost$9.00Expected selling price$12.50Marketing & delivery cost$1.40Replacement cost$9.50The net realisable value (NRV) of product J is
Exercises5
Chapter 5 QuestionsEx. 1On October 1, Cycle Mania, a bicycle store had an inventory of 15 twelve-speedbicycles at a cost of $150 each. During the month of October the followingtransactions occurred.Oct.3Purchased 25 bicycles at a cost of $150 each from the Lyons BicycleCompany Ltd, terms n/30.Dr Purchases 3750Credit accounts payable 37506Sold 12 bicycles to Team Australia at $250 each, terms 2/10, n/30.Dr Accounts receivable 3000Credit sales revenue 30007Received credit from the Lyons Bicycle Company Ltd for the return of2 defective bicycles.Dr Accounts payable 300Cr Purchase returns and allowances 30013Issued a credit to Team Australia for the return of one defectivebicycle.Dr sales revenue and allowanceCr Accounts receivable – Team Australia 19Purchased 10 bicycles from Huffy Bicycle Company Ltd at a cost of$125, terms 2/10, n/30.20Paid freight of $80 on the October 19 purchase.Dr Freight-inCr cash at bank 80InstructionsPrepare the journal entries to record the transactions assuming the companyuses a periodic inventory system.Ex. 2Lakeland Ltd uses a periodic inventory system. During April, the followingtransactions and events occurred.April 3Purchased $1,500 of inventory terms 2/10, n/60.6Returned $300 of the inventory purchased on April 3.7Paid Freight charges of $150 on goods purchased on April 3.6
Chapter 5 Questions12Paid for the goods purchased on April 3.13Sold goods on credit for $1,000, terms 1/10, n/30.14The customer of April 13 returned $200 of the goods.23Received payment from the customer of April 13.InstructionsPrepare the journal entries to record the transactions.Ex. 3The income statement of Pine Supplies Ltd includes the items listed below:Net sales$800,000Gross profit on sales320,000Beginning inventory100,000Purchase returns and allowances8,000Freight-in10,000Operating expenses300,000Purchases520,000InstructionsUse the appropriate items listed above as a basis for determining:(a)Cost of goods sold.(b)Cost of goods available for sale.(c)Ending inventory.7
Chapter 5 Questions

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