Problem 6-3A
Required
1. Prepared a perpetual inventory record at moving-weighted-average cost. Round the
average unit cost to the nearest cent and all other amounts to the nearest dollar.
2. Prepare ?a multi-step income statement for Vista Distributors for the month of January.
& Accounting Book Horngren's.pdf - Adobe Acrobat Reader DC File Edit View Window Help Home Tools Accounting Book H... x A Sign In 376 / 756 Share Required 1. What would you think of a company's ethics if it changed accounting methods every year? 2. What accounting principle would changing methods every year violate? 3. Who can be harmed when a company changes its accounting methods too often? How? PROBLEMS (GROUP A) MyAccountingLab Problem 6-1A O Markham Leathers, a distributor of leather products, uses the FIFO method for valuing Using the perpetual inventory inventories. It began August with 50 units of an inventory item that cost $80 each. During system-FIFO August, the store completed these inventory transactions: 1 Units Unit Cost Unit Sale Price 2. Cost of goods sold, $9,280 Aug. 3 Sale 40 $140 8 Purchase 80 $88 21 Sale 70 150 to 30 Purchase 10 96 Required 1. Prepare a perpetual inventory record for this item. 2. Determine the store's cost of goods sold for August. 3. Compute gross margin for August. Problem 6-2A Vista Distributors purchases inventory in crates of merchandise. Assume the company began July with an inventory of 30 units that cost $300 each. During the month, the Accounting for inventory using the perpetual system-FIFO company purchased and sold merchandise on account as shown: Jul. 10 Purchased 30 units at $320. 1. Cost of goods sold, $37,850 15 22 Sold 40 units at $700. 29 Purchased 70 units at $350. Sold 75 units at $800. Assume Vista Distributors uses the FIFO cost method for valuing inventories. The company uses a perpetual inventory system. Cash payments on account totalled $15,000. Company operating expenses for the month were $30,000. The company paid one-half in cash, with the rest accrued as Accounts Payable. Required 1. Prepare a perpetual inventory record, at FIFO cost, for this merchandise. 2. Make journal entries to record the company's transactions. Problem 6-3A Refer to the Vista Distributors situation in Problem 6-2A. Keep all the data unchanged, Accounting for inventory in a except assume that Vista uses the moving-weighted-average-cost method. perpetual system-moving- weighted-average cost Required 1. Prepared a perpetual inventory record at moving-weighted-average cost. Round the 1. Cost of goods sold, $37,983 average unit cost to the nearest cent and all other amounts to the nearest dollar. 2. Prepare a multi-step income statement for Vista Distributors for the month of January. Chapter 6 Accounting for Merchandise Inventory 359 Problem 6-4A Summarize perpetual inventory data and explain Refer to Problems 6-2A and 6-3A to prepare a table comparing ending inventory, cost of goods sold, and gross margin under both the FIFO and the moving-weighted-average-cost (2 methods. You will need to calculate gross margin for Problem 6-2A. Explain why the gross FIFO gross margin, $50, 150 margin is lower under the moving-weighted-average-cost method. Problem 6-5A Computing ending inventory by Sandy's Office Supplies distributes office furniture. The company's fiscal year ends on applying two inventory costing March 31, 2017. On January 31, 2017, one department in the company had in inventory 20 methods in a perpetual inventory system office suites that cost $1,800 each. During the quarter, the department purchased merchan- 1 2 dise on account as follows: Grace marnin 1/al $180 10? 8.50 x 11.00 in O 9 W 9ENG 02:12 PM 19-05-2019
