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Principles of Financial Accounting

Exam II

April 13, 2020

Version 2

Show All Work! Points Will Be Deducted For Failure To Show All Work!

1. Addyson, Inc. has the following information available:

Cost Retail

Inventory, October 1 $ 400,000 $ 600,000

Purchases 4,100,000 5,400,000

Sales 5,000,000

Required:

Estimate Addyson’s ending inventory on October 31, 2019.

2. Beasley Poff Company has the following trial balance for the year ending 12/31/19. Ending inventory is $40,000.

REQUIRED:

Prepare financial statements in good form. Make sure the trial balance balances!

3. Waylan, Inc.sells $100,000 ($60,000 cost) to Cinder, Inc. on account (terms 1/15, n30, FOB shipping point). Waylan and Cinder both use perpetual inventory.

REQUIRED: For both Waylan and Cinder, make journal entries to record:

Waylan, Inc. Cinder, Inc.

A. The sale on 12/1/19.

B. The appropriate party pays $2,000 shipping 12/5/19.

B. Cinder pays Waylan the amount due on 12/16/19.

4. The cash account for Beasley Company on 7/31/19 had a balance of $13,550. The bank statement on 7/31/19 had a balance of $16,730. The following additional information is available:

A. A check for $362 was incorrectly charged by the bank as $236.

B. A check of $78 for payment on an account was incorrectly charged by Beasley as $186.

C. The bank collected a note for Beasley totaling $1,219. The principle of the note was $1,150.

D. Outstanding checks totaled $3,573.

E. Deposits in transit totaled $1,830.

F. The bank service charge was $16.

REQUIRED:

A. Prepare a bank reconciliation for Beasley in good form.

B. Make journal entries to adjust cash to the correct balance.

C. What is the balance of cash after the adjusting entries?

5. The beginning inventory of Caitlyn, Inc., purchases, and sales are shown on the following schedule sheet. The units are sold for $40 each.

REQUIRED:

A. Compute inventory using FIFO periodic .

B. Complete the above perpetual inventory record using LIFO perpetual inventory.

C. Prepare an income statement using LIFO perpetual inventory.

DrCr

Cash50,000

Accounts Receivable30,000

Inventory60,000

Equipment300,000

Accum. Depr50,000

Accounts Payable20,000

LT Note Payable50,000

Common Stock25,000

Retained Earnings50,000

Dividends25,000

Sales1,020,000

Sales Discounts, Returns & Allowances20,000

Purchases500,000

Marketing Expense120,000

Administrative Expense110,000

Total1,215,000 1,215,000

P5-10A (2)

1. How do we solve this problem (i.e., what golf club do we choose?)				See Alternative Treatment Of Estimated Inventory
2. What should we do first?				Under The Retained Earnings Statement
Cash	13,500	13,500		Wyman Company						Wyman Company
Accounts Receivable	72,000	72,000		Income Statement						Balance Sheet										Sales		3,430,000
Inventory	257,000	257,000		FYE 12/31/xx						12/31/xx										Purchases Returns & Allowances		93,000
Estimated Returns Inventory	35,000	35,000		Sales				3,430,000												Purchases Discounts		37,000
Office Supplies	3,000	3,000		Sales Returns & Allowances				(100,000)		Assets					Liabilities					Inventory		305,000
Prepaid Insurance	4,500	4,500		Sales Discounts				(50,000)			Current Assets					Current Liabilities				Estimated Returns Inventory		40,000
Land	150,000	150,000		Net Sales					3,280,000			Cash	13,500				Accounts Payable	77,800		Rent Revenue		7,000
Store Equipment	270,000	270,000		Cost of Goods Sold								Accounts Receivable	72,000				Salaries Payable	3,000			Income Summary		3,912,000
Accum. Depr-Store Equip	55,900		55,900		Beginning Inventory			292,000				Inventory	345,000				Customer Refunds Payable	50,000
Office Equipment	78,500	78,500			Purchases		2,650,000					Office Supplies	3,000				Unearned Rent	8,300		Income Summary		3,727,100
Accum. Depr-Office Equip	16,000		16,000		Purchases Returns & Allowances		(93,000)					Prepaid Insurance	4,500			Total Current Liabilities			139,100		Inventory		257,000
Accounts Payable	77,800		77,800		Purchases Discounts		(37,000)				Total Current Assets			438,000							Estimated Returns Inventory		35,000
Salaries Payable	3,000		3,000		Freight In		48,000									Long-Term Liabilities					Sales Returns & Allowances		100,000
Customer Refunds Payable	50,000		50,000		Net Purchases			2,568,000			Plant & Equipment						LT Note Payable	50,000			Sales Discounts		50,000
Unearned Rent	8,300		8,300	Goods Available For Sale				2,860,000				Land	150,000			Total Long-Term Liabilities			50,000		Purchases		2,650,000	Inventory		Est Ret Inventory
LT Note Payable	50,000		50,000	Ending Inventory				345,000				Store Equipment	270,000								Freight In		48,000	257,000		35,000
Common Stock	150,000		150,000	Cost of Goods Sold					2,515,000			Accum. Depr-Store Equip	(55,900)		Total Liabilities				189,100		Sales Salaries Expense		300,000	305,000	257,000	40,000	35,000
Retained Earnings	365,600		365,600	Gross Profit					765,000			Office Equipment	78,500								Advertising Expense		45,000
Dividends	25,000	25,000		Operating Expense								Accum. Depr-Office Equip	(16,000)		Shareholder's Equity						Delivery Expense		9,000
Sales	3,430,000		3,430,000		Marketing Expense						Total Plant & Equipment			426,600		Common Stock		150,000			Depreciation Expense-Store Equipment		6,000	305,000		40,000
Sales Returns & Allowances	100,000	100,000				Sales Salaries Expense	300,000									Retained Earnings		525,500			Misc. Marketing Expense		12,000
Sales Discounts	50,000	50,000				Advertising Expense	45,000			Total Assets				864,600	Total Shareholder's Equity				675,500		Office Salaries Expense		175,000	Income Summary
Purchases	2,650,000	2,650,000				Delivery Expense	9,000														Rent Expense		28,000		3,912,000
Purchases Returns & Allowances	93,000		93,000			Depreciation Expense-Store Equipment	6,000								Total Liabilities & Shareholder's Equity				864,600		Insurance Expense		3,000	3,727,100
Purchases Discounts	37,000		37,000			Misc. Marketing Expense	12,000														Office Supplies Expense		2,000	184,900
Freight In	48,000	48,000			Total Marketing Expense			372,000													Depreciation Expense-Office Equipment		1,500
Sales Salaries Expense	300,000	300,000			Administrative Expense																Misc. Office Expense		3,600		0
Advertising Expense	45,000	45,000				Office Salaries Expense	175,000														Interest Expense		2,000
Delivery Expense	9,000	9,000				Rent Expense	28,000																	Retained Earnings
Depreciation Expense-Store Equipment	6,000	6,000				Insurance Expense	3,000													Income Summary		184,900			365,600
Misc. Marketing Expense	12,000	12,000				Office Supplies Expense	2,000														Retained Earnings		184,900		184,900
Office Salaries Expense	175,000	175,000				Depreciation Expense-Office Equipment	1,500																	25,000
Rent Expense	28,000	28,000				Misc. Office Expense	3,600													Retained Earnings		25,000
Insurance Expense	3,000	3,000			Total Administrative Expense			213,100													Dividends		25,000		525,500
Office Supplies Expense	2,000	2,000		Total Operating Expense					585,100
Depreciation Expense-Office Equipment	1,500	1,500		Operating Income					179,900
Misc. Office Expense	3,600	3,600		Other Income & Expense
Rent Revenue	7,000		7,000		Rent Revenue		7,000
Interest Expense	2,000	2,000			Interest Expense		(2,000)		5,000
				Net Income					184,900
Total		4,343,600	4,343,600

