a) Big Boy Company began September, 2020 with 40 units (of inventory X) that cost $24 each. During the month, Big Boy made the following purchases of inventory item X at cost:

Sept 3 100 units @ $30

Sept 18 200 units @ $25

Sept 23 60 units @ $33

Big Boy sold 300 units (280 units on Sept 22 and 20 units on Sept 30), and at September 30 the ending inventory consists of 100 units. The sale price of each unit was $70.

Required:

1. Determine the cost of goods sold and ending inventory amounts under:

(a) weighted-average cost under the periodic system and

(b) FIFO cost assuming the periodic system is used. Round weighted-average cost per unit to two decimal places, and round all other amounts to the nearest dollar.

2. Prepare 's income statement in good form for Sept, 2020 . Report gross profit. Operating expenses totalled $2,700. The company uses FIFO costing for inventory. The income tax rate is 20%.

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Question b)

On January 1, 2020, Didgeridoo Corporation had the following shareholders equity accounts:

Didgeridoo Corporation

Balance Sheet (partial)

January 1, 2020

Shareholders equity:

Common shares (unlimited # of shares authorized,

60,000 shares issued) $ 450,000

Retained earnings 1,050,000

Total shareholders equity $1,500,000

During the year, the following transactions occurred:

Jan. 16 Declared a $1 cash dividend per share to shareholders of record on January 31, payable February 16. The date of record is Jan 31.

Feb. 11 Issued 1,000 common shares in exchange for land with a fair market value of $12,000.

Feb. 16 Paid the dividend declared in January.

Apr. 18 Declared and distributed a 10% stock dividend to common shareholders of record on April 18. On April 18, the market price of each share was $15.

July 14 Announced a 3-for-1 stock split. The market price per share prior to the announcement was $15.

Dec. 22 Repurchased 4,000 companys own shares on the open market when the market price was $15/share. Assume that the weighted-average cost per share was $14.50.

Required:

1. Journalize the transactions noted above (Journal entry explanations are not required, but of course, account names are required.)

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Question c)

Pandorra Products Inc. generated sales for the current month of 200 units at $180 each, subject to GST/HST sales tax of 10%. All sales are on account. The product sold is not GST/HST tax exempt, therefore the customer must bear the cost. Each unit carries a 6-month warranty. Pandorra Products Inc. promises to repair the unit should it become defective. The estimated cost per unit to the company to honour the warranty is $30 and experience has shown that approximately 8% of all units will have to be repaired during the warranty period. The manufacturing cost per unit is $80 per unit.

Required: Prepare all journal entries for the following:

1. Record sales for the current month including the taxes collected. (Note that the company uses a perpetual inventory system.)

2. Record the estimated warranty liability associated with the current month's sales.

3. Assume that 20 units from the sales total above were returned for repair work. The cost per unit to repair was $32. Record the entry to account for the warranty work. Assume that Pandorra pays a third party to complete the repairs.

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