Question

I need help on Instructions A through F

ehensive Accounting Cycle Review ACR6 On December 1, 2022, Waylon Company had the account balances shown below. Cash Accounts Receivable Inventory Equipment Debit $ 4,800 3.900 1,800 21.000 $31,500 Accumulated Depreciation Equipment Accounts Payable Common Stock Retained Earnings Credit $ 1,500 3,000 10,000 17.000 $31.500 "(3,000 X 50.60) The following transactions occurred during December Dec. 3 5 Purchased 4,000 units of inventory on account at a cost of $0.72 per unit. Sold 4,400 units of inventory on account for $0.90 per unit. (Waylon sold 3,000 of the $0.60 units and 1.400 of the $0.72.) Granted the December 5 customer $180 credit for 200 units of inventory returned costing $144. These units were returned to inventory. Purchased 2.200 units of inventory for cash at $0.80 each. Sold 2,000 units of inventory on account for $0.95 per unit. (Waylon sold 2.000 of the S0.72 units.) Adjustment data: 1. Accrued salaries and wages payable $400. 2. Depreciation on equipment $200 per month. 3. Income tax expense was $215, to be paid next year. Instructions a Journalize the December transactions and adjusting entries, assuming Waylon uses the perpetual inventory method. b. Enter the December 1 balances in the ledger T-accounts and post the December transactions. In addition to the accounts mentioned above, use the following additional accounts: Income Taxes Payable, Salaries and Wages Payable, Sales Revenue, Sales Returns and Allowances, Cost of Goods Sold, Depreciation Expense, Salaries and Wages Expense, and Income Tax Expense. c. Prepare an adjusted trial balance as of December 31, 2022 d. Prepare an income statement for December 2022 and a classified balance sheet at December 31, 2022 e. Compute ending inventory and cost of goods sold under FIFO, assuming Waylon Company uses the periodic inventory system. f. Compute ending inventory and cost of goods sold under LIFO, assuming Waylon Company uses the periodic inventory system.

Answer 1

(a) Dec. 3 2,880 Inventory (4,000 X $0.72). Accounts Payable ...... 2,880 5 Accounts Receivable (4,400 X $0.90)........ 3,960 3,960 Sales Revenue. 2,808 Cost of Goods Sold ..... Inventory (3,000 X $0.60) + (1,400 X $0.72)... 2,808 Sales Returns and Allowances ............ 180 180 Accounts Receivable .......... Inventory... 144 144 Cost of Goods Sold... .................. 17 Inventory (2,200 X $0.80)... 1,760 1,760 Cash. 22 Accounts Receivable (2,000 X $0.95).. 1,900 1,900 Sales Revenue. Cost of Goods Sold (2,000 X $0.72)... 1,440 1,440 Inventory.......... 31 Salaries and Wages Expense............ 400 400 Salaries and Wages Payable.. 200 Depreciation Expense......... Accumulated Depreciation- Equipment..... 200 215 Income Tax Expense........ Income Taxes Payable........... 215

General Ledger Cash Bal. 1,760 4,800 3,040 Bal. Common Stock Bal. 10,000 Bal. 180 Retained Earnings Bal. 17,000 Bal. Sales Revenue Bal. Accounts Receivable 3,900 3,960 1,900 9,580 Inventory 1,800 2,880 144 1,760 2,336 Equipment 21,000 2,808 1,440 3,960 1,900 5,860 Bal. Bal. 144 Cost of Goods Sold 2,808 1,440 4,104 Bal. Bal. Depreciation Expense 200 Accumulated Depreciation- Equipment Bal. 200 1,500 200 1,700 Bal. Salaries and Wages Expense 400 400 Bat. Accounts Payable Bal. 3,000 2,880 5,880 Sales Returns & Allowances 180 180 Bat. Bal. Salaries and Wages Payable Income Tax Expense 215 215 400 Bal. Bal. 400 Income Taxes Payable 215 215

(c) WAYLON COMPANY Adjusted Trial Balance December 31, 2017 DR. CR. $ 3,040 9,580 2,336 21,000 Cash. Accounts Receivable Inventory ...... Equipment...... Accumulated Depreciation-Equipment. Accounts Payable Salaries and Wages Payable.... Income Taxes Payable..... Common Stock .... Retained Earnings ........... Sales Revenue Sales Returns & Allowances.... Cost of Goods Sold. Salaries and Wages Expense...... Depreciation Expense.... Income Tax Expense ...... $ 1,700 5,880 400 215 10,000 17,000 5,860 180 4,104 400 200 215 $41,055 $41,055 WAYLON COMPANY Income Statement For the Month Ending December 31, 2017 $5,860 180 $5,680 4,104 1,576 Sales revenue.... Less: Sales returns and allowances........ Net sales....... Cost of goods sold ...... Gross profit.... Operating expenses Salaries and wages expense..... Depreciation expense .. Income before income tax. Income tax expense. Net income .... 400 200 600 976 215 $ 761

WAYLON COMPANY Balance Sheet December 31, 2017 Assets Current assets Cash. Accounts receivable................ Inventory ............ Total current assets.... $ 3,040 9,580 2,336 $14,956 Property, plant, and equipment 21,000 Equipment............. Less: Accumulated depreciation- Equipment.. Total assets............ 1.700 19.300 $34,256 Liabilities and Stockholders' Equity Current liabilities Accounts payable. Salaries and wages payable ...... Income taxes payable...... Total current liabilities.... $ 5,880 400 215 $ 6,495 Stockholders' equity 10,000 17.761 Common stock.. Retained earnings ($17,000+ $761)...... Total stockholders' equity....... Total liabilities and stockholders' equity .... 27.761 $34,256 (Ending retained earnings = Beginning retained earnings + Changes to retained earnings)

(e) FIFO Method Cost of Goods Beg. Inventory Dec. 3 purchase Dec. 17 purchase Units 3,000 4,000 2.200 9,200 Unit Cost $0.60 $0.72 $0.80 Available for Sales $1,800 2,880 1.760 $6,440 Cost of Goods Sold Ending Inventory Dec. 17 2,200 x $0.80 =$1,760 Dec. 3 800* X $0.72 = 576 3,000 $2,336 Cost of goods available for sale Less: Ending inventory Cost of goods sold $6,440 2.336 $4,104 *(9,200 -4,400 + 200 - 2,000) - 2,200 (f) LIFO Method Ending Inventory Cost of Goods Sold Dec. 1 3,000 X $0.60 = $1,800 Cost of goods available for sale Less: Ending inventory Cost of goods sold $6,440 1.800 $4,640