### Financial Accounting Fundamentals Practice 5 – Week 3 (ACC201)

This is Practice 5 from Financial accounting fundamentals week 3

#### Recording purchases, purchases returns, and purchases allowances

Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.

Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.

## Merchandise accounts and computations

Required:

a. Compute gross profit, the goods available for sale, and the cost of goods sold for the merchandiser. Hint: Not all information may be necessary.
b. Use the above information from a service company and from a merchandiser to compute net income.

### Required information

[The following information applies to the questions displayed below.]

Laker Company reported the following January purchases and sales data for its only product.

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 400 units, where 370 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory.

## Perpetual: Inventory costing methods

Required:
1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.
2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.

Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. (Round cost per unit to 2 decimal places.)

Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.

Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

### Required information

[The following information applies to the questions displayed below.]

Laker Company reported the following January purchases and sales data for its only product.

## Periodic: Inventory costing

Required:

Required:

The Company uses a periodic inventory system. For specific identification, ending inventory consists of 375 units, where 355 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

Determine the cost assigned to ending inventory and to cost of goods sold using specific identification. For specific identification, ending inventory consists of 375 units, where 355 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.