Great Deal! Get Instant \$10 FREE in Account on First Order + 10% Cashback on Every Order Order Now

# Required Before you begin, print out all the pages in this workbook. Northgate Products Corp. sells gadgets and uses the perpetual inventory system. During the month of January 2019, the number of...

Required
Before you begin, print out all the pages in this workbook.
Northgate Products Corp. sells gadgets and uses the perpetual inventory system. During the month of January 2019, the number of gadgets purchased and sold was as follows:                                                    To try a new version of the problem, click on Formulas>Calculate Now in the menu bar above or press the F9 button.
Purchased            Sold                Balance in inventory
Date    Units    Unit cost    Total \$    Units        Unit cost    Total \$    Units    Unit cost    Total \$
Jan. 1                                100    \$2
3    400    \$4
8    700    \$5
10                200    *
15    500    \$8
20                400    **
27    400    \$7
Units were sold for the following amount:
June 10        \$11
June 27        \$13
*for specific identification, units sold on June 10 came from:
Opening inventory        0
Jan. 3 purchase            0
Jan. 8 purchase            200
200
**for specific identification, units sold on June 20 came from:
Opening inventory            0
Jan. 3 purchase            0
Jan. 8 purchase            0
Jan. 15 purchase            400
400
Required:
1    Complete the applicable inventory record card, and calculate cost of goods sold and the cost of ending inventory under each of the following inventory cost flow assumptions:
a. FIFO
b. LIFO
c. Specific identification
d. Weighted average.
2    Prepare the journal entries required to record purchases and sales using the FIFO inventory cost flow assumption. Descriptions are not necessary.
3    Refer to the "Compare" page. Calculate the sum of cost of goods sold and ending inventory balances under each of the four inventory cost flow assumptions. Explain the results.
FIFO
1.a. FIFO
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            200    \$2
3    400    \$4
8    700    \$5
10
15    500    \$8
20
27    400    \$7
Total COGS
LIFO
1.b. LIFO
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            100    \$2
3    400    \$4
8    700    \$5
10
15    500    \$8
20
27    400    \$7
Total COGS
Spec. Ident.
1.c. Specific identification
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            100    \$2
3    400    \$4
8    700    \$5
10
15    500    \$8
20
27    400    \$7
Total COGS
Wtd. Avg.
1.d. Weighted average
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            100    \$2.00
3    400    \$4.00
8    700    \$5.00
10
15    500    \$8.00
20
27    400    \$7.00
Jnl. Entries
Northgate Products Corp
GENERAL JOURNAL
Dec.
2019    Description    Debit    Credit
Compare
3. COGS plus ending inventory
FIFO                Spec. Ident.        Wtd. Avg.
LIFO
COGS
Ending Inv.
Total
Ans. Pt. 1a
1.a. FIFO
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            100    \$2    \$200
3    400    \$4    \$1,600                100    \$2    \$1,800
400    \$4
8    700    \$5    \$3,500                100    \$2    \$5,300
400    \$4
700    \$5
10                100    \$2    \$600    0    \$2    \$4,700
100    \$4        300    \$4
0    \$5        700    \$5
15    500    \$8    \$4,000                0    \$2    \$8,700
300    \$4
700    \$5
500    \$8
20                0    \$2    \$1,700    0    \$2    \$7,000
300    \$4        0    \$4
100    \$5        600    \$5
0    \$8        500    \$8
27    400    \$7    \$400                0    \$2    \$9,800
0    \$4
600    \$5        Ending inventory
500    \$8
400    \$7
Total COGS                    \$2,300
Ans. Pt. 1
1.b. LIFO
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            100    \$2    \$200
3    400    \$4    \$1,600                100    \$2    \$1,800
400    \$4
8    700    \$5    \$3,500                100    \$2    \$5,300
400    \$4
700    \$5
10                0    \$2    \$1,000    100    \$2    \$4,300
0    \$4        400    \$4
200    \$5        500    \$5
