BUAD 111 Project - Part 5 Your business is growing and operations in 2021 have been quite successful Your business has purchased more equipment. It has also added another revenue stream selling juicing machines to the public. You have a friend at Dilan Manufacturing that has agreed to sell you high-quality Juicing machines at a wholesale price so you can sell them to the publicat a profit The business has the following trial balance as at November 30,2021 Name of Your Business Adjusted trial balance November 30, 2021 $ 5,037 2.150 2.250 118 4,650 $ 210 1.540 63 652 110 Cash 130 Accounts receivable 135 Inventory 140 Supplies 160 Equipment 161 Accumulated depreciation Accounts payable 230 Unearned revenue 240 Wages payable 245 Interest payable 260 Notes payable 310 capital 320 drawings 410 Sales revenue 505 Cost of goods sold 508 Advertising expense 515 Depreciation expense 527 Interest expense 540 Repairs expense 550 Supplies expense Telephone expense 570 Wagas expense Totals 21 5,000 9,562 5,778 12.800 6,540 425 1,410 256 107 279 294 144 $ 297438 520 438 563 The 32250 inventory balance is comprised of 3 juicing machines that cost $750 each. The not payable is to the bank and interest is paid on the 1st day of each month. You had paid off the loan to your mother early in 2021 mail/attachment_log/65149/Part-Instr.pdffforcedownload 1 The following transactions happen during the month of December, 2021 Dec 1 You paid the November interest owing on the bank loan. You issued cheque 2 You collected $990 cash from a customer, on account, to whom you had previously sold a juicing machine 9 You paid the November 30 balance of accounts payable. You Issued cheque #1318 11 You purchased, on account, 3 more juicing machines for $780 each (excluding freight). The purchase invoice also included a $51 freight charge for the cost of transporting the machines from the vendor to your place. NOTE: Since you will use the FIFO cost-flow assumption, you should make a "FIFO Inventory Record" (See textbook Illustration 6.5) for your Juicing Machine inventory 12 You buy $202 of supplies such as protein powder, cups, straws, and fresh fruit and vegetables, on account You sold, on account, two juicing machines to Bill's Fitness for $990 each You will use the FIFO method of recording inventory transactions 21 You make and deliver a batch of smoothies to Fred's Yoga Studio and you Issue a sales invoice of $365, The Invoice is payigle in 30 days 23 You paid the amount owing on the December 11 purchase. You issued 27 You purchased, on account 2 more juicing machines for $790 each (excluding freight). The purchase invoice also included a $40 freight charge for the cost of transporting the machines from the vendor to your place. 28 You paid $85 cash for repairs done to some equipment. You issued cheque 29 You sold, on account, two juicing machines to the owners of City Contemporary Dance Studio (Remember that freight is part of inventory). The selling price of each machine was $990. 30 You received a $103 e-bill for your business cell phone service for December and you paid it immediately. You issued cheque #321. 31 You collected $1980 cash from a customer whom you had, on December 14, sold two juicing machines 31 You paid a casual worker $73 cash for wages for work done in December You issued cheque #322 14 Instructions a. Prepare the FIFO inventory record (see Illustration 6.5 in the textbook) to determine the cost of goods told and ending inventory resulting from the inventory purchases and sales noted in the transactions above. You will need the cost of goods sold to complete the journal entry for the December 14 and 29 sales b. Prepare the journal entries for the transactions that occurred in December, 2021. For transactions affecting Cash', include the cheque number in the explanation e Post the journal entries to the general ledger (Provided in the Excel file "Forms Parts5-6-see Moodle). d. Prepare an unadjusted trial balance the inventory, it should correspond as closely as possible. FIFO often does match the actual physical flow of merchandise, because it generally is good business Although the cost formacions a company does not have to match the actual physical movement of cost of goods so it is used by a sanety of companies practice to sell the oldest units first particularly if the goods are sure to spinge op We will use the information for Ingrid's Lighting Boutique's 23W compact fluorescent light bulbs as shown in station6.4 to prepare a perpetual inventory record using the FIFO cost formala. Perpetual