Question

Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants 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 $498 each. Jul. 17 Purchased 48 watches for $7,104 ($148 per watch) on account. Jul. 31 Sold 38 watches for $18,924 cash Aug. 12 Purchased 38 watches for $6,004 (5158 per watch) cash. Aug. 22 Sold 28 watches for $13,944 on account. Sep. 19 Paid for watches purchased on July 17 Sep. 27 Receive cash of $16, 200 for watches sold on account on August 22. Oct. 27 Purchased 78 watches for $13,104 (5168 per watch) cash. Nov. 20 Sold 88 watches for $43,824 cash. Dec. 4 Purchased 116 watches for $20,648 ($178 per watch) on account. Dec. 8 Sold 38 watches for $18,924 on account.

Answer 1

- 4 A G M T I W Y X Total Qty Qty Amount Qty Rate 2 Amount Amount Qty 48 H I Purchases Rate Amount 1487,104 - 158 6,004 J K L Sales Qty Rate Amount - 38 498 18,924 - 28 498 13,944 5,624 38 5,624 B C D E F Opening Balance Description Qty Rate Amount 17-Jul MU purchased - 31-Jul MU Sold 48 148 7,104 12-Aug MU purchased 10 148 1,480 22-Aug MU Sold 48 156 7,484 27-Oct MU purchased 20 158 3,160 20-Nov MU Sold 98 166 16,264 04-Dec MU purchased 10 168 1,680 08-Dec MU Sold 126 177 22,328 31-Dec MU Balance 88 178 15,664 Total Reduction in Carrying Value = 38 10 48 20 N O P Q I R S Balance Cost of Goods Sold Rate Amount Qty Rate 1 148 7,104 148 1,480 38 148 156 7,484 158 3,160 Assumed FIFO basis 10 148 166 16,264 168 1,680 158 177 22,328 178 15,664 10 168 98 8,624 78 1,480 18 158 2,844 28 4,324 78 168 13,104 498 43,824 10 3,160 68 168 11,424 88 14,584 178 20,648 116 - 88 - 38 10 498 18,924 126 88 88 178 1,680 11,944 28 114 4,984 19,252 38 192 6,664 31,196 11 7,040 (15664-8624) Credit 14 1.) Adjusting Journal Entry Cost of Goods Sold Inventories Debit 7,040 7,040 17 18 2.) MU Inventory would be reported at Nte Reaisable Value i.e. $8624 20 3.) Sales Less: Cost of Goods Sold 21 95,616 31,196 7,040 57,380 - Gross Profit

A B Opening Balance Rate Amount 0 0 =N3 =D4*14 =N4 =D5*E5 =N5 =D6*E6 =N6 =D7*E7 =N7 =D8*E8 =N8 =D9*E9 =N9 =D10*E10 =N10 =D11*E11 Description Qty 17/07/ MU purchased 31/07/ MU Sold =M3 12/08/ MU purchased =M4 22/08/ MU Sold =M5 27/10/ MU purchased =M6 20/11/MU Sold =M7 04/12/ MU purchased =M8 08/12/ MU Sold =M9 31/12/ MU Balance =M10 Total Reduction in Carrying Val J Purchases Rate Amount Qty 148 =G3*H3 0 0 38 158 =G5*H5 0 28 78 168 =G7*H7 0 0 88 116 178 =G9*H9 0 38 0 =F11-011 (15664-8624) K L M Sales Rate Amount Qty Rate 0 0 =D3+G3-13-H3 =L4/34 18924 =D4+G4-14 148 0 0 =D5+G5-15 =05/M5 498 =J6*K6 =D6+G6-16 158 0 0 =D7+G7-17 =07/M7 498 =18*K8 D8+G8-38 168 0 0 =D9+G9-19 =09/M9 498 = 10*K10 =D10+G10-J: 178 0 0 =D11+G11-1:98 Balance Amount =M3*N3 =M4*N4 =F5+15 =M6*N6 =F7 +17 =M8*N8 -F9+19 =M10*N10 =M11*N11 Assumed FIFO basis 10 11 12

T U V W Y Cost of Goods Sold Qty Rate 1 Amount Qty Total Qty Rate 2 Amount =T2 38 148 =R4*54 =D5 =E5 =F5 18 =H5 =R4+04 =T4+W4 =R5+U5 =T5+W5 =U6*16 =R6+U6 =T6+W6 =R7+07 =T7+W7 =U8*V8 =R8+08 =T8+W8 =R9+U9 =T9+W9 =U10*710 =R10+U10 =T10+W10 =SUM(W4:W10) =SUM(X4:X10) =T11+W11 =D7 =E7 =F7 168 168 178 =F9 =SUM(T4:T10) =SUM(U4:010) =SUM(R4:R10)

3.) Sales Less: Cost of Goods Sold 95,616 18924+13944+43824+18924 - 31,196 - 7,040 Gross Profit