15    500    \$8    \$4,000                100    \$2    \$8,300
400    \$4
500    \$5
500    \$8
20                -200    \$2    \$2,800    300    \$2    \$5,500
0    \$4        400    \$4
0    \$5        500    \$5
400    \$8        100    \$8
27    400    \$7    \$2,800                300    \$2    \$8,300
400    \$4
500    \$5        Ending inventory
100    \$8
400    \$7
Total COGS                    \$3,800
Ans. Pt. 1c
1.c. Specific identification
Purchased            Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            100    \$2    \$200
3    400    \$4    \$1,600                100    \$2    \$1,800
400    \$4
8    700    \$5    \$3,500                100    \$2    \$5,300
400    \$4
700    \$5
10                0    \$2    \$1,000    100    \$2    \$4,300
0    \$4        400    \$4
200    \$5        500    \$5
15    500    \$8    \$4,000                100    \$2    \$8,300
400    \$4
500    \$5
500    \$8
20                0    \$2    \$3,200    100    \$2    \$5,100
0    \$4        400    \$4
0    \$5        500    \$5
400    \$8        100    \$8
27    400    \$7    \$2,800                100    \$2    \$7,900
400    \$4
500    \$5        Ending inventory
100    \$8
400    \$7
Total COGS                    \$4,200
Ans. Pt. 1d
1.d. Weighted average
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            100    \$2.00    \$200
3    400    \$4.00    \$1,600                500    \$3.60    \$1,800
8    700    \$5.00    \$3,500                1200    \$4.42    \$5,300
10                200    \$4.42    \$883    1000    \$4.42    \$4,417
15    500    \$8.00    \$4,000                1500    \$5.61    \$8,417
20                400    \$5.61    \$2,244    1100    \$5.61    \$6,172
27    400    \$7.00    \$2,800                1500    \$5.98    \$8,972    Ending inventory
Total COGS                    \$3,128
Ans. Pt. 2
2. FIFO journal entries
No journal entry necessary to record opening inventory.
Jan. 3    Merchandise Inventory    1,600
Accounts Payable        1,600
8    Merchandise Inventory    3,500
Accounts Payable        3,500
10    Accounts Receivable    2,200
Sales        2,200    *
Cost of Goods Sold    600
Merchandise Inventory        600
Sales calculated as:
XXXXXXXXXXUnits (a)    200
XXXXXXXXXXAmount per unit (b)    \$11
XXXXXXXXXXTotal (a) x (b)    2,200    *
15    Merchandise Inventory    4,000
Accounts Payable        4,000
20    Accounts Receivable    5,200
Sales        5,200    **
Cost of Goods Sold    1,700
Merchandise Inventory        1,700
Sales calculated as:
XXXXXXXXXXUnits (a)    400
XXXXXXXXXXAmount per unit (b)    \$13
XXXXXXXXXXTotal (a) x (b)    5,200    **
27    Merchandise Inventory    400
Accounts Payable        400
Ans. Pt. 3
3. COGS plus ending inventory
FIFO                Spec. Ident.        Wtd. Avg.
LIFO
COGS        \$2,300        \$3,800        \$4,200        \$3,128
Ending Inv.        \$9,800        \$8,300        \$7,900        \$8,972
Total        \$12,100        \$12,100        \$12,100        \$12,100
All the totals are the same. Different inventory cost flow assumptions merely change the allocation of cost of goods available for sale between cost of goods sold and ending inventory.
Box 308, Rochester AB T0G 1Z0
ISBN: XXXXXXXXXX
Li
ary and Archives Canada Cataloguing in Publication
Annand, David, 1954â€“
This case is licensed under a Creative Commons License, Attributionâ€“Non-commercialâ€“Share Alike 4.0 USA see www.creativecommons.org. This material may be reproduced for non-commercial purposes and changes may be used by others provided that credit is given to the author.
To obtain permission for uses beyond those outlined in the Creative Commons license, such as personalized assignments for students, please contact David Annand at XXXXXXXXXX.
open.bccampus.ca/find-open-textbooks
Please forward suggested changes to XXXXXXXXXX.
First US Edition
July 31, 2018

Required
Before you begin, print out all the pages in this workbook.
Gibson Energy Ltd.'s general ledger account for Cash in Bank showed the following at December 31, 2019:
To try a new version of the problem, click on Formulas>Calculate Now in the menu bar above or press the F9 button.
