Prob 6-11A
P6-11A Inventory Costing Methods—Perpetual Method Chou Sales Corporation uses the perpetual inventory system
On January 1, 2018 inventory Chou had:
1,000 units of product A with a unit cost of $20 per unit
A summary of purchases and sales during 2018 follows:
Unit Units
Unit Cost Purchased Sold
Feb. 2 400
Apr. 6 $22 1,800
July 10 1,600
Aug. 9 25 800
Oct. 23 800
Dec. 30 28 1,400
Required
a. Assume that Chou uses the first-in, first-out method. Compute the cost of goods sold for 2018
and the ending inventory balance at December 31, 2018, for product A.
b. Assume that Chou uses the last-in, first-out method. Compute the cost of goods sold for 2018 and
the ending inventory balance at December 31, 2018, for product A.
c. Assume that Chou uses the weighted-average cost method. Compute the cost of goods sold fo
2018 and the ending inventory balance at December 31, 2018, for product A. Round the cost
per unit to 3 decimal places and round your final answers to the nearest dollar.
a. First-In, First-Out
PURCHASED SOLD ENDING INVENTORY BALANCE
Unit Unit Unit
Date Units Cost Total Units Cost Total Units Cost Total
Jan.1 1,000 $20 $20,000
Feb. 2 400 $20 $8,000 600 20 12,000
600 20
Apr. 6 1,800 $22 $39,600 1,800 22 51,600
July 10 600 20 12,000
1,000 22 22,000 800 22 17,600
800 22
Aug. 9 800 25 20,000 800 25 37,600
Oct. 23 800 22 17,600 800 25 20,000
800 25
Dec. 30 1,400 28 39,200 1,400 28 $59,200 Ending Inventory
Cost of Goods Sold $59,600
b. Last-In, First-Out
PURCHASED SOLD ENDING INVENTORY BALANCE
Unit Unit Unit
Date Units Cost Total Units Cost Total Units Cost Total
Jan.1 1,000 $20 $20,000
Feb. 2 400 $20 $8,000 600 20 12,000
600 20
Apr. 6 1,800 $22 $39,600 1,800 22 51,600
July 10 1,600 22 35,200 600 20
200 22 16,400
600 20
200 22
Aug. 9 800 25 20,000 800 25 36,400
Oct. 23 800 25 20,000 600 20
200 22 16,400
600 20
200 22
Dec. 30 1,400 28 39,200 1,400 28 $55,600 Ending Inventory
Cost of Goods Sold $63,200
c. Weighted Average
PURCHASED SOLD ENDING INVENTORY BALANCE
Unit Unit Unit
Date Units Cost Total Units Cost Total Units Cost Total
Jan.1 1,000 $20 $20,000
Feb. 2 400 $20 $8,000 600 20 12,000
Apr. 6 1,800 $22 $39,600 2,400 21.500 51,600
July 10 1,600 21.500 34,400 800 21.500 17,200
Aug. 9 800 25 20,000 1,600 23.250 37,200
Oct. 23 800 23.250 18,600 800 23.250 18,600
Dec. 30 1,400 28 39,200 2,200 26.273 $57,800 Ending Inventory
Cost of Goods Sold $61,000
Prob 6-11B
P6-11B Inventory Costing Methods—Perpetual Method Glenn Sales Corporation uses the perpetual inventory system
On January 1, 2018 inventory Glenn had:
2,600 units of product B with a unit cost of $40 per unit
A summary of purchases and sales during 2018 follows:
Unit Units
Unit Cost Purchased Sold
Jan. 3 1,600
Mar. 8 $44 3,000
June 13 2,000
Sept. 19 46 800
Nov. 23 50 1,200
Dec. 28 1,800
Required
a. Assume that Glenn uses the first-in, first-out method. Compute the cost of goods sold for 2018
and the ending inventory balance at December 31, 2018, for product B.
b. Assume that Glenn uses the last-in, first-out method. Compute the cost of goods sold for 2018
and the ending inventory balance at December 31, 2018, for product B.
c. Assume that Glenn uses the weighted-average cost method. Compute the cost of goods sold fo
2018 and the ending inventory balance at December 31, 2018, for product B. Round the cost
per unit to 3 decimal places and round your final answers to the nearest dollar.