				Wyman Company
				Retained Earnings Statement
				12/31/xx
				Beginning Retained Earnings					365,600
				Net Income					184,900
				Dividends					(25,000)
				Ending Retained Earnings					525,500
				Wyman Company
				Income Statement
				FYE 12/31/xx
				Sales				3,430,000
				Sales Returns & Allowances				(100,000)
				Sales Discounts				(50,000)
				Net Sales					3,280,000
				Cost of Goods Sold
					Beginning Inventory			257,000
					Purchases		2,650,000
					Purchases Returns & Allowances		(93,000)
					Purchases Discounts		(37,000)
					Freight In		48,000
					Net Purchases			2,568,000
				Goods Available For Sale				2,825,000
				Ending Inventory				305,000
				Subtotal				2,520,000
				Increase In Estimated Returns Inventory				(5,000)
				Cost of Goods Sold					2,515,000
				Gross Profit					765,000
				Operating Expense
					Marketing Expense
						Sales Salaries Expense	300,000
						Advertising Expense	45,000
						Delivery Expense	9,000
						Depreciation Expense-Store Equipment	6,000
						Misc. Marketing Expense	12,000
					Total Marketing Expense			372,000
					Administrative Expense
						Office Salaries Expense	175,000
						Rent Expense	28,000
						Insurance Expense	3,000
						Office Supplies Expense	2,000
						Depreciation Expense-Office Equipment	1,500
						Misc. Office Expense	3,600
					Total Administrative Expense			213,100
				Total Operating Expense					585,100
				Operating Income					179,900
				Other Income & Expense
					Rent Revenue		7,000
					Interest Expense		(2,000)		5,000
				Net Income					184,900
				Sales			3,430,000
				Purchase Returns			93,000
				Purchase Discounts			37,000
				Rent Revenue			7,000
				Inventory (Ending)			80,000
						Sales Returns		100,000
						Sales Discounts		50,000
						Purchases		2,650,000
						Frt. In		48,000
						Sales Salaries Expense		300,000
						Advertising Expense		45,000
						Delivery Expense		9,000
						Depreciation Expense-Store Equipment		6,000
						Misc. Marketing Expense		12,000
						Office Salaries Expense		175,000
						Rent Expense		28,000
						Insurance Expense		3,000
						Office Supplies Expense		2,000
						Depreciation Expense-Office Equipment		1,500
						Misc. Office Expense		3,600
						Interest Expense		2,000
						Inventory (Beg)		90,000
						Income Summary		121,900
				Income Summary			345,000
						Retained Earnings		345,000
				Retained Earnings			35,000
						Dividends		35,000
							Retained Earnings
								275,300
							35,000	345,000
								585,300

Exam

		Dr	Cr	LeRoy Company				LeRoy Company
Cash	60,000	50,000		Income Statement				Balance Sheet
Accounts Receivable	80,000	30,000		FYE 12/31/19				12/31/19
Inventory	250,000	60,000
Equipment	400,000	300,000		Sales		1,020,000		Assets					Liabilities
Accum. Depr	100,000		50,000	Sales Returns & Allowances		(20,000)			Current Assets					Current Liabilities
Accounts Payable	90,000		20,000							Cash	50,000				Accounts Payable	20,000
LT Note Payable	50,000		50,000	Net Sales			1,000,000			Accounts Receivable	30,000
Common Stock	75,000		25,000	Cost of Goods Sold						Inventory	100,000			Total Current Liabilities			20,000
Retained Earnings	75,000		50,000		Beginning Inventory	60,000
Dividends	25,000	25,000			Purchases	500,000			Total Current Assets			180,000		Long-Term Liabilities
Sales	3,430,000		1,020,000	Goods Available For Sale		560,000									LT Note Payable	50,000
Sales Discounts, Returns & Allowances	100,000	20,000		Ending Inventory		100,000			Plant & Equipment
Purchases	2,500,000	500,000		Cost of Goods Sold			460,000			Equipment	300,000			Total Long-Term Liabilities			50,000
Marketing Expense	350,000	120,000		Gross Profit			540,000			Accum. Depr	(50,000)
Administrative Expense	280,000	110,000		Operating Expense									Total Liabilities				70,000
Total		1,215,000	1,215,000		Marketing Expense	120,000			Total Plant & Equipment			250,000
					Administrative Expense	110,000							Shareholder's Equity
				Total Operating Expense			230,000	Total Assets				430,000		Common Stock		25,000
				Net Income			310,000							Retained Earnings		335,000
													Total Shareholder's Equity				360,000
				LeRoy Company									Total Liabilities & Shareholder's Equity				430,000
				Retained Earnings Statement
				12/31/19
				Beginning Retained Earnings			50,000
				Net Income			310,000
				Dividends			(25,000)
				Ending Retained Earnings			335,000

