Majestic Stores Incorporated, a large Canadian publicly traded electronics dealer, buys large quantities of a flat- screen
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50 more sets, FOB destination, for $ 500 each. Majestic received the sets on 22 December and promptly made a request for the rebate. Majestic sold an additional 40 sets by 31 January 20X2, the end of Majestic’s fiscal year. The rebate cheque arrived on 20 February, after Majestic’s accountants had closed the books. The supplier provides terms of 2/ 10, n/ 30. The supplier paid a total of $ 1,760 in freight charges, including $ 375 paid in January for the last order of 50 sets.
Required:
1. Calculate the ending inventory value at 31 January 20X2. Majestic uses FIFO.
2. What entry should be made relative to the rebate on 31 January 20X2? Why?
3. What entry would be made on 20 February 20X2? Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
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