5 Part 1 Sales related and purchase related transactions. 6 7 8 The following were selected from among the transactions completed by the Brown Company during May of the current year; prepare journal entries. 9 10 11 4-May Sold merchandise for cash, $40,000. The cost of the merchandise sold was $28,000. 12 13 5 Sold merchandise on VISA, $110,000. The cost of merchandise sold was $85,000. 14 15 5 Purchased merchandise on account from Black Co., list price $60,000, trade discount 25%, freight of $400, terms FOB shipping point, 1/10, n/eom. 16 17 18 7 Purchased merchandise on account from Blue Co., $45,000, terms FOB shipping point, 2/10, n/30, with prepaid freight of $400 paid by the seller. 19 20 21 12 Sold merchandise on account to Red Co., list price $20,000, terms 2/15, n/30. The cost of merchandise sold $9,000. 22 23 24 12 Buyer returned $15,000 of merchandise purchased on May 7 from Blue Co. 25 14 Paid Black on account, for purchase of May 5. 26 27 28 16 Paid Blue Co. on account for purchase of May 7 less return of May 12. 29 30 22 Sold merchandise on account to Yellow Co., $40,000, terms 2/10, n/30. The cost of merchandise sold was $25,000. 31 32 33 25 Received merchandise returned by Yellow co. from sale of May 22, $6,000. The cost of the returned merchandise was $2,500. 34 35 36 28 Received cash on account from sale of May 12 to Red Co. 37 38 31 Paid VISA service fee of $8,000. 39 40 Part 2 What does FOB mean? 41 42 43 What are the two types of FOB? 44 45 What account does the seller charge (debit) when she pays her own freight charges? 46 47 What account does the buyer charge (debit) when she pays her own freight charges? 48 49 What account does the seller charge (debit) when she pays the buyer's freight? 50 51 52 Part 3 53 54 55 56 Per 57 58 59 60 61 Use the information below to determine the number of units in ending inventory and the ending inventory value using the perpetual inventory system for FIFO. ($) Number Date Transactio of units unit Apr. 3 Inventory 800 8 Purchase 820 11 Sale 40 30 Sale 30 May 8 Purchase 60 850 10 Sale 28 Purchase 80 900 30 60 62 63 64 65 66 Sale 20 15 19 67 Part 4 There are 10 units in ending inventory compute the value of the ending inventory using the periodic inventory method. Compute the answer using FIFO, LIFO and the average cost methods. (round your answer to the nearest whole number) 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 Number Date Transactio of units Apr. 3 Inventory 2 8 Purchase 2 11 Purchase 3 30 Purchase 2 May 8 Purchase 3 10 Purchase 3 19 Purchase 3 28 Purchase 3 June 5 Purchase 3 16 Purchase 4 21 Purchase 4 Purchase Price Per unit 10 15 20 25 25 30 30 35 40 40 Cost Per Purchase 20 30 60 50 75 90 90 105 120 160 180 150 3 mm 45 50 28 3 90