LoanAmortBlank

	PMT PMT PMT
	Borrow
Loan	20,000.00
Years	3.00	1	3.00
i	0.10	1	0.100000
Residual (-)	-8,000.00
Payment
Period	Payment	Interest	Principle	Balance
1
2
3
		Note Payable
			0.00
		0.00
		0.00			0.00	0.00
		0.00
		0.00
			0.00

LoanAmort

	PMT PMT PMT
	Borrow
Loan	100,000				Cash		100,000.00
Years	3					Notes Payable		100,000.00
i	0.10000
Residual	-20,000				Notes Payable		24,169.18
Payment	34,169.18				Interest Expense		10,000.00
						Cash		34,169.18
Period	Payment	Interest	Principle	Balance
				100,000.00	Notes Payable		26,586.10
1	34,169.18	10,000.00	24,169.18	75,830.82	Interest Expense		7,583.08
2	34,169.18	7,583.08	26,586.10	49,244.71		Cash		34,169.18
3	34,169.18	4,924.47	29,244.71	20,000.00
					Notes Payable		29,244.71
					Interest Expense		4,924.47
						Cash		34,169.18
		Note Payable
			100,000.00		Notes Payable		20,000.00
		24,169.18				Cash		20,000.00
		26,586.10
		29,244.71
		10,000.00
			10,000.00				222,507.55	222,507.55
								0.00

DemoBlank

Maddie Company

In chapters 1-4, we delt with service companies (dry cleaners, real estate, law,

Income Statement

accounting, etc.)

FYE 12/31/xx

The outputs were services, the inputs were labor, machines (i.e., depreciation),

etc.

In Chapter 5, we move to a retail firm. That is the firm purchases goods to resell

(i.e., inventory)

Therefore, we add COGS to income statement and inventory to current assets.

Chapter 5 (Income Statement) and Chapter 6 (Balance Sheet) are really 1 chapter.

Chapter 6 (Balance Sheet) is important, not to know how much inventory we have,

but how to manage it (i.e., when and how much to reorder, when to liquidate,

etc.)

Mention contra accounts and adjunct accounts.

Ice Cream Sandwiches

COGS

Demo

Maddie Company					1	In chapters 1-4, we delt with service companies (dry cleaners, real estate, law,
Income Statement						accounting, etc.)
FYE 12/31/xx					2	The outputs were services, the inputs were labor, machines (i.e., depreciation),
						etc.
Sales			3,000,000		3	In Chapter 5, we move to a retail firm. That is the firm purchases goods to resell
Sales Discounts			(40,000)			(i.e., inventory)
Sales Returns & Allowances			(160,000)		4	Therefore, we add COGS to income statement and inventory to current assets.
Net Sales				2,800,000	5	Chapter 5 (Income Statement) and Chapter 6 (Balance Sheet) are really 1 chapter.
					6	Chapter 6 (Balance Sheet) is important, not to know how much inventory we have,
Cost of Goods Sold						but how to manage it (i.e., when and how much to reorder, when to liquidate,
	Beg. Inventory		200,000			etc.)
	Purchases	1,770,000			7	Mention contra accounts and adjunct accounts.
	Freight In	40,000			8	Ice Cream Sandwiches
	Purchase Returns & Allowances	30,000
	Purchase Discounts	20,000
	Net Purchases		1,760,000
	Goods Available		1,960,000
	End. Inventory		260,000
Cost of Goods Sold				1,700,000
Gross Profit (or Gross Margin)				1,100,000
Operating Expense
	Marketing Expense		450,000
	Administrative Expense		250,000
Total Operating Expense				700,000
Net Income				400,000

P5-10ABlank

1. How do we solve this problem (i.e., what golf club do we choose?)
2. What should we do first?
		Dr	Cr
Cash	13,500
Accounts Receivable	72,000
Inventory	257,000
Estimated Returns Inventory	35,000
Office Supplies	3,000
Prepaid Insurance	4,500
Land	150,000
Store Equipment	270,000
Accum. Depr-Store Equip	55,900
Office Equipment	78,500
Accum. Depr-Office Equip	16,000
Accounts Payable	77,800
Customer Refund Payable	50,000
Salaries Payable	3,000
Unearned Rent	8,300
LT Note Payable	50,000
Common Stock	150,000
Retained Earnings	365,600
Dividends	25,000
Sales	3,430,000
Sales Returns & Allowances	100,000
Sales Discounts	50,000
Purchases	2,650,000
Purchases Returns & Allowances	93,000
Purchases Discounts	37,000
Freight In	48,000
Sales Salaries Expense	300,000
Advertising Expense	45,000
Delivery Expense	9,000
Depreciation Expense-Store Equipment	6,000
Misc. Marketing Expense	12,000
Office Salaries Expense	175,000
Rent Expense	28,000
Insurance Expense	3,000
Office Supplies Expense	2,000
Depreciation Expense-Office Equipment	1,500
Misc. Office Expense	3,500			Adjust By $100 To Balance
Rent Revenue	7,000
Interest Expense	2,000
Total		- 0	- 0

		Dr	Cr
Cash	60,000
Accounts Receivable	80,000
Inventory	250,000
Equipment	400,000
Accum. Depr	100,000
Accounts Payable	90,000
Salaries Payable	50,000
LT Note Payable	50,000
Mortgage Payable	125,000
Common Stock	75,000
Retained Earnings	75,000
Dividends	25,000
Sales	3,430,000
Sales Discounts, Returns & Allowances	100,000
Purchases	2,500,000
Purchases Discounts, Returns & Allowances	50,000
Marketing Expense	400,000
Administrative Expense	300,000
Total		- 0	- 0