a. First-In, First-Out
PURCHASED SOLD ENDING INVENTORY BALANCE
Unit Unit Unit
Date Units Cost Total Units Cost Total Units Cost Total
Jan.1
Jan. 3
Mar. 8
June 13
Sept. 19
Nov. 23
Dec. 28
Ending Inventory
Cost of Goods Sold
b. Last-In, First-Out
PURCHASED SOLD ENDING INVENTORY BALANCE
Unit Unit Unit
Date Units Cost Total Units Cost Total Units Cost Total
Jan.1
Jan. 3
Mar. 8
June 13
Sept. 19
Nov. 23
Dec. 28
Ending Inventory
Cost of Goods Sold
c. Weighted Average
PURCHASED SOLD ENDING INVENTORY BALANCE
Unit Unit Unit
Date Units Cost Total Units Cost Total Units Cost Total
Jan.1
Jan. 3
Mar. 8
June 13
Sept. 19
Nov. 23
Dec. 28 Ending Inventory
Cost of Goods Sold
P7-5A
Line Item Descriptions for Part B
Accounts Receivable
Advertising Expense
Cash in Bank
Miscellaneous Expense
P7-5A Bank Reconciliation The bank reconciliation made by Thurman, Inc., on August 31 showed:
deposit in transit of $1,170
outstanding checks no. 597 $650
no. 603 $710
The reconciled cash balance on August 31 was $14,110
The following bank statement is available for September:
Bank Statement
TO Thurman, Inc. September 30
St. Louis, MO STATE BANK
Date Deposits No. Date Charges Date Balance
Sept. 1 1,170 597 Sept. 1 650 Aug. 31 14,300
2 1,120 607 5 1,850 Sept. 1 14,820
5 850 608 5 1,100 2 15,940
9 744 609 9 552 5 13,840
15 585 610 8 640 8 13,200
17 1,540 611 15 817 9 13,392
25 1,028 612 17 488 15 13,160
30 680 614 25 920 17 14,212
NSF 29 991 25 14,320
SC 30 36 29 13,329
30 13,973
Item codes EC: E
or Co
ection DM: Debit Memo CM: Credit Memo
SC: Service Charge OD: Overdraft RT: Returned Item
IN: Interest Earned NSF: Non-sufficient Funds
A list of deposits made and checks written during September is shown below:
Deposits Made Checks Written
Sept. 1 $1,120 No. 607 $1,850
4 850 608 1,100
8 744 609 552
12 585 610 640
16 1,540 611 871
24 1,028 612 488
29 680 613 310
30 1,266 614 920
$7,813 615 386
616 420
$7,537
The Cash in Bank account balance on September 30 was $14,386
In reviewing checks returned by the bank, the accountant discovered that
check No. 611 written for $817 for advertising expense, was recorded in the cash disbursements journal as $871
The NSF check written for $991 which Thurman deposited on September 24, was a payment on account from customer D. Walker.
Required
a. Prepare a bank reconciliation for Thurman, Inc., at September 30.
b. Prepare the necessary journal entries to
ing the Cash in Bank account into agreement with the
reconciled cash balance on the bank reconciliation.
a.
THURMAN, INC.
Bank Reconciliation
September 30
Ending Balance from Bank Statement $13,973 Balance from General Ledger $14,386
Add: Deposits not credited by bank 1,266 Add: Check No. 612 for 817
15,239 XXXXXXXXXXrecorded as 871 54
14,440
Less: Outstanding checks (list in numerical order) Less: NSF Check of D. Walker 991
No. 603 710 XXXXXXXXXXService charge 36 1,027
613 310
615 386
616 420 1,826
Reconciled Cash Balance $13,413 Reconciled Cash Balance $13,413
b.
General Journal
Date Description Debit Credit
Sept. 30 Cash in Bank 54
Advertising Expense 54
To co
ect e
or in recording check 612.
30 Accounts Receivable 991
Cash in Bank 991
To reclassify NSF check as an accounts receivable.
30 Miscellaneous Expense 36
Cash in Bank 36
To record bank service charge.
P7-5B
Line Item Descriptions for part
Accounts Receivable
Delivery Expense
Cash in Bank
Interest Income
Miscellaneous Expense
P7-5B Bank Reconciliation The bank reconciliation made by Adam Company, a sole proprietorship, on March 31 showed:
deposit in transit of $1,300
outstanding checks no. 797 $550
no. 804 $690
The reconciled cash balance on March 31 was $12,020
The following bank statement is available for April 30.
