Question

Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for busi expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping te 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 have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales watches during the second half of 2022. All watches are sold for $502 each. Jul. 17 Purchased 52 watches for $7,904 ($152 per watch) on account. Jul. 31 Sold 42 watches for $21,084 cash. Aug. 12 Purchased 42 watches for $6,804 ($162 per watch) cash. Aug. 22 Sold 32 watches for $16,064 on account. Sep. 19 Paid for watches purchased on July 17. Sep. 27 Receive cash of $10,200 for watches sold on account on August 22. Oct. 27 Purchased 82 watches for $14,104 ($172 per watch) cash. Nov. 20 Sold 92 watches for $46,184 cash. Dec. 4 Purchased 104 watches for $18,928 ($182 per watch) on account. Dec. 8 Sold 42 watches for $21,084 on account. 2. Late in December, the next generation of multiuse (MUI) watches is released. In addition to all of the MU I watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and video Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizarea watches is only $102 per watch. . Record any necessary adjustment on December 31, 2022 related to this information. (If no entry is required for transaction event, select "No Journal Entry Required in the first account field.) Answer is complete but not entirely correct. General Journal Credit Debit 4,720 Dec 31, 2022 Cost of Goods Sold Inventory 4,720 3

Answer 1

Requirement 1 (a)
	Sales Revenue
Date	Number of units	Sale price	Total Sales
31-Jul	42	$502	$   21,084.00
22-Aug	32	$502	$   16,064.00
20-Nov	92	$502	$   46,184.00
8-Dec	42	$502	$   21,084.00
Total	208		$ 104,416.00
	Cost of Goods Sold*
Date	Number of units	Unit cost	Total cost
17-Jul	52	$152	$7,904
12-Aug	42	162	$6,804
27-Oct	82	172	$14,104
4-Dec	32	182	$5,824
Total	208		$34,636
Only 32 of the 104 units purchased on December 4 are sold, The remaining 72 units are in ending inventory.
Ending Inventory
Date	Number of units	Unit cost	Total cost
4-Dec	72	$182	$13,104
Requirement 1 (b)
Great Adventures, Inc.
Partial Income Statement
For the year ended December 31, 2013
Sales revenue	$               104,416.00
Cost of goods sold	$               (34,636.00)
Gross profit	$               139,052.00
Requirement 2 (a)
Inventory Items	Cost Per unit	Market per unit	Lower-of-cost-or-market per unit	Quantity	Total lower-of-cost-or-market
MU Watches	$182	$102	$102	72	$7,344
Dec. 31, 2022
Account titles	Debit	Credit
Cost of Goods Sold	$5,760
Inventory		$5,760
(Adjust inventory down to market)
The amount of the inventory write-down equals the difference between the cost of the 72 MU watches ($13,104) and its market value ($7,344)	$5,760
Requirement 2 (b)
Great Adventures reports its inventory in the balance sheet at the lower-of-cost-or-market, which equals $7,000, as demonstrated in requirement 2(a).
Requirement 2 (c)
Great Adventures, Inc.
Partial Income Statement
For the year ended December 31, 2022
Sales revenue	$               104,416.00
Cost of goods sold (34,636 + 5760)	$               (40,396.00)
Gross profit	$                 64,020.00