Question

A-J

give two to three classes per week. Natalie has decided to use a periodic inventory system and low choose a cost flow assumption for her mixer inventory business degree. Her goals for the next II gchopan/ rstock Go to WileyPLUS for complete case details and instructions Accounting Cycle Review ACR6 On December 1, 2022, Waylon Company had the account balances shown below. Credit Debit Accumulated Depreciation-Equipment Accounts Payable Common Stock $1,500 Cash $ 4,800 3,000 Accounts Receivable 3,900 Inventory Equipment 10,000 1,800 21,000 17,000 Retained Earnings $31,500 $31,500 "(3,000 x $0.60) The following transactions occurred during December. 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. Dec. 3 5 7 oolt 17 Sold 2,000 units of inventory on account for $0.95 per unit. (Waylon sold 2,000 of the $0.72 units.) 22 Adjustment data: 1. Accrued salaries and wages payable $400. 2. Depreciation on equipment $200 per month. Income tax expense was $215, to be paid next year 3. 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: 1ncome 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, e. Compute ending inventory and cost of goods sold under FIPO, assuming Waylon Company uses the f. Compute ending inventory and cost of goods sold under LIFO, assuming Waylon Company uses the 2022 periodic inventory system. periodic inventory system.

Answer 1

.3

Answer to a In the books of Waylon company General Journal Debit Credit Date Description 20201 Dec-03 Inventory (4000*.72) Accounts Payable (being inventory purcahsed) $ 2,880 $ 2,880 I $ 3,960 Dec-05 Accounts Receivable (4400*0.90) Sales Revenue (being lease rentals paid) $ 3,960 $ 2,808 Dec-05 Cost of goods sold Inventory (being cost of goods sold recorded) $ 2,808 $ 180 Dec-07 Sales return & allowance Accounts receivable (being sales return recorded) $ 180 144 Dec-07 Inventory Cost of goods sold (being inventory received) $ 144 $ 1,760 Dec-17 Inventory (2200*0.80) Accounts Payable (being inventory purcahsed) $ 1,760 $ 1,900 Dec-22 Accounts Receivable (2000*0.95) Sales Revenue (being sales recorded) $ 1,900 $ 1,440 Dec-22 Cost of goods sold Inventory (being cost of goods sold recorded) | $ 1,440 S 400 Dec-30 Salaries & wages Salaries & wages payable (being expenses accrued) $ 400 Dec-30 depreciation Accumulated depreciation Equipment (being depreciation recorded) 200 S 200 215 Dec-30 Income tax expense Income tax payable (being expenses recorded) 215

Amount in $) Answer to b Accounts Receivable Date Description Dec-01 Opening balance Dec-05 Sales Revenue Dec-22 Sales Revenue Amount (in $) Date Description 3900 3960 Dec-07 Sales Retum & allowance 1900 180 Accounts Payable Date Description Amount (in %) Date Description Dec-01 Opening balance Dec-03 Inventory Dec-17 Inventory Amount (in %) 3000 2880 1760 Inventory Date Description Dec-01 Opening balance Dec-03 Accounts Payable Dec-07 Cost of goods sold Dec-17 Accounts Payable Amount (in %) Date Description 1800 Dec-05 Cost of goods sold 2880 Dec-22 Cost of goods sold 144 1760 Amount (in %) 2808 1440 Sales Revenue Date Description Amount (in $) Date Description Dec-05 Accounts receivable Dec-22 Accounts receivable Amount (in $) 3960 1900 Cost of goods sold Date Description Dec-05 Inventory Dec-22 Inventory Amount (in %) Date Description 2808 Dec-07 Inventory 1440 Amount (in %) 144 Sales return & allowance Date Description Amount (in $) Date Dec-07 Accounts Receivable 180 Description Amount (in $) Salaries & wages Date Description Amount (in $) Date Dec-30 Salaries & wages pay 400 Description Amount (in $) Salaries & wages payable Date Description Amount (in $) Date Description Dec-30 Salaries & wages Amount (in $). 400 Amount (in $) Date Description Amount (in $) Depreciation Date Description Accumulated Dec-30 depreciation- 200 Accumulated depreciation- Equipment Date Description Amount (in %) Date Description Dec-30 Depreciation Amount (in %) 200 Income Tax Date Description Dec Income tax payable Description Amount (in $) Amount (in %) Date 215 Income tax payable Date Description Amount (in $) Date Description Dec-30 Income Tax Amount (in $) 215

Answer to c Adjusted Trial Balance Title Cash Accounts Receivable Inventory Equipment Salaries & wages Income Tax Depreciation Sales return & allowances Cost of goods sold Debit Title Credit $ 4,800 Accumulated Depreciation $ 1,700 $ 9,580 Accounts Payable $ 7,640 $ 2,336 Common Stock $ 10,000 $ 21,000 Retained Earnings $ 17,000 $ 400 Income tax payable $ 215 $ 215 Salaries & wages payable $ 400 $ 200 Sales Revenue $ 5,860 $ 180 4,104 Total $ 42,815 $ 42,815

Answerto d Income statement for the period ended Dec 31, 2022 Amount Amount $ 5,860 180 Particulars Revenue Sales Revenue Less: Sales retum & allowance Net Sales Less: Cost of goods sold Gross income Less: expenses Salearies & wages Depreciation Operating income Less: Income Tax Net Income $ $ $ 5,680 4,104 1,576 $ S $ IS $ 400 200 976 215 761 Balance Sheet for the period Dec 31,2022 Amount Amount Assets Current Assets Cash Accounts receivable Inventory Total Current Assets IS $ $ 4,800 9,580 2,336 $ 16,716 Fixed Assets Equipment Accumulted Depreciation $ $ 21,000 -1,700 Total Assets | $ 36,016 Liabilities Current liabilities Accounts Payable Salaries & wages Payable Income tax payable Total Current Liabilities 7,640 400 215 $ 8,255 Long term liabilities $ . $ 10,000 Owners Equity Common Stock Retained Earnings Opening Balance Add: Net profit $ $ 17,000 761 $ 17,761 Total Liabilities $ 36,016