1

apr.	1	Sold merchandise for $3,000, granting the customer terms of 2/10, EOM; invoice dated April 1. The cost of the merchandise is $1,800.
Apr.	4	The customer in the April 1 sale returned merchandise and received credit for $600. The merchandise, which had cost $360, is returned to inventory.
Apr.	11	Received payment for the amount due from the April 1 sale less the return on April 4

Prepare journal entries to record each of the above sales transactions of a merchandising company. Assume a perpetual inventory system..

2

6 A company reports the following beginning inventory and purchases for the month of January. On January 26, the company sells 350 units. 150 units remain in ending inventory at January 31.

Units

Unit Cost

Beginning inventory on January 1

320

$

3.00

Purchase on January 9

80

3.20

Purchase on January 25

100

3.34

Assume the perpetual inventory system is used and then determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

Perpetual FIFO:	Cost of Goods Available for Sale			Cost of Goods Sold - January 26			Inventory Balance
	# of units	Cost per unit	Cost of Goods Available for Sale	# of units sold	Cost per unit	Cost of Goods Sold	# of units in ending inventory	Cost per unit	Ending Inventory
Beg. Inventory
Purchases:
January 9
January 25
Total

3

7 A company reports the following beginning inventory and purchases for the month of January. On January 26, the company sells 350 units. 150 units remain in ending inventory at January 31.

	Units	Unit Cost
Beginning inventory on January 1	320	$	3.00
Purchase on January 9	80		3.20
Purchase on January 25	100		3.34

Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on LIFO. (Round your per unit costs to 2 decimal places.)

Perpetual LIFO:

Goods purchased

Cost of Goods Sold

Inventory Balance

Date

# of units

Cost per unit

# of units sold

Cost per unit

Cost of Goods Sold

# of units

Cost per unit

Inventory Balance

January 1

320

@

$3.00

=

$960.00

January 9

January 25

January 26

Totals

4

The petty cash fund of the Brooks Agency is established at $150. At the end of the current period, the fund contained $28 and had the following receipts: film rentals, $24, refreshments for meetings, $46 (both expenditures to be classified as Entertainment Expense); postage, $30; and printing, $22.

(a)	Prepare journal entries to record establishment of the fund.

Record the establishment of the petty cash fund.

(b)	Prepare journal entries to record reimbursement of the fund at the end of the current period.

At the end of the current period, the fund contained $28 and had the following receipts: film rentals, $24, refreshments for meetings, $46 (both expenditures to be classified as Entertainment Expense); postage, $30; and printing, $22. Record the reimbursement of the fund at the end of the current period.

5

Nolan Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2013, its Cash account shows an $22,352 debit balance. Nolan