Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

BAYWEST Stationery S: Supplies located in Montego Bay, Jamaica, sells a variety of school supplies including several brands of tablets. The business uses a perpetual

image text in transcribed
image text in transcribed
BAYWEST Stationery S: Supplies located in Montego Bay, Jamaica, sells a variety of school supplies including several brands of tablets. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. BAYWEST began the third quarter (July to September) of 2020 with 20(Afcatef) tablets at a total cost of $124,800. During the quarter, with the onset of the COVlD-lg pandemic, the business completed the following transactions relating to the "Alca tel\" tablets. July 8 105 tablets were purchased at a cost of $6,140 each. In addition, the business paid afreight charge of $310 cash on each tablet to have the inventory shipped from the point of purchase to their warehouse. July 31 The sales forJuly were 85 tablets which yielded total sales revenue of $809,030. (25 of these tablets were sold on account to longstanding customers) August 4 A new batch of 70 tablets was purchased at a total cost of $486,500 August 10 6 of the tablets purchased on August 4 were returned to the supplier; as they were not of the model ordered. August 31 During the month 62 tablets were sold at a price of $10,050 each. September 4 A customer, to whom 9 tablets were sold during the rst business day of August, returned 2 of the instruments, as they were of another brand. September 10 Owing to an increased demand, a further 118 tablets were purchased at a cost of $7,800 each; these were subject to a trade discount of 2% each. September 30 124 tablets were sold during September at a unit selling price of $1 1,060. September 30 An actual count of inventory was carried out which revealed that there were 35 units of the \"Alcatel\" brand of merchandise in the store room. Unless otherwise stated, assume that all purchases were on account and received on the dates stated. Required: (A) Prepare a perpetual inventory record for this merchandise, using the rst in, rst out (FIFO) method of inventory valuation to determine BAYWEST's cost of goods sold for the quarter and the value of ending. (21 marks) (B) Given that selling, distribution and administrative costs associated with the Alcatel brand of tablets for the quarter were $34,840, $42,100 and $173,760 respectively, prepare an income statement for BAYI'VEST Stationery S: Supplies (Alcatel) for the quarter ended September 30, 2020. (6 marks) (C) Journalize the transactions for the month ofJanuary, assuming the company uses a: - Periodic inventory system - Perpetual inventory system (8 marks) (D) Wheels 62 Deals Limited uses 60,000 batteries each year in its production of motorcycles at a cost of $450 per battery. The cost of placing an order is $75.00. The cost of holding one unit of inventory for one year is 0.5% of the unit purchase price. Currently, Wheels 8: Deals Limited places 12 orders of 5,000 batteries per year. Compute the cost Wheels 8: Deals' current inventory policy. Is this the minimum cost? Explain

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Managerial Accounting

Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

5th Canadian edition

77429494, 1259105709, 1260480798, 978-1259105708

More Books

Students also viewed these Accounting questions

Question

1. Maintain my own perspective and my opinions

Answered: 1 week ago

Question

2. What do the others in the network want to achieve?

Answered: 1 week ago