inventory records are organised to show how the cost of goods sold for each sale is calculated. They also show the cost and number of units in inventory after each purchase and each sale. That is to say, the inventory record is continually updated. Illustration 6.5 shows the completed inventory record. An explanation of each transaction is provided below corresponding to the number on the left in the illustration. A B c D E F G 10 K L 1 FIFO M 2 Date Purchases Cost of goods sold 3 Units Cost Inventory balance Total Units Cost Total Units Cost After the purchase on 40) Jan 1 Total Beginning inventory April 15, the inventory 5 100 $10.00 $ 1.000.00 balance consists of two 100 $10.00 $1,000.00 6 (2) Apr, 15 1001 12.00 1,200.00 100 7 10.00 1,000.00 tiers totaling $2,200.00 100 12.00 8 (3) 1,200.00 Total cost of goods May 1 100 $10.00 $1.000.00 sold for the units sold 9 25 12.00 300.00 75 12.00 900.000 on May 1 is $1,300.00 10 (4) Aug. 24 300 14.00 4 200.00 75 12.00 900.00 11 Inventory after the 300 14.00 1.200,00 Sept. 1 sale on May 1 consists 75 12.00 900.00 13 275) 14.00 3,850,00 of only one tier - 75 25 14.00 350.00 units totalling $900,00 1416) Nov. 27 400 15.00 6.000.000 25 14.00 350.00 15 400 15.00 6.000.00 16 1712 900 $12.400.00 475 $6,050.00 425 $6,350.00 18 19 Cost of goods available for sale Cost of goods sold Ending inventory 125 ILLUSTRATION 6.5 FIFO Inventory record 1. A perpetual inventory record starts with the inventory balance at the beginning of the year. Ou January 1, inventory consisted of 100 units costing $10.00 each for a total cost of $1,000.00 2. On April 15, the company purchases 100 units costing $12.00 each for a total purchase cost of $1,200.00. Inventory now consists of two tiers: 200 unite costing $19,00 each and 100 units conting $12.00 each. Total inventory is 200 units at a total cost of $3,200 ($1,000.00 $1,200.00). The FIFO cost formula requires costs in tiens to be tracked separately because the earliest costs are the first to be assigned to sales. In Chapters, we learned how to prepare the journal entry for purchase in a perpetual system. As a reminder the journal entry to record the purchase is Weve dated and me Merchandise Inventory Apr. 15 1.200 Give yer Accounts Payable or Cash ] 1,200 Aa 20 PM BUAD 111 Project - Part 5 Your business is growing and operations in 2021 have been quite successful Your business has purchased more equipment. It has also added another revenue stream selling juicing machines to the public. You have a friend at Dilan Manufacturing that has agreed to sell you high-quality Juicing machines at a wholesale price so you can sell them to the publicat a profit The business has the following trial balance as at November 30,2021 Name of Your Business Adjusted trial balance November 30, 2021 $ 5,037 2.150 2.250 118 4,650 $ 210 1.540 63 652 110 Cash 130 Accounts receivable 135 Inventory 140 Supplies 160 Equipment 161 Accumulated depreciation Accounts payable 230 Unearned revenue 240 Wages payable 245 Interest payable 260 Notes payable 310 capital 320 drawings 410 Sales revenue 505 Cost of goods sold 508 Advertising expense 515 Depreciation expense 527 Interest expense 540 Repairs expense 550 Supplies expense Telephone expense 570 Wagas expense Totals 21 5,000 9,562 5,778 12.800 6,540 425 1,410 256 107 279 294 144 $ 297438 520 438 563 The 32250 inventory balance is comprised of 3 juicing machines that cost $750 each. The not payable is to the bank and interest is paid on the 1st day of each month. You had paid off the loan to your mother early in 2021 mail/attachment_log/65149/Part-Instr.pdffforcedownload 1 The following transactions happen during the month of December, 2021 Dec 1 You paid the November interest owing on the bank loan. You issued cheque 2 You collected $990 cash from a customer, on account, to whom you had previously sold a juicing machine 9 You paid the November 30 balance of accounts payable. You Issued cheque #1318 11 You purchased, on account, 3 more juicing machines for $780 each (excluding freight). The purchase invoice also included a $51 freight charge for the cost of transporting the machines from the vendor to your place. NOTE: Since you will use the FIFO cost-flow assumption, you should make a "FIFO Inventory Record" (See textbook Illustration 6.5) for your Juicing Machine inventory 12 You buy $202 of supplies such as protein powder, cups, straws, and fresh fruit and vegetables, on account You sold, on account, two juicing machines to Bill's Fitness for $990 each You will use the FIFO method of recording inventory transactions 21 You make and deliver a batch of smoothies to Fred's Yoga Studio and you Issue a sales invoice of $365, The Invoice is payigle in 30 days 23 You paid the amount owing on the December 11 purchase. You issued 27 You purchased, on account 2 more juicing machines for $790 each (excluding freight). The purchase invoice also included a $40 freight charge for the cost of transporting the machines from the vendor to your place. 