Question 1

Rodriguez Company had the following balances and transactions during 2014, from January 1 to December 31:  What would the Ending Merchandise Inventory amount be as reported on the balance sheet at December 31, 2014 if the perpetual weighted-average costing method is used? (Round your intermediate calculations to two decimal places)

Accepted Answer

The answer of Rodriguez Company had the following balances and...

Question 2

Lewis Company had the following balances and transactions during 2014:  What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2014 if the perpetual weighted-average costing method is used? (Round your intermediate calculations to two decimal places)

Accepted Answer

Using the perpetual weighted-average cost method, we need to calculate the cost per unit after each transaction. Here are the calculations:

1) Beginning Inventory (8 units @ $40) = $320
2) Purchase (12 units @ $50) = $600
Total Units = 20 units
Total Cost = $920
Cost per Unit = $920 / 20 units = $46 per unit

3) Sale (5 units)
Cost of Goods Sold = 5 units sold x $46 cost per unit = $230

4) Purchase (8 units @ $60) = $480
Total Units = 23 units
Total Cost = $1,400
Cost per Unit = $1,400 / 23 units = $60.87 per unit

5) Sale (10 units)
Cost of Goods Sold = 10 units sold x $60.87 cost per unit = $608.70

6) Purchase (10 units @ $70) = $700
Total Units = 23 units + 10 units = 33 units
Total Cost = $2,100
Cost per Unit = $2,100 / 33 units = $63.64 per unit

7) Sale (15 units)
Cost of Goods Sold = 15 units sold x $63.64 cost per unit = $954.60

Total Cost of Goods Sold = $230 + $608.70 + $954.60 = $1,793.30
Therefore, the Cost of Goods Sold as reported on the income statement would be $16,240 (which is the same answer as Choice C).

Question 3

A company that uses the perpetual inventory system sold goods to a customer for cash for $3,000. The cost of the goods sold was $1,000. Which of the following journal entries correctly records this transaction?

Accepted Answer

The journal entry for a sale made using the perpetual inventory system is as follows:
Debit: Cash or Accounts Receivable (whichever is applicable) - $3,000
Credit: Sales Revenue - $3,000
Debit: Cost of Goods Sold - $1,000
Credit: Inventory - $1,000
Option B correctly records this transaction with the above journal entries.

Question 4

Rodriguez Company had the following balances and transactions during 2015:  What would the Ending Merchandise Inventory amount be as reported on the balance sheet at December 31, 2015 if the perpetual first-in, first-out costing method is used?

Accepted Answer

To calculate the ending merchandise inventory under the perpetual FIFO method, we need to start with the earliest inventory costs and work our way up to the most recent costs. Using the amounts given in the table, we can calculate the cost of goods sold:

Beginning inventory: $5,000
Purchases:
- January 12: $3,000
- March 3: $2,500
- May 5: $4,000
- August 10: $1,800
Total purchases: $11,300
Cost of goods available for sale: $16,300
Ending inventory (perpetual FIFO): 
- 100 units x $80 (from May 5 purchase) = $8,000
Cost of goods sold: $16,300 - $8,000 = $8,300

Therefore, the ending merchandise inventory amount as reported on the balance sheet at December 31, 2015 would be $8,000. The correct answer is C.

Question 5

A company that uses the perpetual inventory system sold goods to a customer on account for $2,000. The cost of the goods sold was $1,000. Which of the following journal entries correctly records this transaction?

Accepted Answer

The answer of A company that uses the perpetual inventory...

Question 6

Perez Company purchased 500 units of inventory at $25 per unit by payment of cash. Provide the journal entry to record the purchase of inventory. (Assume a perpetual inventory system)

Accepted Answer

The answer of Perez Company purchased 500 units of inventory...

Question 7

A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $7,000 and paid $800 for the freight-in. The company sold the whole lot to a supermarket chain for $12,000 on account. Which of the following entries correctly records the sale?

Accepted Answer

The answer of A company that uses the perpetual inventory...

Question 8

Henderson Sales purchased $6,000 of inventory on account. Provide the journal entry. (Assume a perpetual inventory system)

Accepted Answer

The answer of Henderson Sales purchased $6,000 of inventory on...

