Flamboro Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account.

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# ofunit cost or
itemssale price
August 1Opening
balance
60$18
August 5Purchase40$20
August 7Purchase
of August 5
items returned
-5
August 10Sale75$40
August 12Purchase25$24
August 17Sale20$50
August 24Purchase35$25

Use an inventory cost chart and an accounting chart to analyze the above transactions, and then answer the questions below.

Where you are asked to enter a percentage, you may enter it in any of several ways. For example, 78 percent can be entered as 78%, .78, 0.78, or 78.

Dollar figures should be entered WITHOUT dollar signs, commas, or decimal points.

Question 32 (2 points)

How will the August 5 purchase of inventory be recorded? Select all that apply. (2 marks)

Question 32 options:

a)decrease Cost Of Goods Sold
b)increase Accounts Payable
c)increase Cost Of Goods Sold
d)increase Purchases
e)decrease Cash
f)increase Inventory

Question 33 (2 points)

How will the August 7 purchase return be recorded? Select all that apply. (2 marks)

Question 33 options:

a)decrease Cost Of Goods Sold
b)increase Purchase Returns
c)decrease Purchases
d)decrease Inventory
e)decrease Cash
f)decrease Accounts Payable
g)increase Cost Of Goods Sold
h)increase Inventory

Question 34 options:

What is the value of the inventory after the August 7 transaction?

Question 35 (4 points)

How will the August 10 sale be recorded? Select all that apply. (4 marks)

Question 35 options:

a)increase Inventory
b)decrease Cash
c)increase Cost of Goods Sold
d)increase Accounts Receivable
e)increase Cash
f)decrease Sales
g)decrease Inventory
h)increase Sales
i)decrease Cost of Goods Sold
j)decrease Accounts Receivable

Question 36 options:

What amount of cost of goods sold will be recorded on August 10?

Question 37 options:

What is the value of the inventory after the August 10 transaction?

Question 38 options:

What is the gross profit percentage on the August 10 sale?

Question 39 options:

What is the amount of gross profit on the August 10 sales?

Question 40 options:

What is the value of the inventory after the August 12 transaction?

Question 41 options:

What amount of cost of goods sold will be recorded on August 17?

Question 42 options:

What is the value of the inventory after the August 17 transaction?

Question 43 options:

What is the gross profit percentage on the August 17 sale?

Question 44 options:

What is the amount of gross profit on the August 17 sale?

Question 45 options:

What is the value of the inventory after the August 24 transaction?

Question 46 options:

What is the total revenue for the month?

Question 47 (2 points)

Question 47 options:

What is the total gross profit for the month? (2 marks)

Question 48 options:

What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $20?

Start your answer with a + sign if an increase, a – sign if a decrease, or enter 0 if no adjustment is needed. (2 marks)

Question 49 options:

What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $30?
Start your answer with a + sign if an increase, a – sign if a decrease, or enter 0 if no adjustment is needed. (2 marks)

EXPERT ANSWER

ans 32
Entry is
Inventory dr
Accounts Payable cr
Correct option
f)increase Inventory
b) increase Accounts Payable
ans 33
Entry is
Accounts Payable dr
Inventory cr
Correct option
d) decrease Inventory
f) increase Accounts Payable
ans 34
Value of inventory is after August 71780
itemsUnit cost or sale priceTotal
Aug-01Opening60181080
balance
Aug-05Purchase4020800
Aug-07Purchase return-520-100
951780
ans 35
The entries are
Accounst Receivable Dr
Sales Cr
Cost of goodsold Dr
Inventory Dr
c)increase Cost of Goods Sold
g)decrease Inventory
d)increase Accounts Receivable
h)increase Sales
ans 36
Cost ofgood sold recorded is1380
itemsUnit cost or sale priceTotal
Aug-01Opening60181080
balance
Aug-07Purchase1520300
751380
ans 37
value of the inventory after the August 10400
ans 38
gross profit percentage on the August 10 sale
(3000-1380)/3000*10054%
ans 39
Gross profit is
3000-13801620
ans 40
value of the inventory after the August 12 transaction900
itemsUnit cost or sale priceTotal
Aug-07Purchase1520300
balance
Aug-12Purchase2524600
40900
ans 41
cost of goods sold will be recorded on August 17420
itemsUnit cost or sale priceTotal
Aug-07Purchase1520300
balance
Aug-12Purchase524120
20420
ans 42
value of the inventory after the August 17 transaction480
(20*24)
ans 43
gross profit percentage on the August 17 sale
(1000-420)/1000*10058%
ans 44
Gross profit580
as 45
value of the inventory after the August 24 transaction1355
Aug-12Purchase2024480
Aug-24Purchase3525875
551355
ans 46
Total revenue (3000+1000)4000
ans 47 Total gross profit
580+16202200
ans 48
We need adjust for loss in inventoy
Cost 1355-(55*20)255
Decrease the inventory by -$255
ans 49
No adjsutment required