Date Reed Corp To illustrate the different inventory cost flow assumptions, consider the following example of Russell Company, which purchased inventory at three different times at three different prices. 2 Accounts Receivable-Brady Co. V Sales v 520 X Cost per Unit Cost of Goods Sold v May 1 Purchase May 15 Purchase May 20 Purchase Gnods available for sale 105 25 420 e Inventory 520 005 $ 1,855 required No entry required Russell purchased a total of 105 units, which cost a total of $1,855, On May 31st a customer purchased 35 units. Russell's selling price was $26 per unit. 1,040 X To illustrate the different inventory cost flow assumptions, consider the following example of Russell Company, which purchased inventory at three different times at three different prices. Accounts Payable-Brady Co. ,C140 Cost per T y 8 No entry required Unit 20 240 No entry required May 1 Purchase May 15 Purchase May 20 Purchase Goods available for sale 0 s 12 May 10 Sales Returns and Allowances v 1,040 X 20 4G0 1,040 Accounts Recelvable-Brady Co. Russell purchased a total of 60 units, which cost a total of $1,060. On May 31st a customer purchased 20 units. Russell's selling price was $26 per unit. Merchandise Inventory 1,040 X Cost of Goods Sold v 1,040 May 14 Cash v 1,040 X 1,040 Accounts Receivable Brady Co. Seller Co. Terms: FOB shipping paint Buyer, Ine 5 Accounts Payable-Brady Co. To illustrate Seller Co. sells merchandise to euyer lnc. url account for $1,040. The freight terms are FOB shipping point and Buyer, Inc. pays $51 in cash to the freight company directly when the merchandise is delivered to Buyer Inc. The cost of the merchandise is $797. Both companies use a perpetual inventory system. Cash v Date Debit Fill in the amounts in the sales entries for Seller Co. and the iiventory purchase entries for Buyer Inc. Roll over the accounts for help with the tranisactions. Merchandise Inventoryv Seller Co. Dehit Credit Accounts Payable-Reed Corp. 1,040 1,040 1,040 1,040 Merchandise Inventory v To record the sale to Buyers Inc. record the purchase of irnventory from Seller Ca Cash v t of Goods Sold 797 Accounts d Corp. Merchandise Inventory To record the cost of goods sold to ver Inc. To record the cost of shipping goods to Cost of Goods Sold Merchaidise Inventoryv Reed Corp. is a medium-sized manufacturer of electronic components that supplies Brady Ca. with many component parts. Brady Co. also supplies Reed with some of the finished praducts it develops. Hence, both companics purchase from and sell merchandise to each other. Both comparies are located in Oregon, which has no sales tax, and both campanies use a perpctual inventory system. Thercfore,sales tax dons nat apply to any of these transactions and pau should record merchandise transactions using the perpetual inventary methad. Analyze cach transactian (described by rolling over the date) from the perspective of each party. In the first journal space, record each transaction as it affects Rend Corp., an the appropriate day. Then record the same transaction in the bottom journal space as it affects Brady Co If no entry is required, select "No entry required" and leave the amount boxes blank, If compound entries, for those boxes in which no entry is required, leave the box blank May 14 Accounts Payable Reed Corp. v Cash v Sales Discounts Accounts Receivable-Reed Corp. v Date Reed Corp To illustrate the different inventory cost flow assumptions, consider the following example of Russell Company, which purchased inventory at three different times at three different prices. 2 Accounts Receivable-Brady Co. V Sales v 520 X Cost per Unit Cost of Goods Sold v May 1 Purchase May 15 Purchase May 20 Purchase Gnods available for sale 105 25 420 e Inventory 520 005 $ 1,855 required No entry required Russell purchased a total of 105 units, which cost a total of $1,855, On May 31st a customer purchased 35 units. Russell's selling price was $26 per unit. 1,040 X To illustrate the different inventory cost flow assumptions, consider the following example of Russell Company, which purchased inventory at three different times at three different prices. Accounts Payable-Brady Co. ,C140 Cost per T y 8 No entry required Unit 20 240 No entry required May 1 Purchase May 15 Purchase May 20 Purchase Goods available for sale 0 s 12 May 10 Sales Returns and Allowances v 1,040 X 20 4G0 1,040 Accounts Recelvable-Brady Co. Russell purchased a total of 60 units, which cost a total of $1,060. On May 31st a customer purchased 20 units. Russell's selling price was $26 per unit. Merchandise Inventory 1,040 X Cost of Goods Sold v 1,040 May 14 Cash v 1,040 X 1,040 Accounts Receivable Brady Co. Seller Co. Terms: FOB shipping paint Buyer, Ine 5 Accounts Payable-Brady Co. To illustrate Seller Co. sells merchandise to euyer lnc. url account for $1,040. The freight terms are FOB shipping point and Buyer, Inc. pays $51 in cash to the freight company directly when the merchandise is delivered to Buyer Inc. The cost of the merchandise is $797. Both companies use a perpetual inventory system. Cash v Date Debit Fill in the amounts in the sales entries for Seller Co. and the iiventory purchase entries for Buyer Inc. Roll over the accounts for help with the tranisactions. Merchandise Inventoryv Seller Co. Dehit Credit Accounts Payable-Reed Corp. 1,040 1,040 1,040 1,040 Merchandise Inventory v To record the sale to Buyers Inc. record the purchase of irnventory from Seller Ca Cash v t of Goods Sold 797 Accounts d Corp. Merchandise Inventory To record the cost of goods sold to ver Inc. To record the cost of shipping goods to Cost of Goods Sold Merchaidise Inventoryv Reed Corp. is a medium-sized manufacturer of electronic components that supplies Brady Ca. with many component parts. Brady Co. also supplies Reed with some of the finished praducts it develops. Hence, both companics purchase from and sell merchandise to each other. Both comparies are located in Oregon, which has no sales tax, and both campanies use a perpctual inventory system. Thercfore,sales tax dons nat apply to any of these transactions and pau should record merchandise transactions using the perpetual inventary methad. Analyze cach transactian (described by rolling over the date) from the perspective of each party. In the first journal space, record each transaction as it affects Rend Corp., an the appropriate day. Then record the same transaction in the bottom journal space as it affects Brady Co If no entry is required, select "No entry required" and leave the amount boxes blank, If compound entries, for those boxes in which no entry is required, leave the box blank May 14 Accounts Payable Reed Corp. v Cash v Sales Discounts Accounts Receivable-Reed Corp. v