					Retained Earnings
						275,300
					35,000	345,000
						585,300

P5-10A

1. How do we solve this problem (i.e., what golf club do we choose?)				See Alternative Treatment Of Estimated Inventory
2. What should we do first?				Under The Retained Earnings Statement
Cash	13,500	13,500		Wyman Company						Wyman Company
Accounts Receivable	72,000	72,000		Income Statement						Balance Sheet										Sales		3,430,000
Inventory	257,000	257,000		FYE 12/31/xx						12/31/xx										Purchases Returns & Allowances		93,000
Estimated Returns Inventory	35,000	35,000		Sales				3,430,000												Purchases Discounts		37,000
Office Supplies	3,000	3,000		Sales Returns & Allowances				(100,000)		Assets					Liabilities					Inventory		305,000
Prepaid Insurance	4,500	4,500		Sales Discounts				(50,000)			Current Assets					Current Liabilities				Estimated Returns Inventory		40,000
Land	150,000	150,000		Net Sales					3,280,000			Cash	13,500				Accounts Payable	77,800		Rent Revenue		7,000
Store Equipment	270,000	270,000		Cost of Goods Sold								Accounts Receivable	72,000				Salaries Payable	3,000			Income Summary		3,912,000
Accum. Depr-Store Equip	55,900		55,900		Beginning Inventory			292,000				Inventory	345,000				Customer Refunds Payable	50,000
Office Equipment	78,500	78,500			Purchases		2,650,000					Office Supplies	3,000				Unearned Rent	8,300		Income Summary		3,727,100
Accum. Depr-Office Equip	16,000		16,000		Purchases Returns & Allowances		(93,000)					Prepaid Insurance	4,500			Total Current Liabilities			139,100		Inventory		257,000
Accounts Payable	77,800		77,800		Purchases Discounts		(37,000)				Total Current Assets			438,000							Estimated Returns Inventory		35,000
Salaries Payable	3,000		3,000		Freight In		48,000									Long-Term Liabilities					Sales Returns & Allowances		100,000
Customer Refunds Payable	50,000		50,000		Net Purchases			2,568,000			Plant & Equipment						LT Note Payable	50,000			Sales Discounts		50,000
Unearned Rent	8,300		8,300	Goods Available For Sale				2,860,000				Land	150,000			Total Long-Term Liabilities			50,000		Purchases		2,650,000	Inventory		Est Ret Inventory
LT Note Payable	50,000		50,000	Ending Inventory				345,000				Store Equipment	270,000								Freight In		48,000	257,000		35,000
Common Stock	150,000		150,000	Cost of Goods Sold					2,515,000			Accum. Depr-Store Equip	(55,900)		Total Liabilities				189,100		Sales Salaries Expense		300,000	305,000	257,000	40,000	35,000
Retained Earnings	365,600		365,600	Gross Profit					765,000			Office Equipment	78,500								Advertising Expense		45,000
Dividends	25,000	25,000		Operating Expense								Accum. Depr-Office Equip	(16,000)		Shareholder's Equity						Delivery Expense		9,000
Sales	3,430,000		3,430,000		Marketing Expense						Total Plant & Equipment			426,600		Common Stock		150,000			Depreciation Expense-Store Equipment		6,000	305,000		40,000
Sales Returns & Allowances	100,000	100,000				Sales Salaries Expense	300,000									Retained Earnings		525,500			Misc. Marketing Expense		12,000
Sales Discounts	50,000	50,000				Advertising Expense	45,000			Total Assets				864,600	Total Shareholder's Equity				675,500		Office Salaries Expense		175,000	Income Summary
Purchases	2,650,000	2,650,000				Delivery Expense	9,000														Rent Expense		28,000		3,912,000
Purchases Returns & Allowances	93,000		93,000			Depreciation Expense-Store Equipment	6,000								Total Liabilities & Shareholder's Equity				864,600		Insurance Expense		3,000	3,727,100
Purchases Discounts	37,000		37,000			Misc. Marketing Expense	12,000														Office Supplies Expense		2,000	184,900
Freight In	48,000	48,000			Total Marketing Expense			372,000													Depreciation Expense-Office Equipment		1,500
Sales Salaries Expense	300,000	300,000			Administrative Expense																Misc. Office Expense		3,600		0
Advertising Expense	45,000	45,000				Office Salaries Expense	175,000														Interest Expense		2,000
Delivery Expense	9,000	9,000				Rent Expense	28,000																	Retained Earnings
Depreciation Expense-Store Equipment	6,000	6,000				Insurance Expense	3,000													Income Summary		184,900			365,600
Misc. Marketing Expense	12,000	12,000				Office Supplies Expense	2,000														Retained Earnings		184,900		184,900
Office Salaries Expense	175,000	175,000				Depreciation Expense-Office Equipment	1,500																	25,000
Rent Expense	28,000	28,000				Misc. Office Expense	3,600													Retained Earnings		25,000
Insurance Expense	3,000	3,000			Total Administrative Expense			213,100													Dividends		25,000		525,500
Office Supplies Expense	2,000	2,000		Total Operating Expense					585,100
Depreciation Expense-Office Equipment	1,500	1,500		Operating Income					179,900
Misc. Office Expense	3,600	3,600		Other Income & Expense
Rent Revenue	7,000		7,000		Rent Revenue		7,000
Interest Expense	2,000	2,000			Interest Expense		(2,000)		5,000
				Net Income					184,900
Total		4,343,600	4,343,600

