Expert answer:Inventory Acct
Expert answer:14 questions
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GJ – 1
Question 1 (9 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise.
Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is
used.
> Alpha Company purchased on account $2,600 of merchandise from Bravo Company on May 2,
2016.
> Alpha Company returned, to Bravo Company, $300 of this merchandise on May 3, 2016.
> Freight charges related to this transaction of $150 were paid by Bravo Company.
Use this information to prepare Alpha Company’s compound General Journal entry (without
explanation) for the payment for merchandise on May 12. If no entry is required then write “No
Entry Required.”
GJ – 2
Question 2 (10 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise.
Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is
used.
> Alpha Company purchased on account $2,550 of merchandise from Bravo Company on May 2,
2016.
> Alpha Company returned, to Bravo Company, $200 of this merchandise on May 3, 2016.
> Freight charges related to this transaction of $150 were paid by Bravo Company.
Use this information to prepare Alpha Company’s General Journal entries (without explanation)
for May 2 & May 3 entries. If no entry is required then write “No Entry Required.”
GJ – 3
Question 3 (8 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise.
Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is
used.
> Alpha Company sold on account $3,000 of merchandise to Bravo Company on May 2, 2016.
Selling price was $5,000
> Bravo Company returned, to Alpha Company, $300 of this merchandise on May 3, 2016.
Merchandise was sold for $500
> Freight charges related to this transaction of $150 were paid by Alpha Company.
Use this information to prepare Alpha Company’s compound General Journal entry (without
explanation) for the payment for merchandise on May 12. If no entry is required then write “No
Entry Required.”
GJ – 4
Question 4 (8 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise.
Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is
used.
> Alpha Company sold on account $4,000 of merchandise to Bravo Company on May 2, 2016.
Selling price was $7,000
> Bravo Company returned, to Alpha Company, $400 of this merchandise on May 3, 2016.
Merchandise was sold for $700
> Freight charges related to this transaction of $150 were paid by Alpha Company.
Use this information to prepare Alpha Company’s General Journal entry (without explanation) for
the payment for merchandise on May 15. If no entry is required then write “No Entry Required.”
GJ – 5
Question 5 (10 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise.
Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the net method is
used.
> Alpha Company purchased on account $2,500 of merchandise from Bravo Company on May 2,
2016.
> Alpha Company returned, to Bravo Company, $250 of this merchandise on May 3, 2016.
> Freight charges related to this transaction of $150 were paid by Bravo Company.
Use this information to prepare Alpha Company’s General Journal entries (without explanation)
for May 2 & May 3 entries. If no entry is required then write “No Entry Required.”
GJ – 6
Question 6 (9 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise.
Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the net method is
used.
> Alpha Company purchased on account $2,600 of merchandise from Bravo Company on May 2,
2016.
> Alpha Company returned, to Bravo Company, $250 of this merchandise on May 3, 2016.
> Freight charges related to this transaction of $150 were paid by Bravo Company.
Use this information to prepare Alpha Company’s compound General Journal entry (without
explanation) for the payment for merchandise on May 15. If no entry is required then write “No
Entry Required.”
FIB – 1
Question 7 (6 points)
Alpha Company uses the periodic inventory system and had the following inventory &
sales activity for the month of May 2016:
Date
Activity
Quantity
Unit Price
May 1
Beginning Inventory
100
$10
May 5
Purchase
200
$11
May 15
Purchase
300
$13
May 25
Purchase
150
$15
Sales were 500 units at $20. Using the LIFO method, determine the dollar values following
for the month of May:
1. Ending Inventory
2. Cost of Goods Available for Sale
3. Cost of Goods Sold
FIB – 2
Question 8 (6 points)
Alpha Company uses the periodic inventory system and had the following inventory &
sales activity for the month of May 2016:
Date
5/1
5/5
5/15
5/25
Activity
Beginning Inventory
Purchase
Purchase
Purchase
Quantity
150
200
300
150
Unit Price
$10
$12
$14
$16
Sales were 525 units at $20. Using the FIFO method, determine the dollar values following
for the month of May:
1. Ending Inventory
2. Cost of Goods Available for Sale
3. Cost of Goods Sold
FIB – 3
Question 9 (6 points)
Alpha Company uses the periodic inventory system and had the following inventory &
sales activity for the month of May 2016: (Round all per unit calculations to the nearest
penny.)
Date
5/1
5/5
5/15
5/25
Activity
Beginning Inventory
Purchase
Purchase
Purchase
Quantity
100
200
300
150
Unit Price
$10.10
$11.15
$13.00
$15.00
Sales were 525 units at $22.00. Using weighted-average method, determine the dollar
values following for the month of May: (Enter only whole dollar values.)
1. Ending Inventory
2. Cost of Goods Available for Sale
3. Cost of Goods Sold
FIB – 4
Question 10 (15 points)
The following is a partial Adjusted Trial Balance for Alpha Company for the month:
Alpha Company
Adjusted Trial Balance (partial)
January 31, 2016
Accounts
Inventory
Debit
$2,750
$12,500
Sales
Sales Discounts
Sales Returns & Allowances
Credit
200
1,200
Purchases
4,000
Purchases Discounts
150
Purchase Returns & Allowances
450
Freight In
50
Advertising Expense
150
Depreciation Expense
145
Freight Out
70
Income Tax Expense
500
Salaries Expense
500
Utilities Expense
100
Additionally, Inventory for December 31, 2015 was $2,700. Prepare a multiple-step income
statement.
What amount should Alpha Company report on a Multi-Step Income Statement for the
following items:
1. Net Sales
2. Cost of Goods Available for Sales
3. Gross Profit
4. General & Administrative Expenses
5. Income before Taxes
FIB – 5
Question 11 (7 points)
On May 15, 2016 the Smoky Bear Company inventory storage facility was completely destroyed in
a fire. Offsite accounting records reflect the normal gross profit rate is 40% of sales. Sales to the
date of the fire were $1,650,000. The April 30, 2016 inventory value was $500,000. Two purchases
were made during May, before the fire, for the values of $500,000 and $800,000. Using the Gross
Profit Method determine the estimated inventory loss due to the fire.
Question 11 options:
Save
FIB – 6
Question 12 (2 points)
The following are selected account balances for Charlie Company’s operations for the FY ended
December 31, 2016. (All balances are normal):
Accounts
Net Sales
Amount
$100,500
Administrative Expenses
22,000
Selling Expenses
12,000
Cost of Goods Sold
46,000
Interest Expense
2,000
Income Tax Expense
1,000
Prepaid Expenses
$5,000
Interest Receivable
$1,000
What is the Net Profit on Sales ratio for the year 2016? (Enter the value as a percentage
rounded to one decimal place. Example, 0.105134 would be entered as 10.5%)
FIB – 7
Question 13 (2 points)
The following are selected account balances for Charlie Company’s operations for the FY ended
December 31, 2016. (All balances are normal):
Accounts
Net Sales
Amount
$225,500
Administrative Expenses
22,000
Selling Expenses
12,000
Cost of Goods Sold
175,250
Interest Expense
2,000
Income Tax Expense
1,000
Prepaid Expenses
$5,000
Interest Receivable
$1,000
What is the Gross Profit Margin ratio for the year 2016? (Enter the value as a percentage
rounded to one decimal place. Example, 0.105134 would be entered as 10.5%)
FIB – 8
Question 14 (2 points)
Alpha Company has the following account balances information for fiscal year 2015 & 2016 (all
balances are normal):
Alpha Company
December 31
Accounts
Merchandise Inventory
2016
2015
$1,200,000
$800,000
25,000
20,000
Sales
3,000,000
2,500,000
Cost of Goods Sold
2,000,000
1,600,000
15,000
10,000
Office Supplies
Freight Out
What is the FY 2016 inventory turnover ratio? Enter the answer as a number rounded to one
decimal place followed by a space and the word times. (Example 1.123 would be entered 1.1
times)
…
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