Exam 3 Chapter 5 & 6 Merchandising and Inventories

Name:_________________________ Date:___________

1. Journalizing purchase transactions (3pts.)

Consider the following transactions for Partytime Toys:

Requirements

1.Journalize the purchase transactions. Explanations are not required.

2.In the final analysis, how much did the inventory cost Partytime Toys?

Requirement 1

Date	Accounts and Explanation	Debit	Credit
Oct. 8
Oct. 11
Oct. 15

Requirement 2

2. Journalizing purchase transactions (4pts.)

Consider the following transactions for Derry Drug Store:

Requirements

1.Journalize the purchase transactions. Explanations are not required.

2.In the final analysis, how much did the inventory cost Derry Drug Store?

Requirement 1

Date	Accounts and Explanation	Debit	Credit
Jun. 2
4
8
14

Requirement 2

3. Journalizing sales transactions (5pts)

Journalize the following sales transactions for Paul Sportswear. Explanations are notrequired.

Date	Accounts and Explanation	Debit	Credit
Aug. 1
5
10

4. Journalizing purchase and sales transactions (8pts.)

Suppose Muddyriver.com sells 2,000 books on account for $19 each (cost of these books is $22,800), credit terms 1/20, n/45 on October 10, 2016, to The Salem Store. One hundred of these books (cost $1,140) were damaged in shipment, so Muddyriver.com later received the damaged goods from The Salem Store as sales returns on October 13, 2016. The Salem Store paid the balance to Muddyriver.com on October 22, 2016.

Requirements

1.Journalize The Salem Stores October 2016 transactions.

2.Journalize Muddyriver.coms October 2016 transactions.

Requirement 1

Date	Accounts and Explanation	Debit	Credit
Oct. 10
13
22

Requirement 2

Date	Accounts and Explanation	Debit	Credit
Oct. 10
13
22

5. Adjusting for inventory shrinkage (extra credit 1pt)

Carlas Furnitures unadjusted Merchandise Inventory account at year-end is $62,000. The physical count of inventory came up with a total of $60,800. Journalize the adjusting entry needed to account for inventory shrinkage.

Date	Accounts and Explanation	Debit	Credit
Dec. 31

6. Journalizing closing entries (extra credit 4pts)

Rockwall RV Centers accounting records include the following accounts at December 31, 2016.

Requirements

1.Journalize the required closing entries for Rockwall.

Requirement 1

Date	Accounts and Explanation	Debit	Credit
Dec. 31
31
31
31

7. Preparing a perpetual inventory record and journal entriesFIFO (5pts)

Montana Cycles started July with 25 bicycles that cost $36 each. On July 16, Montana bought 35 bicycles at $60 each. On July 31, Montana sold 33 bicycles for $105 each.

Requirements

1.Prepare Montana Cycles perpetual inventory record assuming the company uses the FIFO inventory costing method.

Requirement 1

Perpetual Inventory Record: FIFO

	Purchases			Cost of Goods Sold				Inventory on Hand
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost		Quantity	Unit Cost	Total Cost
Jul. 1								25 units	$ 36	= $ 900	$ 900
16
31
Totals	35 units		$ 2,100	33 units			$ 1,380	27 units			$ 1,620