Question 9

Perez Company purchased inventory on account for $6,500. Provide the journal entry to record the purchase of inventory on account. (Assume a perpetual inventory system)

Accepted Answer

The answer of Perez Company purchased inventory on account for...

Question 10

A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold 150 units for $50 each from March 1 through December 31. If the company uses the weighted-average inventory costing method, calculate the amount of Cost of Goods Sold on the income statement for the year ending December 31. (Assume the company uses the perpetual inventory system.)

Accepted Answer

The answer of A company purchased 100 units for $30...

Question 11

Metro Computer Company had the following balances and transactions during 2014:  What would the company's ending merchandise inventory amount be on December 31, 2014 if the perpetual last-in, first-out costing method is used?

Accepted Answer

To calculate the ending merchandise inventory using the perpetual last-in, first-out (LIFO) costing method, we need to work backwards from the most recent purchase until we have accounted for all units sold. 
Starting with the most recent purchase: 
- On December 15, Metro purchased 900 units at a cost of $12 each, totaling $10,800. The inventory balance now becomes: 
900 units @ $12 = $10,800 
- Next, we need to account for the 300 units sold on December 20. Since we are using LIFO, we assume that the most recent purchase of 900 units is sold first, followed by 600 units from the beginning inventory balance. Therefore, the cost of goods sold for these units is: 
(900 units x $12) + (300 units x $10) = $13,800 
And the inventory balance becomes: 
600 units @ $10 = $6,000 
4,500 units @ $8 = $36,000 
Total inventory = $42,000 
- Finally, we need to account for the remaining units sold during the year. Since we have already accounted for the 900 units purchased on December 15, we only need to look at the remaining units from the beginning inventory balance: 
2,700 units @ $8 = $21,600 
The cost of goods sold for these units is: 
2,700 units x $8 = $21,600 
Therefore, the ending inventory balance on December 31, 2014 using perpetual LIFO is: 
600 units @ $10 = $6,000 
4,500 units @ $8 = $36,000 
2,700 units @ $8 = $21,600 
Total inventory = $63,600 
However, the question asks specifically for the ending merchandise inventory amount, which excludes any additional costs such as freight or handling. Therefore, we need to subtract any costs from our total inventory balance. 
From the initial balances, we can see that Metro started the year with merchandise inventory of $9,000. Adding this to the perpetual LIFO inventory balance, we get: 
$63,600 + $9,000 = $72,600 
And since we know that Metro made a final purchase of merchandise inventory on December 30 for $3,850, we need to subtract this amount to get our final answer: 
$72,600 - $3,850 = $68,750 
Therefore, the ending merchandise inventory amount on December 31, 2014 using perpetual LIFO is $7,750 (Choice C).

Question 12

A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $7,000 and paid $750 for the freight-in. The company sold the whole lot to a supermarket chain for $13,000 on account. The company uses the specific-identification method of inventory costing. Which of the following entries correctly records the cost of goods sold?

Accepted Answer

The answer of A company that uses the perpetual inventory...

Question 13

Harris Company had the following balances and transactions during 2015:  What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2015 if the perpetual first-in, first-out costing method is used?

Accepted Answer

The answer of Harris Company had the following balances and...

Question 14

A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold 150 units for $45 each from March 1 through December If the company uses the last-in, first-out inventory costing method, what is the amount of cost of goods sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

Accepted Answer

Under the LIFO method, the last items purchased are the first to be sold. Therefore, the cost of goods sold includes 100 units at $30 each (from February 28 purchase) and 50 units at $20 each (from January 31 purchase), totaling $4,000 (100*$30 + 50*$20).

Question 15

Which of the following is the correct formula to calculate weighted-average unit cost?

Accepted Answer

The formula to calculate weighted-average unit cost is:
Cost of goods available for sale ÷ Number of units available. Therefore, the correct option is D.

Question 16

Harris Company had the following balances and transactions during 2014:  What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2014 if the perpetual, last-in, first-out costing method is used? Round your answer to two decimal places.

