only answer the gross cost method and net cost method of all these questions kindly

B Big Oak Lumber is a lumber yard on Angel Island. Some of Big Oak's transactions during the current year are as follows: Apr. 15 Sold lumber on account to Hard Hat Construction, \$19,700. The inventory subsidiary ledger shows the cost of this merchandise was $10,300. Apr. 19 Purchased lumber on account from LHP Company, \$3,700. May 10 Collected in cash the $19,700 account receivable from Hard Hat Construction. May 19 Paid the $3,700 owed to LHP Company. Dec. 31 Big Oak's personnel counted the inventory on hand and determined its cost to be $114,000. The accounting records, however, indicate inventory of $116,500 and a cost of goods sold of $721,000. The physical count of the inventory was observed by the company's auditors and is considered correct. Instructions a. Prepare journal entries to record these transactions and events in the accounting records of Big Oak Lumber. (The company uses a perpetual inventory system.) b. Prepare a partial income statement showing the company's gross profit for the year. (Net sales for the year amount to $1,422,000.) Chapter 6 Merchandising Activities c. Big Oak purchases merchandise inventory at the same wholesale prices as other lumber yards. Because of its remote location the company must pay between $8,000 and $18,000 per year in extra transportation charges to receive delivery of merchandise. (These additional charges are included in the amount shown as cost of goods sold.) Assume that an index of key business ratios in your library shows lumber yards of Big Oak's approximate size (in total assets) average net sales of $1 million per year and a gross profit rate of 22 percent: Is Big Oak able to pass its extra transportation costs on to its customers? Does the business appear to suffer or benefit financially from its remote location? Explain your reasoning and support your conclusions with specific accounting data comparing the operations of Big Oak Lumber with the industry averages. PROBLEM 6.2B Preparation and Interpretation of a Merchandising Harry's Haberdashery is a retail clothing store for men. The store operates out of a rented building in Albensville, Virginia Shown below is the store's adjusted year-end trial balance dated December 31,2011 . Company's income Statement Instructions a. Prepare an income statement for Harry's Haberdashery dated December 31, 2011 b. Compute the store's gross profit margin as a percentage of net sales. c. Do the store's customers seem to be satisfied with their purchases? Defend your answer. d. Explain how you can tell that the business records inventory purchases net of any purchase discounts. Problem Set B 281 e. The store reports sales tuxes payable of $5,000 in its adjusted trial balance. Explain why it does not report any sales tares expense. f. What is meant by the term operating cyele" and which accounts in the trial balance comprise Harry's Haberdashery's operating cycle? 108 PROBLEM 6.3B Trend Analysis Shown below is information from the financial reports of Jill's Deparment Stores for the past few years. Instructions a. Calculate the following statistics for Jill's Department Stores (round all computations to one decimal place): 1. The percentage change in net sales from 2009 to 2010 and 2010 to 2011. Hint: The percentage change is computed by dividing the dollar amount of the change between years by the amount of the base year. For example, the percentage change in net sales from 2009 to 2010 is computed by dividing the difference between 2010 and 2009 net sales by the amount of 2009 net sales, or ($8,810$8,140)$8,140=8.2% increase. 2. The percentage change in net sales per square foot of selling space from 2009 to 2010 and 2010 to 2011 . 3. The percentage change in comparable store sales from 2009 to 2010 and 2010 to 2011 . b. Evaluate the sales performance of Jill's Department Stores. Mary's TV uses a perpetual inventory system. The following are three recent merchandising transactions: Mar. 6 Purchased eight TVs from Whosa Industries on account. Invoice price, $350 per unit, for a total of $2,800. The terms of purchase were 2/10,n/30. Mar. 11 Sold two of these televisions for $600 cash. Mar. 16 Paid the account payable to Whosa Industries within the discount period. Instructions a. Prepare joumal entries to record these transactions assuming that Mary's records purchases of merchandise at: 1. Net cost 2. Gross invoice price b. Assume that Mary's did not pay Whosa Industries within the discount period but instead paid the full invoice price on April 6 . Prepare journal entries to record this payment assuming that the original liability had been recorded at: 1. Net cost 2. Gross invoice price c. Assume that you are evaluating the efficiency of Mary's bill-paying procedures. Which accounting method-net cost or gross invoice price-provides you with the most useful information? Explain. The following is a series of related transactions between Hip Pants and Sleck, a chain of retail clothing stores: Oct. 12 Hip Pants sold Sleek 300 pairs of pants on account, terms 1/10, n/30. The cost of these pants to Hip Pants was $20 per pair, and the sales price was $60 per pair. Oct. 15 Wings Express charged $50 for delivering this merchandise to Sleek. These charges were split evenly between the buyer and the seller and were paid immediately in cash. Chapter 6 Merchandising Activities Oct. 16 Sleek returned four pairs of pants to Hip Pants because they were the wrong size. Hip Pants allowed Sleek full credit for this return. Oct. 22 Sleek paid the remaining balance due to Hip Pants within the discount period. Both companies use a