				Wyman Company
				Retained Earnings Statement
				12/31/xx
				Beginning Retained Earnings					365,600
				Net Income					184,900
				Dividends					(25,000)
				Ending Retained Earnings					525,500
				Wyman Company
				Income Statement
				FYE 12/31/xx
				Sales				3,430,000
				Sales Returns & Allowances				(100,000)
				Sales Discounts				(50,000)
				Net Sales					3,280,000
				Cost of Goods Sold
					Beginning Inventory			257,000
					Purchases		2,650,000
					Purchases Returns & Allowances		(93,000)
					Purchases Discounts		(37,000)
					Freight In		48,000
					Net Purchases			2,568,000
				Goods Available For Sale				2,825,000
				Ending Inventory				305,000
				Subtotal				2,520,000
				Increase In Estimated Returns Inventory				(5,000)
				Cost of Goods Sold					2,515,000
				Gross Profit					765,000
				Operating Expense
					Marketing Expense
						Sales Salaries Expense	300,000
						Advertising Expense	45,000
						Delivery Expense	9,000
						Depreciation Expense-Store Equipment	6,000
						Misc. Marketing Expense	12,000
					Total Marketing Expense			372,000
					Administrative Expense
						Office Salaries Expense	175,000
						Rent Expense	28,000
						Insurance Expense	3,000
						Office Supplies Expense	2,000
						Depreciation Expense-Office Equipment	1,500
						Misc. Office Expense	3,600
					Total Administrative Expense			213,100
				Total Operating Expense					585,100
				Operating Income					179,900
				Other Income & Expense
					Rent Revenue		7,000
					Interest Expense		(2,000)		5,000
				Net Income					184,900
				Sales			3,430,000
				Purchase Returns			93,000
				Purchase Discounts			37,000
				Rent Revenue			7,000
				Inventory (Ending)			80,000
						Sales Returns		100,000
						Sales Discounts		50,000
						Purchases		2,650,000
						Frt. In		48,000
						Sales Salaries Expense		300,000
						Advertising Expense		45,000
						Delivery Expense		9,000
						Depreciation Expense-Store Equipment		6,000
						Misc. Marketing Expense		12,000
						Office Salaries Expense		175,000
						Rent Expense		28,000
						Insurance Expense		3,000
						Office Supplies Expense		2,000
						Depreciation Expense-Office Equipment		1,500
						Misc. Office Expense		3,600
						Interest Expense		2,000
						Inventory (Beg)		90,000
						Income Summary		121,900
				Income Summary			345,000
						Retained Earnings		345,000
				Retained Earnings			35,000
						Dividends		35,000
							Retained Earnings
								275,300
							35,000	345,000
								585,300

5-4ABlank

Perpetual

Periodic

Seller

Buyer

Seller

Buyer

8/1/xx

8/2/xx

8/16/xx

8/5/xx

8/9/xx

8/31/xx

8/15/xx

8/25/xx

5-4A

			Perpetual				Perpetual					Periodic				Periodic
			Seller				Buyer					Seller				Buyer
8/1/xx	Accounts Receivable		48,000		Inventory		48,000			Accounts Receivable		48,000		Purchases		48,000
		Sales		48,000		Accounts Payable		48,000			Sales		48,000		Accounts Payable		48,000
		(FOB Destination, 2/15, n/eom)									(FOB Destination, 2/15, n/eom)
	COGS		28,800		N/A					N/A				N/A
		Inventory		28,800
8/2/xx	Freight Out		1,150		N/A					Freight Out		1,150		N/A
		Cash		1,150							Cash		1,150
8/16/xx	Cash		47,040		Accounts Payable		48,000		Accounts Rec	Cash		47,040		Accounts Payable		48,000
	Sales Discounts		960			Inventory		960	48,000	Sales Discounts		960			Purchase Discount		960
		Accounts Receivable		48,000		Cash		47,040			Accounts Receivable		48,000		Cash		47,040
8/5/xx	Accounts Receivable		66,000		Inventory		66,000		48,000	Accounts Receivable		66,000		Purchases		66,000
		Sales		66,000		Accounts Payable		66,000			Sales		66,000		Accounts Payable		66,000
		(FOB Shipping Point, n/EOM)									(FOB Shipping Point, n/EOM)
	COGS		40,000		N/A					N/A				N/A
		Inventory		40,000
8/9/xx					Inventory		2,300							Freight In		2,300
						Cash		2,300							Cash		2,300
8/31/xx	Cash		66,000		Accounts Payable		66,000		Accounts Rec	Cash		66,000		Accounts Payable		66,000
		Accounts Receivable		66,000		Cash		66,000	66,000		Accounts Receivable		66,000		Cash		66,000
									66,000
8/15/xx	Accounts Receivable		58,700		Inventory		58,700			Accounts Receivable		58,700		Purchases		58,700
		Sales		58,700		Accounts Payable		58,700			Sales		58,700		Accounts Payable		58,700
		(FOB Shipping Point, 1/10, n/30)									(FOB Shipping Point, 1/10, n/30)
	COGS		35,000		N/A					N/A				N/A
		Inventory		35,000
	Accounts Receivable		1,675		Inventory		1,675			Accounts Receivable		1,675		Freight In		1,675
		Cash		1,675		Accounts Payable		1,675			Cash		1,675		Accounts Payable		1,675
						(Why?)									(Why?)
8/25/xx	Cash		59,788		Accounts Payable		60,375		Accounts Rec	Cash		59,788		Accounts Payable		60,375
	Sales Discounts		587			Inventory		587	58,700	Sales Discounts		587			Purchase Discounts		587
		Accounts Receivable		60,375		Cash		59,788	1,675		Accounts Receivable		60,375		Cash		59,788
		What if Beartooth Pays Late?
									60,375

