Question

Required information [The following information applies to the questio N ayed below.) Now that operations for outdoor clinics and TEAM ents are running smoothly. Suzie thinks of another area for business expansion. She notices that a few clinic participan wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from Kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $499 each. Jul. 17 Purchased 49 watches for $7,301 ($149 per wateh) on account. Jul 31 Sold 39 vatches for $19,461 cash. Mug. 12 Purchased 39 watches for $6,201 ($159 per watch) cash. Aug. 22 Sold 29 watches for $14,471 on account. Sep. 19 Paid for watches purchased on July 17. Sep. 27 Receive cash of $15,600 for watches sold on account on August 22. Oct. 27 Purchased 79 Watches for $13,351 ($169 per watch) cash. Nov. 20 Sold 89 watches for $44.411 cash. Dec. 4 Purchased 118 watches for $21,122 ($179 per watch) on account. Dec. Sold 39 watches for $19.461 on account. Required: 1-a. Calculate sales revenue, cost of goods sold, and ending inventory as of December 31, 2022, assuming Suzie uses FIFO to account for inventory Sales Revenue Cost of Goods Sold Ending Inventory 1-b. Prepare the gross profit section of a partial income statement for transactions related to MU watches. GREAT ADVENTURES, INC. Partial Income Statement For the Year Ended December 31, 2022 Gross profit

Answer 1

Answer - Part - (1-a) -

Particulars	Explanation	Amount ($)
Sales Revenue	Refer working note - (1)	97804
Cost of Goods Sold	Refer working note - (2)	32044
Ending Inventory	(118 units - 29 units) * $179	15931

# Working note - (1) - Calculation of Sales Revenue -

Date	Number of units	Sale price ($)	Calculation	Total sales ($)
Jul 31	39	499	39 units * $499	19461
Aug 22	29	499	29 units * $499	14471
Nov 20	89	499	89 units * $499	44411
Dec 8	39	499	39 units * $499	19461
Total	196	-	-	97804

# Working note - (2) - Calculation of Cost of Goods Sold -

Date	Number of units	Unit cost ($)	Calculation	Total cost ($)
Jul 17	49	149	49 units * $149	7301
Aug 12	39	159	39 units * $159	6201
Oct 27	79	169	79 units * $169	13351
Dec 4	29 = (196-167)	179	29 units * $179	5191
Total	196	-	-	32044

.

Answer - Part - (1-b) -

GREAT ADVENTURES, INC. Partial Income Statement For the Year Ended December 31, 2022
Sales Revenue	Refer part - (1-a)	$97804
Cost of Goods Sold	Refer part - (1-a)	$32044
Gross Profit	$97804 - $32044	$65760