perpetual inventory system. Instructions a. Record this series of transactions in the general journal of Hip Pants. (The company records sales at gross sales price.) b. Record this series of transactions in the general journal of Sleek. (The company records purchases of merchandise at net cost and uses a Transportation-in account to record transportation charges on inbound shipments.) c. Sleek does not always have enough cash on hand to pay for purchases within the discount period. However, it has a line of credit with its bank, which enables Sleek to easily borrow money for short periods of time at an annual interest rate of 12 percent. (The bank charges interest only for the number of days until Sleek repays the loan.) As a matter of general policy, should Sleek take advantage of 1/10,n/30 cash discounts even if it must borrow the money to do so at an annual rate of 12 percent? Explain fully-and illustrate any supporting computations. Queen Enterprises is a fumiture wholesaler. Queen hired a new accounting clerk on January I of the current year. The new clerk does not understand accrual accounting and recorded the transactions below based on when cash receipts and disbursements changed hands rather than when the transaction occurred. Queen uses a perpetual inventory system, and its accounting policy calls for inventory purchases to be recorded net of any discounts offered. Jan. 7 Paid Hardwoods Forever Inc. $4,900 for furniture that it received on December 20. (This purchase was recorded as a debit to Inventory and a credit to Accounts Payable on December 20 of last year, but the accounting clerk ignores that fact.) Dec. 23 Received furniture from Koos Hoffwan Co. for $10,000; terms 2/10, n/30. Dec. 26 Sold furniture to Beige Chipmunk Inc. for $15,000; terms 1/10,n/30. The cost of the furniture to Queen was $12,250. Instructions a. As a result of the accounting clerk's errors, compute the amount by which the following accounts are overstated or understated: 1. Accounts Receivable 2. Inventory 3. Accounts Payable 4. Sales 5. Cost of Goods Sold b. Compute the amount by which net income is overstated or understated. c. Prepare a single journal entry to correct the errors that the accounting clerk has made. (Assume that Queen has yet to close its books for the current year.) d. Assume that Queen has already closed its books for the current year. Make a single journal entry to correct the errors that the accounting clerk has made. e. Assume that the ending inventory balance is correctly stated based on adjustments resulting from a physical inventory count. (Cost of Goods Sold was debited or credited based on the inventory adjustment.) Assume that Queen has already closed its books for the current year, and make a single journal entry to correct the errors that the accounting clerk has made. Computer Resources Inc. is a computer retailer. Computer Resources began operations in December of the current year and engaged in the following transactions during that month. Computer Resources uses a perpetual inventory system. Dec. 5 Purchased $100,000 of computer equipment, terms n/30. Dec. 12 Sold $100,000 of computer equipment, terms n/30. The cost of the equipment sold is $50,000. Dec. 26 Purchased $200,000 of computer equipment, terms n/30. 283 Instructions a. Compute the gross profit on Computer Resources's transactions during December. b. Compute the gross profit on Computer Resources's transactions during December if a cashbasis accounting system was used. c. Explain the difference between the results in a and b. d. Assume that the fair value of Computer Resources's inventory at December 31 is $375,000. A potential lender asks Computer Resources to prepare a fair-value-based balance sheet. Prepare the journal entry to reflect inventory at fair value. Comment on how a retailer might determine fair value for inventory items. [Hint: Increase the Inventory account by the difference between fair value and book value with the offset to an account titled Revaluation of Inventory to Market Value.] SUI sells presses. At December 31, 2011, SUI's inventory amounted to $500,000. During the first week of January 2012, the company made only one purchase and one sale. These transactions were as follows: Jan. 5 Purchased 60 machines from Double, Inc. The total cost of these machines was $40,000, terms 3/10,n/60. Jan. 10 Sold 30 different types of products on account to Air Corporation. The total sales price was $28,000, terms 5/10, n/90. The total cost of these 30 units to SUI was $10,000 (net of the purchase discount). SUI has a full-time accountant and a computer-based accounting system. It records sales at the gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receivable, inventory, and accounts payable. Instructions a. Briefly describe the operating cycle of a merchandising company. Identify the assets and liabilities directly affected by this cycle. b. Prepare journal entries to record these transactions, assuming SUI uses a perpetual inventory system. c. Explain the information in part b that should be posted to subsidiary ledger accounts. d. Compute the balance in the Inventory control account at the close of business on January 10 . e. Prepare journal entries to record the two transactions, assuming that SUI uses a periodic inventory system. f. Compute the cost of goods sold for the two weeks of January assuming use of the periodic system. (Use your answer to part d as the ending inventory.) g. Which type of inventory system do you think SUI most likely would use? Explain your reasoning. h. Compute the gross profit margin on the January 10 sales transaction. [Round your answer to one decimal place.]