Exercise 8-30 (Static) General Ledger Exercise; Inventory Transactions (LO8-1,8-2, 8-3, 8-4, 8-5, 8-6, 8-7, 8-8) On January 1, 2021, Displays Incorporated had the following account balances: Accounts Cash Accounts receivable Supplies Inventory Land Accounts payable Notes payable (58, due next year) Common stock Retained earnings Totals Debit Credit $ 22,000 19,000 25,000 60,000 227,000 $ 18,000 20,000 186,000 129,000 $353,000 $353,000 From January 1 to December 31, the following summary transactions occurred: a. Purchased Inventory on account for $330,000. b. Sold inventory on account for $570,000. The cost of the inventory sold was $310,000 c. Received $540,000 from customers on accounts receivable d. Pald freight on Inventory received, $24.000. e. Pald $320,000 to inventory suppliers on accounts payable of $325,000. The difference reflects purchase discounts of $5,000. t. Pald rent for the current year, $42,000. The payment was recorded to Rent Expense. 9. Pald salaries for the current year. $150,000. The payment was recorded to Salaries Expense. Year-end adjusting entries: a. Supplies on hand at the end of the year are $8,000. b. Accrued interest expense on notes payable for the year c. Accrued income taxes at the end of December are $18,000. General General Income Balance Requirement Trial Balance Analysis Journal Ledger Sheet Statement 1. Record each of the transactions listed above in the 'General Journal tab (these are shown as items 1-8) assuming a perpetual inventory system. Review the 'General Ledger' and the Trial Balance' tabs to see the effect of the transactions on the account balances 2. Record adjusting entries on December 31 in the 'General Journal' tab (these are shown as items 9-11). 3. Review the adjusted 'Trial Balance' as of December 31, 2021, in the Trial Balance' tab. 4. Prepare a multiple-step income statement for the period ended December 31, 2021, in the Income Statement tab. 5. Prepare a classified balance sheet as of December 31, 2021, in the 'Balance Sheet' tab. 6. Record the closing entries in the 'General Journal' tab (these are shown as items 12-13), 7. Using the information from the requirements above, complete the 'Analysis' tab. General Journal > On January 1, 2021, Displays Incorporated had the following account balances Accounts Cash Accounts receivable Supplies Inventory Land Accounts payable Notes payable (5), due next year) Common stock Retained earnings Totals Debit Credit $ 22,000 19,000 25,000 60.000 227,000 $ 18,000 20,000 186,000 129,000 $353,000 $353,000 es From January 1 to December 31, the following summary transactions occurred. a. Purchased Inventory on account for $330,000 b. Sold Inventory on account for $570,000. The cost of the inventory sold was $310,000 c. Received $540,000 from customers on accounts receivable, d. Pald freight on Inventory received, $24,000. e. Pald $320,000 to inventory supplers on accounts payable of $325,000. The difference reflects purchase discounts of $5,000 t. Pald rent for the current year. $42.000. The payment was recorded to Rent Expense. 9. Pald salaries for the current year, $150,000. The payment was recorded to Salaries Expense. Year-end adjusting entries. a Supplies on hand at the end of the year are $8,000 D. Accrued interest expense on notes payable for the year Accrued income taxes at the end of December are $18.000 General General Trial Income Require... Balance Ledger Journal Balance Stateme.. Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet On January 1, 2021, Displays Incorporated had the following account balances Accounts Cash Accounts receivable Supplies Inventory Land Accounts payable Notes payable (53, due next year) Common stock Retained earnings Totals Debit Credit $ 22,000 19.000 25,000 60,000 227,000 $ 10,000 20,000 186,000 129,000 $353,000 $353,000 K ences From January 1 to December 31, the following summary transactions occurred: a Purchased Inventory on account for $330,000 b. Sold Inventory on account for $570,000. The cost of the inventory sold was $310,000 c. Received $540,000 from customers on accounts receivable. d. Pald freight on Inventory received, $24,000. e. Paid $320,000 to inventory suppliers on accounts payable of $325,000. The difference reflects purchase discounts of $5,000 t Pald rent for the current year. $42.000. The payment was recorded to Rent Expense. 