Westons Washers Ltd buys and sells brand-name washing machines, which are identified by the manufacturers initials and
Question:
Weston’s Washers Ltd buys and sells brand-name washing machines, which are identified by the manufacturer’s initials and model number.
The inventory on 1 July 2015 is as follows:
Identification number | Quantity | Unit cost | Selling price | ||||||||
WES301 EMA4256 F&P111 KEL633 MAL720 | 3 4 4 3 5 | $880 920 800 700 600 | $1150 1350 1199 900 800 | ||||||||
All cost and selling prices exclude GST of 10%. Purchases and sales for July follow:
July 1 5 8 9 11 15 20 23 | Purchased 3 KEL633. Sold 2 EMA4256. Purchased 4 WES301. Sold 3 MAL720. Sold 1 F&P111. Purchased 6 EMA4256. Sold 2 KEL633. Sold 5 WES301. |
Weston’s Washers Ltd uses the specific identification method to account for its inventory. All transactions were on credit and the unit cost of purchases and per-unit selling price for July were the same as given for the beginning inventory.
Required
A. Prepare entries to record the 8 July purchase and the 20 July sale under the periodic inventory system method. Purchases and sales are subject to GST.
B. Calculate the cost of sales for July.
C. Calculate the cost of ending inventory on 31 July 2015.
D. Prepare an income statement for July based on the periodic inventory system.
Ending InventoryThe 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 =...
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett