Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Racers ATVs sells many makes and models of all-terrain vehicles. Racers uses a perpetual inventory system. On January 1, Racers had a beginning inventory of

Racers ATVs sells many makes and models of all-terrain vehicles. Racers uses a perpetual inventory system.

On January 1, Racers had a beginning inventory of AXVs costing $35,500. On January 14, Racers received a shipment of Model AXVs with a purchase price of $18,800 and transportation costs of $400. On May 19, Racers received a second shipment of AXVs with a purchase price of $18,900 and transportation costs of $400. On November 1, Racers received its before-Christmas shipment of AXVs with a purchase price of $24,800 and transportation costs of $550.

Make the necessary journal entries for January 14, May 19, and November 1 to show the purchase of the inventory (assume they paid cash). Assume that a physical inventory count on December 31 showed an ending inventory of AXVs of $22,800.

Determine cost of goods sold for the AXV model for the year. If sales of AXVs were $99,900, what profit did Racers make on this model?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of External Auditing

Authors: Brenda Porter, Jon Simon, David Hatherly

4th Edition

0470974451, 9780470974452

More Books

Students also viewed these Accounting questions

Question

=+a) 95% of the coworkers fall in the interval (0.409, 0.551).

Answered: 1 week ago

Question

Have you got a one page summary that you are happy with?

Answered: 1 week ago