5-4B

			Perpetual				Perpetual					Periodic				Periodic
			Seller				Buyer					Seller				Buyer
4/2/xx	Accounts Receivable		31,360		Inventory		31,360			Accounts Receivable		48,000		Purchases		48,000
		Sales		31,360		Accounts Payable		31,360			Sales		48,000		Accounts Payable		48,000
		(FOB Shipping Pt, 2/10, n/30)									(FOB Destination, 2/15, n/eom)
	COGS		19,200		N/A					N/A				N/A
		Inventory		19,200
4/2/xx	Accounts Receivable		330		N/A					Freight Out		1,150		N/A
		Cash		330							Cash		1,150
4/12/xx	Cash		31,360		Accounts Payable		31,360		Accounts Rec	Cash		47,040		Accounts Payable		48,000
									31,360	Sales Discounts		960			Purchase Discount		960
		Accounts Receivable		31,360		Cash		31,360			Accounts Receivable		48,000		Cash		47,040
4/8/xx	Accounts Receivable		49,005		Inventory		49,005
		Sales		49,005		Accounts Payable		49,005
		(FOB Shipping Point, n/EOM)
										Accounts Receivable		66,000		Purchases		66,000
	COGS		29,700		N/A						Sales		66,000		Accounts Payable		66,000
		Inventory		29,700							(FOB Shipping Point, n/EOM)
4/8/xx	Freight Out		710							N/A				N/A
		Cash		710
														Freight In		2,300
4/23/xx	Cash		49,005		Accounts Payable		49,005								Cash		2,300
		Accounts Receivable		49,005		Cash		49,005
									Accounts Rec	Cash		66,000		Accounts Payable		66,000
									49,005		Accounts Receivable		66,000		Cash		66,000
4/24/xx	Accounts Receivable		67,350		Inventory		67,350
		Sales		67,350		Accounts Payable		67,350
		(FOB Shipping Point, n/eom)							49,005
										Accounts Receivable		58,700		Purchases		58,700
	COGS		40,400		N/A						Sales		58,700		Accounts Payable		58,700
		Inventory		40,400							(FOB Shipping Point, 1/10, n/30)
4/26/xx					Inventory		875			N/A				N/A
						Cash		875
										Accounts Receivable		1,675		Freight In		1,675
4/30/xx	Cash		67,350		Accounts Payable		67,350				Cash		1,675		Accounts Payable		1,675
		Accounts Receivable		67,350		Cash		67,350							(Why?)
									Accounts Rec	Cash		59,788		Accounts Payable		60,375
									67,350	Sales Discounts		587			Purchase Discounts		587
									- 0		Accounts Receivable		60,375		Cash		59,788
									67,350

P5-10BBlank

1. How do we solve this problem (i.e., what golf club do we choose?)
2. What should we do first?
Cash	125,000				Simkins Company						Simkins Company
Accounts Receivable	340,000				Income Statement						Balance Sheet										Sales		- 0
Inventory	415,000				FYE 6/30/xx						6/30/xx										Purchases Returns & Allowances		- 0
Estimated Returns Inventory	25,000																				Purchases Discounts		- 0
Office Supplies	9,000				Sales				- 0		Assets					Liabilities					Inventory		541,000
Prepaid Insurance	18,000				Sales Returns & Allowances				- 0			Current Assets					Current Liabilities				Rent Revenue		- 0
Land	300,000				Sales Discounts				- 0				Cash	- 0				Accounts Payable	- 0
Store Equipment	550,000				Net Sales					- 0			Accounts Receivable	- 0				Customer Refund Payable	- 0			Income Summary		541,000
Accum. Depr-Store Equip	190,000												Inventory	541,000				Salaries Payable	- 0
Office Equipment	250,000				Cost of Goods Sold								Office Supplies	- 0				Unearned Rent	- 0		Income Summary		- 0
Accum. Depr-Office Equip	110,000					Beginning Inventory			- 0				Prepaid Insurance	- 0			Total Current Liabilities			- 0		Inventory		- 0
Accounts Payable	85,000					Purchases		- 0				Total Current Assets			541,000							Sales Returns & Allowances		- 0
Customer Refund Payable	30,000					Purchases Returns & Allowances		- 0									Long-Term Liabilities					Sales Discounts		- 0
Salaries Payable	9,000					Purchases Discounts		- 0				Plant & Equipment						LT Note Payable	- 0			Purchases		- 0
Unearned Rent	6,000					Freight In		- 0					Land	- 0			Total Long-Term Liabilities			- 0		Freight In		- 0	Inventory
LT Note Payable	50,000					Net Purchases			- 0				Store Equipment	- 0								Sales Salaries Expense		- 0	0
Common Stock	300,000				Goods Available For Sale				- 0				Accum. Depr-Store Equip	- 0		Total Liabilities				- 0		Advertising Expense		- 0	541,000	0
Retained Earnings	520,000				Ending Inventory				541,000				Office Equipment	- 0								Delivery Expense		- 0
Dividends	275,000				Cost of Goods Sold					(541,000)			Accum. Depr-Office Equip	- 0		Shareholder's Equity						Depreciation Expense-Store Equipment		- 0
Sales	6,740,000			I Changed This								Total Plant & Equipment			- 0		Common Stock		- 0			Misc. Marketing Expense		- 0	541,000
Sales Returns & Allowances	100,000			I Changed This	Gross Profit					541,000							Retained Earnings		541,000			Office Salaries Expense		- 0
Sales Discounts	50,000			I Changed This							Total Assets				541,000	Total Shareholder's Equity				541,000		Rent Expense		- 0	Income Summary
Purchases	4,200,000			I Changed This To Make Trial Balance Balance	Operating Expense																	Insurance Expense		- 0		541,000
Purchases Returns & Allowances	32,000					Marketing Expense										Total Liabilities & Shareholder's Equity				541,000		Office Supplies Expense		- 0	0
Purchases Discounts	13,000						Sales Salaries Expense	- 0														Depreciation Expense-Office Equipment		- 0	541,000
Freight In	45,000						Advertising Expense	- 0														Misc. Office Expense		- 0
Sales Salaries Expense	580,000						Delivery Expense	- 0														Interest Expense		- 0		0
Advertising Expense	315,000						Depreciation Expense-Store Equipment	- 0
Delivery Expense	18,000						Misc. Marketing Expense	- 0													Income Summary		541,000		Retained Earnings
Depreciation Expense-Store Equipment	12,000																					Retained Earnings		541,000		0
Misc. Marketing Expense	28,000					Total Marketing Expense			- 0																	541,000
Office Salaries Expense	375,000																				Retained Earnings		275,000		275,000
Rent Expense	43,000					Administrative Expense																Dividends		275,000
Insurance Expense	17,000						Office Salaries Expense	- 0																		266,000
Office Supplies Expense	5,000						Rent Expense	- 0
Depreciation Expense-Office Equipment	4,000						Insurance Expense	- 0
Misc. Office Expense	16,000						Office Supplies Expense	- 0
Rent Revenue	32,500						Depreciation Expense-Office Equipment	- 0
Interest Expense	2,500						Misc. Office Expense	- 0
Total		- 0	- 0
						Total Administrative Expense			- 0