Cash in Bank                    Acct. No. 101
Balance DR (CR)
Date        Description        Folio    Debit    Credit
Nov. 30        Balance (overdraft)                    157,000
Dec. 1-31        Cash receipts        CRJ10    854,000        1,011,000
Dec. 1-31        Cash Payments        CDJ21        936,000    75,000
December deposits made and checks issued were as follows:
Deposits            Checks
Date    Amount        No.    Amount
Dec. 5    27,000        232    300,000
7    250,000        233    82,000
9    73,000        234    37,000
12    12,000        235    84,000
15    33,000        236    333,000
21    436,000        237    12,000
24    31,000        238    20,000
26    73,000        239    80,000
28    27,000
31    29,000
\$854,000            \$936,000
The December bank statement showed:
First Chartered Bank
Gibson Energy Ltd. Bank Statement
Month Ended December 31, 2019
Date    Type    Out    In    Balance
Dec. 3    Deposit        90,000    122,000
4    NR XYZ Corp.        70,000    192,000
5    Ck. 232    300,000        (108,000)
6    Ck. 231    90,000        (198,000)
6    Deposit        27,000    (171,000)
7    Deposit        250,000    79,000
10    Ck. 234    37,000        42,000
12    Ck. 236    333,000        (291,000)
13    Deposit        12,000    (279,000)
14    Ck. 52094*    71,000        (350,000)
14    NSF ABC. Inc.    6,000        (356,000)
15    Deposit        33,000    (323,000)
16    Ck. 238    20,000        (343,000)
17    Deposit        436,000    93,000
18    Ck. 235    84,000        9,000
20    Ck. 237    12,000        (3,000)
24    Deposit        31,000    28,000
26    Deposit        73,000    101,000
28    Deposit        27,000    128,000
31    OD int    1,480        126,520
31    SC    70        126,450
*drawn in e
or on Gibson's bank account
NR = note receivable collected from XYZ Corp. including interest of:
\$1,707
NSF = not sufficient funds
SC = service charge
OD int = overdraft interest expense
Outstanding items at November 30, 2019 were as follows:
Nov. 30 deposit        \$90,000
Ck. 231        \$90,000
Required:
1    Complete the bank reconciliation at December 31, 2019.
2    Prepare the adjusting journal entries required to make the Cash in Bank account in the general ledger agree with the adjusted cash balance on the December 31 bank reconciliation. Include descriptions.
Bank Rec.
Gibson Energy Ltd.
Bank Reconciliation
At December 31, 2019
Unreconciled general ledger Cash balance at Dec. 31                            Unreconciled bank statement balance at Dec. 31
Less:                            Less:
Adjusted general ledger Cash balance at Dec. 31                            Adjusted bank balance at Dec. 31
Jnl. Entries
Gibson Energy Ltd.
GENERAL JOURNAL
Dec.
2019    Description    PR    Debit    Credit
Ans. Pt. 1
Gibson Energy Ltd.
Bank Reconciliation
At December 31, 2019
Unreconciled general ledger Cash balance at Dec. 31                        Unreconciled bank statement balance at Dec. 31
\$75,000                    \$126,450
Note rec. - XYZ Corp.            70,000            Dec. 31    29,000    102,000
or        71,000
Less:                        Less: Oustanding checks
NSF check        (6,000)                Check No.    Amount
Overdraft Interest        (1,480)                233    (82,000)
Bank charges        (70)    (7,550)            239    (80,000)    (162,000)
Adjusted general ledger Cash balance at Dec. 31                        Adjusted bank balance at Dec. 31
\$137,450                    \$137,450
Ans. Pt. 2
Dec. 31    Cash                70,000
Note receivable - XYZ Corp.                    68,293
Interest income*                    1,707
To record receipt of principal and interest on note receivable from XYZ Corp.
*or possibly Interest Receivable, if this was set up in a prior period.
Dec. 31    Acct. Receivable - ABC Inc.                6,000
Cash                    6,000
To record NSF check from ABC Inc.
Dec. 31    Bank charges expense                1,550
Cash                    1,550
To record service charges and interest for December per the bank statement.
Box 308, Rochester AB T0G 1Z0
ISBN: XXXXXXXXXX
Li
ary and Archives Canada Cataloguing in Publication
Annand, David, 1954â€“
This case is licensed under a Creative Commons License, Attributionâ€“Non-commercialâ€“Share Alike 4.0 USA see www.creativecommons.org. This material may be reproduced for non-commercial purposes and changes may be used by others provided that credit is given to the author.
