Question
Flamboro Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on
Flamboro Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account. Use an inventory cost chart and an accounting chart to help you analyze these transactions, and then answer the questions below.
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| Number of items | Unit cost or selling price |
| July 1 | Opening balance | 45 | $30 |
| July 5 | Purchase | 20 | $32 |
| July 7 | Purchase of July 5 items returned to supplier | -5 |
|
| July 10 | Sale | 45 | $40 |
| July 12 | Purchase | 25 | $34 |
| July 17 | Sale | 20 | $50 |
| July 24 | Purchase | 35 | $35
|
How will the July 5 purchase of inventory be recorded? Select all that apply. (2 points)
increase Inventory
increase Accounts Payable
increase Cost of Goods Sold
increase Purchases
decrease Cash
decrease Cost of Goods Sold
How will the July 7 purchase return be recorded? Select all that apply. (2 points)
increase Purchase Returns
increase Cost of Goods Sold
decrease Inventory
increase Cash
decrease Accounts Payable
decrease Cost of Goods Sold
What is the value of the inventory after the July 7 transaction? (1 point)
Answer
How will the July 10 sale be recorded? Select all that apply. (4 points)
decrease Sales
increase Cash
decrease Inventory
increase Sales
increase Inventory
increase Cost of Goods Sold
decrease Accounts Receivable
decrease Cost of Goods Sold
decrease Cash
increase Accounts Receivable
What amount of cost of goods sold will be recorded on July 10? (1 point)
Answer
What is the value of the inventory after the July 10 transaction? (1 point)
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What is the gross profit percentage on the July 10 sale? (1 point)
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What is the amount of gross profit on the July 10 sale? (1 point)
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What is the value of the inventory after the July 12 transaction? (1 point)
Answer
What amount of cost of goods sold will be recorded on July 17? (1 point)
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What is the value of the inventory after the July 17 transaction? (1 point)
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What is the gross profit percentage on the July 17 sale? (1 point)
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What is the amount of gross profit on the July 17 sale? (1 point)
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What is the value of the inventory after the July 24 transaction? (1 point)
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What is the total revenue for the month? (1 point)
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What is the total amount of gross profit for the month? (2 points)
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What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $20? For this question, start your answer with a + sign if an increase, a - sign if a decrease, or enter 0 if no adjustment is needed. (2 points)
Answer
What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $35? For this question, start your answer with a + sign if an increase, a - sign if a decrease, or enter 0 if no adjustment is needed. (2 points)
Answer
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