Great Adventures Problem AP6-1

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Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet wont damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $502 each.

Jul.		17		Purchased 52 watches for $7,904 ($152 per watch) on account.
Jul.		31		Sold 42 watches for $21,084 cash.
Aug.		12		Purchased 42 watches for $6,804 ($162 per watch) cash.
Aug.		22		Sold 32 watches for $16,064 on account.
Sep.		19		Paid for watches purchased on July 17.
Sep.		27		Receive cash of $10,200 for watches sold on account on August 22.
Oct.		27		Purchased 82 watches for $14,104 ($172 per watch) cash.
Nov.		20		Sold 92 watches for $46,184 cash.
Dec.		4		Purchased 104 watches for $18,928 ($182 per watch) on account.
Dec.		8		Sold 42 watches for $21,084 on account.

Great Adventures Problem AP6-1 Part 2 2. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $102 per watch. a. Record any necessary adjustment on December 31, 2022, related to this Information. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 Record the adjustment for inventory. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31, 2022 Record entry Clear entry View general journal b. For what amount would MU Inventory be reported in the December 31, 2022, balance sheet? MU Inventory c. Prepare an updated gross profit section of a partial Income statement accounting for this additional information. GREAT ADVENTURES, INC. Partial Income Statement For the Year Ended December 31, 2022 Sales Revenue Cost of Goods Sold Gross Profit