Bank Statement
TO Adam Company April 30
Fai
anks, AK FAIRBANKS NATIONAL BANK
Date Deposits No. Date Charges Date Balance
Apr. 1 1,300 804 Apr. 2 690 Mar. 31 11,960
3 1,680 807 3 730 Apr. 1 13,260
7 1,250 808 7 1,240 2 12,570
13 1,020 809 7 838 3 13,520
18 840 810 16 1,040 7 12,692
23 990 811 13 541 13 13,171
27 1,340 813 27 640 16 12,131
30 1,160 814 23 600 18 12,471
30 IN 95 NSF 18 500 23 12,861
SC 30 40 27 13,561
30 14,776
Item codes EC: E
or Co
ection DM: Debit Memo CM: Credit Memo
SC: Service Charge OD: Overdraft RT: Returned Item
IN: Interest Earned NSF: Non-sufficient Funds
A list of deposits made and checks written during April is shown below:
Deposits Made Checks Written
Apr. 2 $1,680 No. 807 $730
6 1,250 808 1,240
10 1,020 809 838
17 840 810 1,040
22 990 811 451
24 1,340 812 948
29 1,160 813 640
30 1,425 814 600
$9,705 815 372
816 875
$7,734
The Cash in Bank account balance on April 30 was $13,991
In reviewing checks returned by the bank, the accountant discovered that
check No. 811 written for $541 for delivery expense, was recorded in the cash disbursements journal as $451
The NSF check for $500 was that of customer R. Koppa, deposited in April.
Interest for April added to the account by the bank was $ 95 .
Required
a. Prepare a bank reconciliation for Adam Company at April 30.
b. Prepare the necessary journal entries to
ing the Cash in Bank account into agreement with the
reconciled cash balance on the bank reconciliation.
a.
ADAM COMPANY
Bank Reconciliation
April 30
Ending Balance from Bank Statement Balance from General Ledge
Add: Deposits not credited by bank Add: Interest Earned
Less: Outstanding checks (list in numerical order) Less: NSF Check R. Koppa
No. XXXXXXXXXXService charge
XXXXXXXXXXE
or in recording
XXXXXXXXXXCheck No. 811
Reconciled Cash Balance Reconciled Cash Balance
b.
General Journal
Date Description Debit Credit
April 30
To record interest earned on bank account for April.
30
To reclassify NSF check as an accounts receivable.
30
To record bank service charge.
30
To co
ect e
or in recording check 811.
P9-7A
Line Item Descriptions part a
Adjusted Cash Balance per Bank
Adjusted Cash Balance per Books
Collection of Note
Deposit in Transit
NSF Check
Outstanding Checks
Accounts Payable E
o
Check Printing Charge
Line Item Descriptions part
Account Payable
Accounts Receivable
Cash
Interest Earned
Miscellaneous Expense
Notes Receivable
P7-9A Bank Reconciliation The Seattle First Company’s bank statement for the month of September indicated
a balance of $13,375 The company’s cash account in the general ledger showed a balance of $10,030
on September 30. Other relevant information includes the following:
1 Deposits in transit on September 30 total $9,850
2 The bank statement shows a debit memorandum for a check printing charge of $95
3 Check number 238 payable to Simon Company was recorded in the accounting records for $496
and cleared the bank for this same amount. A review of the records indicated that the Simon account
now has a $72 credit balance and the check to them should have been $568
4 Outstanding checks as of September 30 totaled $11,600
5 Check No. 276 was co
ectly written and paid by the bank for $574 The check was recorded in
the accounting records as a debit to accounts payable and a credit to cash for $754
6 The bank returned a NSF check in the amount of $1,110
7 The bank included a credit memorandum for $2,620 representing a collection of a customer’s note.
The principle portion was $2,400 and the interest portion was $220
The interest had not been accrued.
Required
a. Prepare the September bank reconciliation for Seattle First Company.
b. Prepare any necessary adjusting entries.
a.
SEATTLE FIRST COMPANY
Bank Reconciliation
September 30
Cash Balance per Bank $13,375
Add: Deposit in Transit 9,850
Less: Outstanding Checks 11,600
Adjusted Cash Balance per Bank $11,625
Cash Balance per Books $10,030
Add: Accounts Payable E
or $180
Add: Collection of Note 2,620 2,800
Less: Check Printing Charge 95
Less: NSF Check 1,110 1,205
Adjusted Cash Balance per Books $11,625
b. Journal Entries
Date Description Debit Credit
Sept. 30 Cash 180
Accounts payable 180
To co
ect check e
or in recording check No. 276.
30 Cash 2,620
Notes Receivable 2,400
Interest Earned 220
To record note collection by bank.
30 Miscellaneous Expense 95
Cash 95
To record check printing charge.
30 Accounts Receivable 1,110
Cash 1,110
To record NSF check.
P9-7B
Line Item Descriptions for part a
Adjusted Cash Balance per Bank
Adjusted Cash Balance per Books
Collection of Note
Deposit in Transit
NSF Check
Outstanding Checks
Check Printing Charge
Accounts payable E
o
Line Item Descriptions for part a
Account Payable
Accounts Receivable
Cash
Interest Earned
Miscellaneous Expense
Notes Receivable
P7-9B Bank Reconciliation The Chicago Skate Company’s bank statement for