Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tomas Inc. sells product A and uses a periodic inventory system. Simplified information about product A for the year 2014 is given in the

Tomas Inc. sells product A and uses a periodic inventory system. Simplified information about product A for the year 2014 is given in the following table. The company's fiscal year ends on Dec 31, 2014. Transactions (a) Inventory, Dec 31, 2013 For the year 2014: (b) Purchase, March 21 (c) Sale, June 20 ($29 each) (d) Purchase, Aug 19 (e) Sale, Nov 20 ($31 each) Required: immmmmm Units 7,000 units 19,000 units 10,000 units 8,000 units 16,000 units Unit Cost $8 9 11 1. Prepare the journal entries to record transaction (b) and (c), assuming that both (b) and (c) are cash transactions. 2. Compute the cost of ending inventory and cost of goods sold, assuming the company uses the Weighted Average cost flow assumption. 3. Would Tomas's gross profit increase or decrease if it uses the FIFO cost flow assumption instead of Weighted Average? You simply need to indicate the direction of the change in gross profit. No calculations are required.

Step by Step Solution

3.40 Rating (150 Votes )

There are 3 Steps involved in it

Step: 1

1 Journal entries for transaction b and c b Purchase of 19000 units on March 21 Dr Inventory 171000 ... 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

Intermediate Accounting

Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,

10th Canadian Edition, Volume 1

978-1118735329, 9781118726327, 1118735323, 1118726324, 978-0176509736

More Books

Students also viewed these Accounting questions

Question

10. Where does the optic nerve start and where does it endpg99

Answered: 1 week ago