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Could you demonstrate how to acquire the solution to part D of this question, please? Compute the gross profit (loss) on Thompson Plumbing's transactions during
Could you demonstrate how to acquire the solution to part D of this question, please?
Compute the gross profit (loss) on Thompson Plumbing's transactions during September and October. (Enter all losses with a minus sign) Compute the gross profit (loss) on Thompson Plumbing's transactions during September and October if a cash-basis accounting system was used. (Hint: In a cash-basis system, only transactions that result in cash being received or paid are recorded.) (Enter all losses with a minus sign) \begin{tabular}{|c|c|l|c|c|} \hline \multicolumn{1}{|c|}{ No } & Transaction & \multicolumn{1}{c|}{ General Journal } & Debit & Credit \\ \hline 1 & 1 & Inventory & & \\ \hline & & Revaluation of inventory to market value & & \\ \hline \end{tabular} Thompson Plumbing Inc. is a wholesaler of plumbing accessories. Thompson Plumbing began operations in September of the current year and engaged in the following transactions during September and October of this year. Thompson Plumbing uses a perpetual inventory system. Sept.03 Purchased $278,000 of plumbing accessories, terms n/30. Sept.15 Sold $218,000 of plumbing accessories, terms n/60. The cost of the accessories sold is $139,000. Sept. 28 Purchased $398,000 of plumbing accessories, terms n/45. Oct.03 Settled the $278,000 purchase of September 3 . Oct.15 Sold $545,000 of plumbing accessories, terms n/60. The cost of the accessories sold is $338,000. Oct.27 Purchased $578,000 of plumbing accessories, terms n/30. Required: a. Compute the gross profit (loss) on Thompson Plumbing's transactions during September and October. b. Compute the gross profit (loss) on Thompson Plumbing's transactions during September and October if a cash-basis accounting system was used. (Hint: In a cash-basis system, only transactions that result in cash being received or paid are recorded.) d. Assume that the fair value of Thompson Plumbing's inventory at October 31 is $995,000. A potential lender asks Thompson Plumbing to prepare a fair-value-based balance sheet. Prepare the journal entry to reflect inventory at fair value. (Hint: Increase the Inventory account by the difference between fair value and book value with the offset to an account titled Revaluation of Inventory to Market Value.)Step by Step Solution
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