2 Tournalizing purchase transactions s5- ider the following transactions for Partytime Toys: Learn Cons Partytime Toys buys $141,800 worth of MegoBlock toys on account with credit terms of 2/10, n/30. Partytime Toys returns $14,100 of the merchandise to MegoBlock due to damage during shipment. Partytime Toys paid the amount due, less the return and discount. oct. 8 11 15 Requirements 1. Journalize the purchase transactions. Explanations are not required. 2. In the final analysis, how much did the inventory cost Partytime Toys? Lea S5-3 Journalizing purchase transactions Consider the following transactions for Derry Drug Stores Jun. 2 Derry buys $23,000 worth of inventory on account with credit terms of 2/15, nv/30, FOB shipping point 4 Derry pays a $110 freight charge. 8 Derry returns $6,200 of the merchandise due to damage during shipment. 14 Derry paid the amount due, less return and discount Re quirements Journalize the purchase transactions. Explanations are not required. 2. In the final analysis, how much did the inventory cost Derry Drug Store? 1. S5-4 Journalizing sales transactions Journalize the following sales transactions for Paul Sportswear. Explanations are required enot Paul sold $66,000 of women's sportswear on account, credit terms are 2/10, n/30. Cost of goods is $33,000. Paul received a $5,000 sales return on damaged goods from the customer. Cost of goods damaged is $2,500. Paul receives payment from the customer on the amount due, less the return and discount Aug. 1 5 10 Journalizing purchase and sales transactions Suppose Muddyriver.com sells 2,000 books on account for $19 each (cost of these books is $22,800), credit terms 1/20, n/45 on October 10, 2016, to The Salem Store. One hundred of these books (cost $1,140) were damaged in shipment, so Muddyriver.com later received the damaged goods from The Salem Store as sales returns on October 13, 2016. The Salem Store paid the balance to Muddyriver.com on October 22, 2016. S5-5 Requirements 1. Journalize The Salem Store's October 2016 transactions. 2. Journalize Muddyriver.com's October 2016 transactions. S5-6 Adjusting for inventory shrinkage Carlas Furniture's unadjusted Merchandise Inventory account at year-end is S62.000 The physical count of inventory came up with a total of $60,800. Journalize the adjusting entry needed to account for inventory shrinkage. to answer Shol t Use the following information Montana Cycles started July with 25 bicycles that cost $36 each. On July 16, Mont bought 35 bicycles at $60 each. On July 31, Montana sold 33 bicycles for $105 each S6-3 Preparing a perpetual inventory record and journal entries Specific na identification Requirements 1. Prepare Montana Cycle's perpetual inventory record assuming the compane the specific identification inventory costing method. Assume that Montana sold 20 bicycles that cost $36 each and 13 bicycles that cost $60 each. 2. Journalize the July 16 purchase of merchandise inventory on account and the July 31 sale of merchandise inventory on account. S6-4 Preparing a perpetual inventory record and journal entries-FIFO Requirements 1. Prepare Montana Cycle's perpetual inventory record assuming the company uses the FIFO inventory costing method. 2. Journalize the July 16 purchase of merchandise inventory on account and the July 3l sale of merchandise inventory on account. S6-5 Preparing a perpetual inventory record and journal entries-LIFO Requirements 1. Prepare Montana Cycle's perpetual inventory record assuming the company uses the LIFO inventory costing method. 2. Journalize the July 16 purchase of merchandise inventory on account and the July 3 sale of merchandise inventory on account. Pre paring a perpetual inventory record and journal entries-Weighted-average Le Requirements are Montana Cycle's perpetual inventory record assuming the company uses the weighted-average inventory costing method ournalize the July 16 purchase of merchandise inventory sale of merchandise inventory on account. on account and the July 31 Note: Short Exercises S6-4, S6-5, and S6-6 must be completed before attempting Short Exercise S6-7 567 Comparing Cost of Goods Sold under FIFO, LIFO, and Weighted-average Refer to Short Exercises S6-4 through S6-6. After completing those exercises, answer the following questions: Requirements 1. Which inventory costing method produced the lowest cost of goods sold? 2. Which inventory costing method produced the highest cost of goods sold? 3. If costs had been declining instead of rising, which inventory costing method would have produced the highest cost of goods sold? S6-8 Applying the lower-of-cost-or-market rule Assume that a Mega Burger restaurant has the following perpetual inventory record for hamburger patties: Cost of Merchandise Date Purchases Goods Sold Inventory on Hand $ 510 210 380 Jul. 9 s 510 $ 300 31 170 At July 31, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $431. Make any adjusting entry needed to apply the lower-of-cost-or-market rule. Merchandise inventory would be reported on the balance sheet at what value on July 31