To obtain permission for uses beyond those outlined in the Creative Commons license, such as personalized assignments for students, please contact David Annand at XXXXXXXXXX.
open.bccampus.ca/find-open-textbooks
Please forward suggested changes to XXXXXXXXXX.
First US Edition
July 31, 2018

Required
Before you begin, print out all the pages in this workbook.
To try a new version of the problem, click on Formulas>Calculate Now in the menu bar above or press the F9 button.
The year-end inventory of Goodall Inc. consisted of the following similar groups of items, priced at cost and net realizable value:
LCNRV
Item    Total cost        Total NRV        Unit basis
A    \$1,000,000        \$960,000
B    \$700,000        \$735,000
C    \$600,000        \$576,000
D    \$800,000        \$792,000
E    \$800,000        \$840,000
Required:
1    Calculate ending inventory based on:
a. Cost
b. LCNRV (unit basis)
c. LCNRV (group basis).
2    Assume Goodall records its inventory at cost when purchased. Prepare the adjusting journal entry needed at year end to reduce the inventory value to LCNRV (unit basis).
Answe
1. LCNRV calculations:
LCNRV
Item    Total cost        Total NRV        Unit basis
A    \$1,000,000        \$960,000        \$960,000
B    700,000        735,000        700,000
C    600,000        576,000        576,000
D    800,000        792,000        792,000
E    800,000        840,000        800,000
\$3,900,000        \$3,903,000        \$3,828,000
Cost of Goods Sold                72,000
Merchandise Inventory            0        72,000
To write-down inventory at year-end to LCNRV as follows:
Merchandise inventory should be                    \$3,828,000
Merchandise inventory at
Answered Same Day Jun 21, 2021

## Solution

Kiran answered on Jun 21 2021
Required
Before you begin, print out all the pages in this workbook.
Northgate Products Corp. sells gadgets and uses the perpetual inventory system. During the month of January 2019, the number of gadgets purchased and sold was as follows:                                                    To try a new version of the problem, click on Formulas>Calculate Now in the menu bar above or press the F9 button.
Purchased            Sold                Balance in inventory
Date    Units    Unit cost    Total \$    Units        Unit cost    Total \$    Units    Unit cost    Total \$
Jan. 1                                100    \$1
3    500    \$3
8    700    \$6
10                100    *
15    500    \$8
20                700    **
27    400    \$7
Units were sold for the following amount:
June 10        \$12
June 27        \$14
*for specific identification, units sold on June 10 came from:
Opening inventory        0
Jan. 3 purchase            0
Jan. 8 purchase            100
100
**for specific identification, units sold on June 20 came from:
Opening inventory            0
Jan. 3 purchase            0
Jan. 8 purchase            300
Jan. 15 purchase            400
700
Required:
1    Complete the applicable inventory record card, and calculate cost of goods sold and the cost of ending inventory under each of the following inventory cost flow assumptions:
a. FIFO
b. LIFO
c. Specific identification
d. Weighted average.
2    Prepare the journal entries required to record purchases and sales using the FIFO inventory cost flow assumption. Descriptions are not necessary.
3    Refer to the "Compare" page. Calculate the sum of cost of goods sold and ending inventory balances under each of the four inventory cost flow assumptions. Explain the results.
FIFO
1.a. FIFO
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan. 1                            200    \$2    \$400
3    500    \$3    \$1,500                200    \$2    \$1,900
500    \$3
8    700    \$6    \$4,200                200    \$2    \$6,100
500    \$3
700    \$6
10                100    \$2    \$200    100    \$2    \$5,900
0    \$3        500    \$3
0    \$6        700    \$6
15    500    \$8    \$4,000                100    \$2    \$9,900
500    \$3
700    \$6
500    \$8
20                100    \$2    \$2,300    0    \$2    \$7,600
500    \$3        0    \$3
100    \$6        600    \$6
0    \$8        500    \$8
27    400    \$7    \$2,800                0    \$2    \$10,400
0    \$3
600    \$6
500    \$8
400    \$7
Total COGS                    \$2,500            \$10,400
LIFO
1.b. LIFO
Goods Purchased            Cost of Goods Sold            Balance in Inventory
Date    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$    Units    Unit Cost    Total \$
Jan....
SOLUTION.PDF