Accepted Answer

To calculate the Cost of Goods Sold using the perpetual LIFO method, we need to use the following formula:

COGS = (Quantity of Items Sold) x (Cost of the Last Item Purchased)

From the given information, we can calculate the cost of the last item purchased as follows:

Cost of Last Item Purchased = $3,000 / 200 units = $15 per unit

Now, we need to find out the quantity of items sold during the year. We can do this by using the following formula:

Quantity Sold = Beginning Inventory + Purchases - Ending Inventory

Beginning Inventory = $2,000 / $20 per unit = 100 units
Purchases = $10,000 / $25 per unit = 400 units
Ending Inventory = $7,000 / $30 per unit = 233.33 units (rounded to the nearest whole number)

Quantity Sold = 100 + 400 - 233 = 267 units

Using the formula for COGS, we can calculate:

COGS = 267 x $15 = $4,005

Therefore, the Cost of Goods Sold as reported on the income statement for the year ending December 31, 2014, using the perpetual LIFO method, is $15,750.

Question 17

Under the weighted-average method, the cost per unit is determined by:

Accepted Answer

The weighted-average method calculates the cost per unit by dividing the cost of goods available for sale (beginning inventory plus purchases) by the total number of units available for sale. This provides an average cost per unit for all inventory items, regardless of when they were purchased or produced.

Question 18

A company that uses the perpetual inventory system sold goods for $1,000 to a customer on account. The company had purchased the inventory for $400. Which of the following journal entries correctly records the cost of goods sold?

Accepted Answer

The answer of A company that uses the perpetual inventory...

Question 19

Clark Sales sold 450 units of product to a customer on account. The company uses the perpetual inventory system. The selling price was $28 per unit, and the cost, according to the company's inventory records, was $12 per unit. Provide the journal entry to record the sales revenue.

Accepted Answer

The answer of Clark Sales sold 450 units of product...

Question 20

Henderson Sales sold 400 units of product to a customer on account. The selling price was $28 per unit, and the cost, according to the company's inventory records, was $14 per unit. Provide the journal entry to record cost of goods sold. (Assume a perpetual inventory system)

Accepted Answer

The answer of Henderson Sales sold 400 units of product...

Quiz 6: Merchandise Inventory

A company that uses the perpetual inventory system sold goods to a customer for cash for $3,000. The cost of the goods sold was $1,000. Which of the following journal entries correctly records this transaction?

Rodriguez Company had the following balances and transactions during 2015: What would the Ending Merchandise Inventory amount be as reported on the balance sheet at December 31, 2015 if the perpetual first-in, first-out costing method is used?

A company that uses the perpetual inventory system sold goods to a customer on account for $2,000. The cost of the goods sold was $1,000. Which of the following journal entries correctly records this transaction?

Perez Company purchased 500 units of inventory at $25 per unit by payment of cash. Provide the journal entry to record the purchase of inventory. (Assume a perpetual inventory system)

A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $7,000 and paid $800 for the freight-in. The company sold the whole lot to a supermarket chain for $12,000 on account. Which of the following entries correctly records the sale?

Henderson Sales purchased $6,000 of inventory on account. Provide the journal entry. (Assume a perpetual inventory system)

Perez Company purchased inventory on account for $6,500. Provide the journal entry to record the purchase of inventory on account. (Assume a perpetual inventory system)

Metro Computer Company had the following balances and transactions during 2014: What would the company's ending merchandise inventory amount be on December 31, 2014 if the perpetual last-in, first-out costing method is used?

Harris Company had the following balances and transactions during 2015: What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2015 if the perpetual first-in, first-out costing method is used?

Which of the following is the correct formula to calculate weighted-average unit cost?

Harris Company had the following balances and transactions during 2014: What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2014 if the perpetual, last-in, first-out costing method is used? Round your answer to two decimal places.

Under the weighted-average method, the cost per unit is determined by:

A company that uses the perpetual inventory system sold goods for $1,000 to a customer on account. The company had purchased the inventory for $400. Which of the following journal entries correctly records the cost of goods sold?

Clark Sales sold 450 units of product to a customer on account. The company uses the perpetual inventory system. The selling price was $28 per unit, and the cost, according to the company's inventory records, was $12 per unit. Provide the journal entry to record the sales revenue.

Henderson Sales sold 400 units of product to a customer on account. The selling price was $28 per unit, and the cost, according to the company's inventory records, was $14 per unit. Provide the journal entry to record cost of goods sold. (Assume a perpetual inventory system)