Updated Scenario: Many customers have been asking for more hypoallergenic products, so in September you start carrying a line of hypoallergenic shampoos on
a trial basis. The following information relates to the purchase and sales of the shampoo:
You use the perpetual inventory method. You are uncertain as to which valuation method to useFIFO, LIFO, or weighted average, so you calculate inventory using all three and then decide which one you would like to choose.
Data: The following events occur in September, 2018:
September 1: Paid dividends to self in amount of $10,000. September 5: Pay employee for period ending 8/31. September 7: Purchase merchandise for resale. See Inventory Valuation tab for details. September 8: Receive payments from customers toward accounts receivable in amount of $4,000. September 10: Pay August telephone bill. September 11: Purchase baking supplies in amount of $7,000 from vendor on account. September 13: Paid on supplies vendor account in amount of $5,000. September 15: Accrue employee wages for period of September 1 through September 15. September 15: Pay rent on bakery space: $1,500. September 15: Record merchandise sales transaction. See Inventory Valuation tab for details. September 15: Record impact of sales transaction on COGS and the inventory asset. See Inventory Valuation tab for details. September 20: Pay employee for period ending 9/15. September 20: Purchase merchandise inventory for resale to customers. See Inventory Valuation tab for details. September 24: Record sales of merchandise to customers. See Inventory Valuation tab for details.
September 24: Record impact of sales transaction on COGS and the inventory asset. See Inventory Valuation tab for details. September 30: Purchase merchandise inventory for resale to customers. See Inventory Valuation tab for details. September 30: Accrue employee wages for period of September 16th through September 30th September 30: Total September bakery sales are $20,000. $6,000 of these sales are on accounts receivable.
Asset Accounts Liability Accounts Equity Accounts Acct # Acct # 201 Common Stock 202 Dividends 203 204 301 302 Cash Baking Supplies Prepaid Rent Prepaid Insurance Baking Equipment Office Supplies Accounts Receivable Accumulated Depreciation Merchandise Inventory Acct # 101 Notes Payable 102 Accounts Payable 103 Wages Payable 104 Interest Payable 105 106 107 108 109 Revenue Accounts Acct # Bakery Sales Merchandise Sales 401 402 This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you. Expense Accounts Acct # Baking Supplies Expense Rent Expense Insurance Expense Misc. Expense Business License Expense Advertising Expense Wages Expense Telephone Expense Interest Expense Depreciation Expense Office Supplies Expense Cost of Goods Sold 501 502 503 504 505 506 507 508 509 510 511 512 Wage calculation data: Rate 12 12 Month 31 Jul. 15 Aug. 31 Aug. 15 Sep. | 30 Sep. Hours 10 | 40 35 38 40 Pay 120 480 420 456 480 12 | 12 12 Peyton Approved General Journal Entries Sep-18 Put entries in shaded cells Accounts Total FIFO USE THIS ONE FOR THE SEPTEMBER ENTRIES Date Purchases 7-Sep 10 $ 6.00 $ 60.00 Sales Ending Inventory 6.00 $ 60.00 Dr 60.00 10 $ 7-Sep Merchandise Inventory (10 x $6) Cash Purchased inventory 60.00 Purchases 9/7: 10 bottles purchased at $6 9/20:20 bottles purchased at $6.10 9/30:25 bottles purchased at $6.05 Sales - selling price, $8.50 a bottle 9/15: 8 bottles 9/24:18 bottles 15-Sep 8 $ 6.00 $ 48.00 2 $ 6.00 $ 12.00 20-Sep 20 $ 6.10 $ 122.00 68.00 2 $ 20 $ 22 6.00 $ 6.10 $ $ 12.00 122.00 134.00 15-Sep Cash (8 x $8.50) Merchandise Sales Record sale of inventory 68.00 24-Sep 48.00 2 $ 16 $ 6.00 6.10 $ $ $ 12.00 97.60 109.60 4 $ 6.10 $ 24.40 15-Sep Cost of Goods Sold (8 X $6) Merchandise Inventory Recorded the cost of goods sold 48.00 30-Sep 25 $ 6.05 $ 151.25 122.00 4 $ 25 $ 6.10 6.05 20-Sep Merchandise Inventory (20 x $6.10 ) Cash 122.00 $ $ $ $ 24.40 151.25 175.65 175.65 29 55 $ 333.25 26 $ 157.60 29 153.00 24-Sep Cash (18 x 8.50) Merchandise Sales Record sale of inventory 153.00 109.60 24-Sep Cost of Goods Sold (2 x $6)+(16 x $6.10) Merchandise Inventory Recorded the cost of goods sold 109.60 151.25 30-Sep Merchandise Inventory (25 x $6.05) Cash 151.25 Asset Accounts Liability Accounts Equity Accounts Acct # Acct # 201 Common Stock 202 Dividends 203 204 301 302 Cash Baking Supplies Prepaid Rent Prepaid Insurance Baking Equipment Office Supplies Accounts Receivable Accumulated Depreciation Merchandise Inventory Acct # 101 Notes Payable 102 Accounts Payable 103 Wages Payable 104 Interest Payable 105 106 107 108 109 Revenue Accounts Acct # Bakery Sales Merchandise Sales 401 402 This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you. Expense Accounts Acct # Baking Supplies Expense Rent Expense Insurance Expense Misc. Expense Business License Expense Advertising Expense Wages Expense Telephone Expense Interest Expense Depreciation Expense Office Supplies Expense Cost of Goods Sold 501 502 503 504 505 506 507 508 509 510 511 512 Wage calculation data: Rate 12 12 Month 31 Jul. 15 Aug. 31 Aug. 15 Sep. | 30 Sep. Hours 10 | 40 35 38 40 Pay 120 480 420 456 480 12 | 12 12 Peyton Approved General Journal Entries Sep-18 Put entries in shaded cells Accounts Total FIFO USE THIS ONE FOR THE SEPTEMBER ENTRIES Date Purchases 7-Sep 10 $ 6.00 $ 60.00 Sales Ending Inventory 6.00 $ 60.00 Dr 60.00 10 $ 7-Sep Merchandise Inventory (10 x $6) Cash Purchased inventory 60.00 Purchases 9/7: 10 bottles purchased at $6 9/20:20 bottles purchased at $6.10 9/30:25 bottles purchased at $6.05 Sales - selling price, $8.50 a bottle 9/15: 8 bottles 9/24:18 bottles 15-Sep 8 $ 6.00 $ 48.00 2 $ 6.00 $ 12.00 20-Sep 20 $ 6.10 $ 122.00 68.00 2 $ 20 $ 22 6.00 $ 6.10 $ $ 12.00 122.00 134.00 15-Sep Cash (8 x $8.50) Merchandise Sales Record sale of inventory 68.00 24-Sep 48.00 2 $ 16 $ 6.00 6.10 $ $ $ 12.00 97.60 109.60 4 $ 6.10 $ 24.40 15-Sep Cost of Goods Sold (8 X $6) Merchandise Inventory Recorded the cost of goods sold 48.00 30-Sep 25 $ 6.05 $ 151.25 122.00 4 $ 25 $ 6.10 6.05 20-Sep Merchandise Inventory (20 x $6.10 ) Cash 122.00 $ $ $ $ 24.40 151.25 175.65 175.65 29 55 $ 333.25 26 $ 157.60 29 153.00 24-Sep Cash (18 x 8.50) Merchandise Sales Record sale of inventory 153.00 109.60 24-Sep Cost of Goods Sold (2 x $6)+(16 x $6.10) Merchandise Inventory Recorded the cost of goods sold 109.60 151.25 30-Sep Merchandise Inventory (25 x $6.05) Cash 151.25
