Question

IL, 20) JR Tire Store reported the following October purchases and sales data for a line of tires it deals. The company uses a perpetual inventory system. 1) Prepare the company's inventory reeord using LIFO. 2) Identify cost of goods sold for the month and the profit of the month. 3) Journalize the transactions on October 18 and 26. Date Item Quantity (Units) Unit Price $68 Oct. I Beginning Inventory 10 7 Sales 18 Purchase 26 Sales 67 91 rV. (40) Jouralize the following transactions aecording to the descriptions and requirements: 1. In March, Smith Co. completed the following transactions: Received $10,000 contribution from Bill Alone in exchange for capital. Paid utilities expense of $400 July 1 12 Purchased equipment on account, $2,400. 21 The owner, Bill Alone, withdrew $500 cash from the business. 27 Performed services for a client on account, $3,400 Journalize each of the above transactions. 2. KOOL Co. purchases and installs a machine on Jan. 1, 2013 at a cost of $109,000. Straight- depreciation is taken each year assuming a seven-year life and a salvage cost of $4,000. The machin disposed on Jun 29, 2017. 1) Journalize the depreciation cost of the Year 2013 and 2017. 2) On Jur 2017 the machine is sold for $45,500 for cash. Journalize the transaction. 3. Journalize the transactions for TED Co, assuming the company uses direct write-off method t with the uncollectible receivables. Sold merchandise No. 123 to a client A for $3,600 on credit term 2/10, n/30, at the of $3,000. Received payment from the client A. Oct. 5 15 20 Received $1,800 which was written off on Jan. 5, from client B. 4. Prepare the closing entries with the following information from the adjusted trial balance for RIS Accumulated Depreciation- equipment Prepaid Insurance Unearned revenue Fees earned Wage expense Insurance expense Utilities expense $5,000 3,200 1,900 70,980 4,150 1,245 2,713 2,042 Depreciation expense

Answer 1

Req a:
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Oct							10	68	680
							2	65	130
7-Oct				2	65	130	4	68	272
				6	68	408
18-Oct	4	67	268				4	68	272
							4	67	268
26-Oct				4	67	268
				1	68	68	3	68	204
TOTAL	4		268	13		874	3	68	204
Req b:
Cost of goods sold: 874
Gross profit for the year:
Sales revenue (8*90+5*91)			1175
Less: Cost of good s sold			874
Gross profit for the year:			301
Req c:
Journal entries
Date	Accounts title and expplanations				Debit $	Credit $
18-Oct	Merhandise inventory Dr.				268
	Accounts payable					268
26-Oct	Accounts receivable dr. (5*91)				455
	Sales revenue					455
26-Oct	Cost of good s sold Dr.				336
	Merchandise inventory					336
QIV;
Journal entries:
Date	Accounts title and explanations				Debit$	Credit $
1-Jul	Cash account Ddr.				10000
	Bill capital					10000
5-Jul	Utilities expenses Dr.				400
	Cash account					400
12-Jul	Equipment Dr.				2400
	Accouunts payable					2400
21-Jul	Bill withdrawals Dr.				500
	Cash account					500
27-Jul	Accounts receivable Dr.				3400
	Service revenue					3400