28 You paid $85 cash for repairs done to some equipment. You issued cheque 29 You sold, on account, two juicing machines to the owners of City Contemporary Dance Studio (Remember that freight is part of inventory). The selling price of each machine was $990. 30 You received a $103 e-bill for your business cell phone service for December and you paid it immediately. You issued cheque #321. 31 You collected $1980 cash from a customer whom you had, on December 14, sold two juicing machines 31 You paid a casual worker $73 cash for wages for work done in December You issued cheque #322 14 Instructions a. Prepare the FIFO inventory record (see Illustration 6.5 in the textbook) to determine the cost of goods told and ending inventory resulting from the inventory purchases and sales noted in the transactions above. You will need the cost of goods sold to complete the journal entry for the December 14 and 29 sales b. Prepare the journal entries for the transactions that occurred in December, 2021. For transactions affecting Cash', include the cheque number in the explanation e Post the journal entries to the general ledger (Provided in the Excel file "Forms Parts5-6-see Moodle). d. Prepare an unadjusted trial balance the inventory, it should correspond as closely as possible. FIFO often does match the actual physical flow of merchandise, because it generally is good business Although the cost formacions a company does not have to match the actual physical movement of cost of goods so it is used by a sanety of companies practice to sell the oldest units first particularly if the goods are sure to spinge op We will use the information for Ingrid's Lighting Boutique's 23W compact fluorescent light bulbs as shown in station6.4 to prepare a perpetual inventory record using the FIFO cost formala. Perpetual inventory records are organised to show how the cost of goods sold for each sale is calculated. They also show the cost and number of units in inventory after each purchase and each sale. That is to say, the inventory record is continually updated. Illustration 6.5 shows the completed inventory record. An explanation of each transaction is provided below corresponding to the number on the left in the illustration. A B c D E F G 10 K L 1 FIFO M 2 Date Purchases Cost of goods sold 3 Units Cost Inventory balance Total Units Cost Total Units Cost After the purchase on 40) Jan 1 Total Beginning inventory April 15, the inventory 5 100 $10.00 $ 1.000.00 balance consists of two 100 $10.00 $1,000.00 6 (2) Apr, 15 1001 12.00 1,200.00 100 7 10.00 1,000.00 tiers totaling $2,200.00 100 12.00 8 (3) 1,200.00 Total cost of goods May 1 100 $10.00 $1.000.00 sold for the units sold 9 25 12.00 300.00 75 12.00 900.000 on May 1 is $1,300.00 10 (4) Aug. 24 300 14.00 4 200.00 75 12.00 900.00 11 Inventory after the 300 14.00 1.200,00 Sept. 1 sale on May 1 consists 75 12.00 900.00 13 275) 14.00 3,850,00 of only one tier - 75 25 14.00 350.00 units totalling $900,00 1416) Nov. 27 400 15.00 6.000.000 25 14.00 350.00 15 400 15.00 6.000.00 16 1712 900 $12.400.00 475 $6,050.00 425 $6,350.00 18 19 Cost of goods available for sale Cost of goods sold Ending inventory 125 ILLUSTRATION 6.5 FIFO Inventory record 1. A perpetual inventory record starts with the inventory balance at the beginning of the year. Ou January 1, inventory consisted of 100 units costing $10.00 each for a total cost of $1,000.00 2. On April 15, the company purchases 100 units costing $12.00 each for a total purchase cost of $1,200.00. Inventory now consists of two tiers: 200 unite costing $19,00 each and 100 units conting $12.00 each. Total inventory is 200 units at a total cost of $3,200 ($1,000.00 $1,200.00). The FIFO cost formula requires costs in tiens to be tracked separately because the earliest costs are the first to be assigned to sales. In Chapters, we learned how to prepare the journal entry for purchase in a perpetual system. As a reminder the journal entry to record the purchase is Weve dated and me Merchandise Inventory Apr. 15 1.200 Give yer Accounts Payable or Cash ] 1,200 Aa 20 PM