					Total Operating Expense					- 0
					Operating Income					541,000
					Other Income & Expense
						Rent Revenue		- 0
						Interest Expense		- 0
										- 0
					Net Income					541,000
					Simkins Company
					Retained Earnings Statement
					6/30/xx
					Beginning Retained Earnings					- 0
					Net Income					541,000
					Dividends					- 0
					Ending Retained Earnings					541,000
					Sales			- 0
					Purchase Returns			- 0
					Purchase Discounts			- 0
					Rent Revenue			- 0
					Inventory (Ending)			80,000
							Sales Returns		- 0
							Sales Discounts		- 0
							Purchases		- 0
							Frt. In		- 0
							Sales Salaries Expense		- 0
							Advertising Expense		- 0
							Delivery Expense		- 0
							Depreciation Expense-Store Equipment		- 0
							Misc. Marketing Expense		- 0
							Office Salaries Expense		- 0
							Rent Expense		- 0
							Insurance Expense		- 0
							Office Supplies Expense		- 0
							Depreciation Expense-Office Equipment		- 0
							Misc. Office Expense		- 0
							Interest Expense		- 0
							Inventory (Beg)		90,000
							Income Summary		(10,000)
					Income Summary			345,000
							Retained Earnings		345,000
					Retained Earnings			35,000
							Dividends		35,000
								Retained Earnings
									275,300
								35,000	345,000
									585,300

P5-10B

1. How do we solve this problem (i.e., what golf club do we choose?)
2. What should we do first?
Cash	125,000	125,000			Simkins Company						Simkins Company
Accounts Receivable	340,000	340,000			Income Statement						Balance Sheet										Sales		6,740,000
Inventory	415,000	415,000			FYE 6/30/xx						6/30/xx										Purchases Returns & Allowances		32,000
Estimated Returns Inventory	25,000	25,000																			Purchases Discounts		13,000
Office Supplies	9,000	9,000			Sales				6,740,000		Assets					Liabilities					Inventory		541,000
Prepaid Insurance	18,000	18,000			Sales Returns & Allowances				(100,000)			Current Assets					Current Liabilities				Rent Revenue		32,500
Land	300,000	300,000			Sales Discounts				(50,000)				Cash	125,000				Accounts Payable	85,000
Store Equipment	550,000	550,000			Net Sales					6,590,000			Accounts Receivable	340,000				Customer Refund Payable	30,000			Income Summary		7,358,500
Accum. Depr-Store Equip	190,000		190,000										Inventory	541,000				Salaries Payable	9,000
Office Equipment	250,000	250,000			Cost of Goods Sold								Office Supplies	9,000				Unearned Rent	6,000		Income Summary		6,225,500
Accum. Depr-Office Equip	110,000		110,000			Beginning Inventory			440,000				Prepaid Insurance	18,000			Total Current Liabilities			130,000		Inventory		415,000
Accounts Payable	85,000		85,000			Purchases		4,200,000				Total Current Assets			1,033,000							Sales Returns & Allowances		100,000
Customer Refund Payable	30,000		30,000			Purchases Returns & Allowances		(32,000)									Long-Term Liabilities					Sales Discounts		50,000
Salaries Payable	9,000		9,000			Purchases Discounts		(13,000)				Plant & Equipment						LT Note Payable	50,000			Purchases		4,200,000
Unearned Rent	6,000		6,000			Freight In		45,000					Land	300,000			Total Long-Term Liabilities			50,000		Freight In		45,000	Inventory
LT Note Payable	50,000		50,000			Net Purchases			4,200,000				Store Equipment	550,000								Sales Salaries Expense		580,000	415,000
Common Stock	300,000		300,000		Goods Available For Sale				4,640,000				Accum. Depr-Store Equip	(190,000)		Total Liabilities				180,000		Advertising Expense		315,000	541,000	415,000
Retained Earnings	520,000		520,000		Ending Inventory				541,000				Office Equipment	250,000								Delivery Expense		18,000
Dividends	275,000	275,000			Cost of Goods Sold					4,099,000			Accum. Depr-Office Equip	(110,000)		Shareholder's Equity						Depreciation Expense-Store Equipment		12,000
Sales	6,740,000		6,740,000	I Changed This								Total Plant & Equipment			800,000		Common Stock		300,000			Misc. Marketing Expense		28,000	541,000
Sales Returns & Allowances	100,000	100,000		I Changed This	Gross Profit					2,491,000							Retained Earnings		1,353,000			Office Salaries Expense		375,000
Sales Discounts	50,000	50,000		I Changed This							Total Assets				1,833,000	Total Shareholder's Equity				1,653,000		Rent Expense		43,000	Income Summary
Purchases	4,200,000	4,200,000		I Changed This To Make Trial Balance Balance	Operating Expense																	Insurance Expense		17,000		7,358,500
Purchases Returns & Allowances	32,000		32,000			Marketing Expense										Total Liabilities & Shareholder's Equity				1,833,000		Office Supplies Expense		5,000	6,225,500
Purchases Discounts	13,000		13,000				Sales Salaries Expense	580,000														Depreciation Expense-Office Equipment		4,000	1,133,000
Freight In	45,000	45,000					Advertising Expense	315,000														Misc. Office Expense		16,000
Sales Salaries Expense	580,000	580,000					Delivery Expense	18,000														Interest Expense		2,500		0
Advertising Expense	315,000	315,000					Depreciation Expense-Store Equipment	12,000
Delivery Expense	18,000	18,000					Misc. Marketing Expense	28,000													Income Summary		1,133,000		Retained Earnings
Depreciation Expense-Store Equipment	12,000	12,000																				Retained Earnings		1,133,000		520,000
Misc. Marketing Expense	28,000	28,000				Total Marketing Expense			953,000																	1,133,000
Office Salaries Expense	375,000	375,000																			Retained Earnings		275,000		275,000
Rent Expense	43,000	43,000				Administrative Expense																Dividends		275,000
Insurance Expense	17,000	17,000					Office Salaries Expense	375,000																		1,378,000
Office Supplies Expense	5,000	5,000					Rent Expense	43,000
Depreciation Expense-Office Equipment	4,000	4,000					Insurance Expense	17,000
Misc. Office Expense	16,000	16,000					Office Supplies Expense	5,000
Rent Revenue	32,500		32,500				Depreciation Expense-Office Equipment	4,000
Interest Expense	2,500	2,500					Misc. Office Expense	16,000
Total		8,117,500	8,117,500
						Total Administrative Expense			460,000

