Problem 1 Sandra's Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Sandra's Purse Boutique uses a periodic inventory system. Date Octobe Transactions Beginning inventory Sale Units 8 Unit Cost $ 820 Total Cost $ 4,920 1 4 4 Octobe r Octobe 10 Purchase 5 830 4,150 Octobo 13 Sale 3 Octobe 20 Purchase 4 840 3,360 Octobe 28 Sale 7 Octobe 30 Purchase B 850 6,800 19,23 o Required: 1. Calculate ending inventory and cost of goods sold at October 31, using the specific identification method. The October 4 sale consists of purses from beginning inventory, the October 13 sale consists of one purse from beginning inventory and two purses from the October 10 purchase, and the October 28 sale consists of three purses from the October 10 purchase and four purses from the October 20 purchase. 2. Using FIFO, calculate ending inventory and cost of goods sold at October 31. Problem 2 At the beginning of July, CD City has a balance in inventory of $3,250. The following transactions occu during the month of July. July 3 Purchase CDs on account from Wholesale Music for $2,150, terms 2/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $110. July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $300. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $5,500, that had a cost of $2,850. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,950, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $4,050, that had a cost of $2,350. July 28 Return CDs to Music Supply and receive credit of $270. July 30 Pay Music Supply in full. Required: 1. Assuming that CD City uses a perpetual inventory system, record the transactions 2. Prepare the top section of the multiple-step income statement through gross profit for the month of July. Problem 3 A local Chevrolet dealership carries the following types of vehicles: Inventory Items Vans Quantity 3 $ Unit Cost 21.00 0 16,80 0 $ Trucks 6 2-door sedans 2 11,800 Unit NRV 19.00 0 15,80 0 13,80 0 18,80 0 34,00 0 22.00 0 15,80 4-door sedans 7 Sports cars 3 31.00 0 27,60 0 SUVS Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. Required: 1. Compute the total cost of the entire inventory. 2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column. 3. Prepare necessary entry to write down inventory from cost to net realizable value
