C7-3 through C7-5 (Algo) (Supplement 7A) Recording Inventory Purchases, Allowances, Sales, and Shrinkage Using Perpetual FIFO, Weighted Average, LIFO (Chapters 6 and 7) [LO 6-2, LO 6-3, LO 6-4, LO 7-S1] [The following information applies to the questions displayed below.] Tracer Advance Corporation (TAC) sells a tracking implant that veterinarians surgically insert into pets. TAC began January with an inventory of 200 tags purchased from its supplier in November last year at a cost of $18 per tag. plus 100 tags purchased in December last year at a cost of $21 per tag. TAC uses a perpetual inventory system to account for the following transactions. January 3 TAC gave 250 tags to a courier company (UPS) to deliver to veterinarian customers. The sales price was $66 per tag, and the sales terms were n/30, FOB shipping point. January 4 UPS confirmed that all 250 tags were delivered today to customers. January 9 TAC ordered 350 tags from its supplier. The supplier was out of stock but promised to send them to TAC as soon as possible. TAC agreed to a cost of $28 per tag, n/3. January 19 The 350 tags ordered on January 9 were shipped to and received by TAC today. TAC complained about the delay between order and shipment date, so the supplier reduced the amount TAC owed by granting an allowance of $1 per tag ( $350 total). January 23 TAC gave 375 tags to UPS, which were delivered "same day" to veterinarian customers at a price of $66 per tag, n/30, FOB shipping point. January 28 TAC received cash payment from customers for 125 of the tags delivered January 4. January 31 TAC counted its inventory and determined 20 tags were on hand. TAC made a "book-tophysical adjustment" to account for the missing 5 tags. Journal entry worksheet 1 4 5 Record the tags delivered to customers. Note: Enter debits before credits. Journal entry worksheet 1 2 3 4 5 Record the loss of inventory at its cost. Note: Enter debits before credits. Journal entry worksheet Record the purchase of tags after deducting the allowance given by supplier for delay between order and shipment. Note: Enter debits before credits. Journal entry worksheet 34567 Record the cost of tags sold to veternarian customers. Note: Enter debits before credits. Journal entry worksheet Record the sale of tags to veterinarian customers. Note: Enter debits before credits. Journal entry worksheet Record the cost of tags sold to veternarian customers. Note: Enter debits before credits. Journal entry worksheet Record the order for tags made by TAC from its supplier. Note: Enter debits before credits. Journal entry worksheet 1 2 4 5 Record the cash collected from customers. Note: Enter debits before credits. Journal entry worksheet Record the sale of tags to veterinarian customers. Note: Enter debits before credits
