Part 1: Prepare Coronado Co.s journal entries for each of the following transactions. Assume that a perpetual inventory method is used.

Recording Purchases of Merchandise

Coronado Co. purchases $24,000 of inventory on account, terms 2/10 net 30 from Likins Company.

Coronado Co. returns $2,600 of inventory to Likins Company from the initial purchase.

Coronado Co. pays the balance owed to Likins Company, taking the discount.

Recording Sales of Merchandise (new scenario)

Coronado Co. sells merchandise on account for $8,900 (terms 3/10 net 30) to Penny Co. The merchandise had cost Coronado Co. $4,350.

Penny Co. returns $800 of the merchandise to Coronado Co. Assume this returned merchandise had cost Coronado Co. $600.

Penny Co. pays Coronado Co. the balance owed within 10 days of the sale.

Part 2: During 2017, Smith & Co. sold 23,000 units of its product. The following units were on hand or purchased during the year:

	Units	Cost per unit	Total Cost
Beginning inventory (1/1/2017)	10,000	$13.50	$135,000
Purchase #1: (3/2/17)	14,000	$13.80	$193,200
Purchase #2: (7/15/17)	18,000	$14.10	$253,800
Purchase #3: (11/31/17)	12,000	$14.25	$171,000
Total Available for Sale	54,000		$753,000
Less Sold
Ending Inventory

Required: In the table above, fill in the number of units sold and the number of units in Ending Inventory. Calculate ending inventory and cost of goods sold for the next 3 questions.

If the company used the LIFO method, what is the value of ending inventory and cost of goods sold?

If the company used the FIFO method, what is the value of ending inventory and cost of goods sold?

If the company used the average cost method, what is the value of ending inventory and cost of goods sold?

Please round your calculated average cost per unit to 4 decimals (example - $18.7915)

Average Cost per unit =

Part 3:

Calculate the five critical subtotals in the multistep income statement based on the information provided in this table:

Sales	960,000
Sales returns	14,300
Sales discounts	9,000
Cost of Goods Sold	275,000
Total Operating Expenses	135,000
Interest Income	8,000
Interest Expense	16,000
Income Tax Expense	15,000

	Amount:
Net Sales
Gross Profit
Income From Operations
Income Before Taxes
Net Income

Fill in the blanks.

If costs are rising, then

LIFO COGS is (greater or less than) FIFO COGS

LIFO ending inventory is (greater or less than) FIFO ending inventory

Net Income for a company using LIFO will be greater or less than) a company that uses FIFO

If COGS is understated: (Fill in with overstated or understated):

Ending inventory is .

Net Income is .

Ending Retained Earnings are .

Stockholders Equity is .

Assets are

They are all seperate parts. .