ASSIGNMENT 4 - CHAPTERS 5&6 Section 001 60 marks DUE: November 30, 2020 11:30 a.m. (40 marks) QUESTION 1 Keokea Merchandising had the following transactions in September Prepare journal entries for these transactions assuming Keokea uses a perpetual inventory system mit Explanations Sept 2 Keokea received an $26.000 invoice from one of its suppliers Terms were 3/10 1/30, FOB destination. The freight bill amounting to $1.200 was paid Keokea returned $2,750 of the merchandise billed on Oct 2 because it was defective. 4 5 Keokea sold $9.500 of merchandise on account, terms 2845.00. The cost of the merchandise sold was $6.800 15 Keokea paid the invoice dated Oct 2 15 A customer returned $3,800 of merchandise sold on Das. The cost of the returned merchandise was $2.720. 19 Keokea received payment on the remaining amount due from the sale of Oct. 5. 30 Inventory was counted and it was determined that the records show that the inventory in the records is higher than the actual inventory counted by $1.850. The records should be adjusted General Journal Date Accounts Debit Credit Required: For (a) and (b) assume the company uses the periodic inventory system Calculate the gross proft (margin) if the company uses first in, first-out (FIFO) ANSWER (b) Calculate the value of the ending inventory if the company uses weighted average. ANSWER QUESTION 2 (CONTINUED) For (c) and (d) assume the company uses the perpetual inventory system What is the value of the ending inventory the company uses FIFO? (d) What is the cost of goods sold for the Feb 25 sale if the company uses FIFO to cost the inventory? ANSWER QUESTION 3 (8 marks) The inventory of Wailua Company was destroyed by fire on Aug 1. From an examination of the accounting records, the following data for the first seven months (Jan to July) of the year are obtained: 18,000 Sales $495,000 Sales Returns and Allowances Purchases 310,500 Freight-in 9,000 Purchase Returns and Allowances 12.600 Required: Determine the merchandise lost by fire using the Gross Profit Method, assuming a beginning inventory of $27,000 and a gross profit rate of 30% on net sales