9. Pald salaries for the current year, $150,000. The payment was recorded to Salaries Expense. Year-end adjusting entries: a Suppiles on hand at the end of the year are $8,000. D. Accrued Interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $18,000 General General Trial Income Require... Balance Analysis Journal Ledger Balance Stateme.. Sheet Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet On January 1 2021, Displays Incorporated had the following account balances Accounta Cash Accounts receivable Supplies Inventory Land Accounts payable Notes payable (53, due next year) Connon stock Retained earnings Totals Debit Credit $ 22.000 19,000 25,000 60,000 227,000 $ 18,000 20,000 186,000 129,000 $353,000 $353,000 es From January 1 to December 31, the following summary transactions occurred: a Purchased Inventory on account for $330,000 D. Sold Inventory on account for $570,000. The cost of the inventory sold was $310,000 Received $540,000 from customers on accounts receivable. d. Pald freight on Inventory received, $24,000 e. Paid $320,000 to Inventory supplers on accounts payable of $325,000. The afference reflects purchase disco of $5,000 t Pald rent for the current year, $42,000. The payment was recorded to Rent Expense. 9. Pald salaries for the current year, $150.000. The payment was recorded to Salaries Expense. Year-end adjusting entries: a Supplies on hand at the end of the year are $8,000. b. Accrued interest expense on notes payable for the year c. Accrued Income taxes at the end of December are $18,000 General General Trial Income Balance Require.. Analysis Journal Ledger Balance Stateme. Sheet Prepare a classified balance sheet as of January 31, 2021. Choose the appropriate accounts to complete the company's balance sheet. The unadjusted, adjusted, or post- closing balances will appear for each account, based on your selection Show less Unadjust Displays Incorporated Balance Sheet December 31, 2021 Assets Liabilities Current Assets Current Limits Cash 22,000 Accounts receivable 19.000 41.000 Total Current Assets Noncurrent Assets Totabates Stockholders' Equity 0 Total Assets Tots StockholdersEquity Total Labs 541,000 Stockholders $ 0 On January 1, 2021 Displays Incorporated had the following account balances: Accounts Cash Accounts receivable Supplies Inventory Land Accounts payable Notes payable (5, due next year) Common atoak Retained earnings Totals Debit Credit $ 22,000 19,000 25,000 60,000 227,000 $ 10,000 20,000 186,000 129,000 $353,000 $353,000 es From January 1 to December 31, the following summary transactions occurred: a Purchased Inventory on account for $330,000. D. Sold inventory on account for $570,000. The cost of the inventory sold was $310,000 c. Received $540,000 from customers on accounts receivable. d. Paid freight on inventory received, $24,000. e. Pald $320,000 to inventory suppliers on accounts payable of $325,000. The difference reflects purchase discounts of $5,000 t Paid rent for the current year. $42,000. The payment was recorded to Rent Expense. 9. Pald salaries for the current year, $150,000. The payment was recorded to Salaries Expense. Year-end adjusting entries: a Suppiles on hand at the end of the year are $8,000. . Accrued interest expense on notes payable for the year. c. Accrued Income taxes at the end of December are $18,000. Balance Analysis General General Trial Income Require... Journal Ledger Balance Stateme.. Sheet Using the information from the requirements above, complete the 'Analysis'. (Calculate the ratios to the nearest 1 decimal place.) Analyze the following for Displays Incorporated: (a) Suppose Displays Incorporated decided to maintain its internal records using FIFO but to use LIFO for external reporting. Assuming the ending balance of inventory under LIFO would have been $85.000, calculate the LIFO reserve. LIFO reserve in (b) Assume Displays Incorporated $60,000 beginning balance of inventory comes from the base year with a cost index of 1.00. The cost index at the end of 2021 of 1.10. Calculate the amount the company would report for inventory using dollar-value LIFO. Ending inventory using dollar-value LIFO: (c) Indicate whether each of the amounts below would be higher or lower when reporting inventory using LIFO (or dollar-value LIFO) instead of FIFO in periods of rising inventory costs and stable inventory quantities 1. Inventory turnover ratio 2. Average days in inventory 3. Gross profit ratio Higher under LIFO Lower under LIFO Lower under LIFO