					Total Operating Expense					1,413,000
					Operating Income					1,078,000
					Other Income & Expense
						Rent Revenue		32,500
						Interest Expense		(2,500)
										30,000
					Net Income					1,108,000
					Simkins Company
					Retained Earnings Statement
					6/30/xx
					Beginning Retained Earnings					520,000
					Net Income					1,108,000
					Dividends					(275,000)
					Ending Retained Earnings					1,353,000
					Sales			6,740,000
					Purchase Returns			32,000
					Purchase Discounts			13,000
					Rent Revenue			32,500
					Inventory (Ending)			80,000
							Sales Returns		100,000
							Sales Discounts		50,000
							Purchases		4,200,000
							Frt. In		45,000
							Sales Salaries Expense		580,000
							Advertising Expense		315,000
							Delivery Expense		18,000
							Depreciation Expense-Store Equipment		12,000
							Misc. Marketing Expense		28,000
							Office Salaries Expense		375,000
							Rent Expense		43,000
							Insurance Expense		17,000
							Office Supplies Expense		5,000
							Depreciation Expense-Office Equipment		4,000
							Misc. Office Expense		16,000
							Interest Expense		2,500
							Inventory (Beg)		90,000
							Income Summary		997,000
					Income Summary			345,000
							Retained Earnings		345,000
					Retained Earnings			35,000
							Dividends		35,000
								Retained Earnings
									275,300
								35,000	345,000
									585,300

Comprehensive

				Cash		Accounts Receivable		Inventory		Estimated Returns Inventory
				83,600	5,000	233,900		624,400		28,000
				22,300	600	67,130	22,300	35,280	41,000	35,000
1. How do we solve this problem (i.e., what golf club do we choose?)				54,000	35,280	108,900	67,130	600	32,000
2. What should we do first?				67,130	11,000	2,300	42,900	18,700
				42,900	18,700	77,175	111,200	8,000	70,000
Cash	83,600	83,600		111,200	33,450			87,120	4,950			Cash	84,500	- 0	Palisade Creek Co.						Palisade Creek Co.
Accounts Receivable	233,900	233,900			13,230			4,800	47,000			Accounts Receivable	245,875	- 0	Income Statement						Balance Sheet										Sales		5,376,205
Inventory	624,400	624,400			2,300				13,950			Inventory	570,000	- 0	FYE 5/31/xx						5/31/xx										Purchases Returns & Allowances		- 0
Estimated Returns Inventory	28,000	28,000			7,500							Estimated Returns Inventory	63,000	- 0																	Purchases Discounts		- 0
Prepaid Insurance	16,800	16,800			85,000							Prepaid Insurance	4,800	- 0	Sales				5,376,205		Assets					Liabilities					Inventory		ERROR:#REF!
Store Supplies	11,400	11,400			2,400							Store Supplies	4,000	- 0	Sales Returns & Allowances				(80,730)			Current Assets					Current Liabilities				Rent Revenue		- 0
Land		- 0			82,170							Store Equipment	569,500	- 0	Sales Discounts				- 0				Cash	84,500				Accounts Payable	63,150
Store Equipment	569,500	569,500										Accum. Depr-Store Equip	- 0	70,700	Net Sales					5,295,475			Accounts Receivable	245,875				Customer Refunds Payable	110,000			Income Summary		ERROR:#REF!
Accum. Depr-Store Equip	56,700		56,700	84,500		245,875		570,000		63,000		Office Equipment	- 0	- 0	Cost of Goods Sold					2,979,150			Inventory	570,000				Salaries Payable	13,600
Office Equipment		- 0										Accum. Depr-Office Equip	- 0	- 0									Estimated Returns Inventory	63,000				Unearned Rent	- 0		Income Summary		ERROR:#REF!
Accum. Depr-Office Equip			- 0	Prepaid Insurance		Store Supplies		Store Equipment		Accum. Depr-Store Equip		Accounts Payable	- 0	63,150	Gross Profit					2,316,325			Prepaid Insurance	4,800			Total Current Liabilities			186,750		Inventory		ERROR:#REF!
Accounts Payable	96,600		96,600	16,800	12,000	11,400		569,500			56,700	Customer Refunds Payable	- 0	110,000									Store Supplies	4,000								Sales Returns & Allowances		ERROR:#REF!
Customer Refunds Payable	50,000		50,000			2,400	9,800				14,000	Salaries Payable	- 0	13,600	Operating Expense							Total Current Assets			972,175		Long-Term Liabilities					Sales Discounts		ERROR:#REF!
Salaries Payable			- 0									Unearned Rent	- 0	- 0		Marketing Expense												LT Note Payable	- 0			Cost of Goods Sold		ERROR:#REF!
Unearned Rent			- 0									LT Note Payable	- 0	- 0			Sales Salaries Expense	727,800				Plant & Equipment					Total Long-Term Liabilities			- 0		Freight In		ERROR:#REF!	Inventory
LT Note Payable			- 0									Common Stock	- 0	100,000			Advertising Expense	292,000														Sales Salaries Expense		ERROR:#REF!	ERROR:#REF!
Common Stock	100,000		100,000									Retained Earnings	- 0	585,300			Depreciation Expense	14,000					Store Equipment	569,500		Total Liabilities				186,750		Advertising Expense		ERROR:#REF!	570,000	ERROR:#REF!
Retained Earnings	585,300		585,300									Dividends	135,000	- 0			Store Supplies Expense	9,800					Accum. Depr-Store Equip	(70,700)								Depreciation Expense		ERROR:#REF!
Dividends	135,000	135,000		4,800		4,000		569,500			70,700	Sales	- 0	5,376,205			Misc. Marketing Expense	12,600					Office Equipment	- 0		Shareholder's Equity						Store Supplies Expense		ERROR:#REF!
Sales	5,069,000		5,069,000									Sales Returns & Allowances	80,730	- 0									Accum. Depr-Office Equip	- 0			Common Stock		100,000			Misc. Marketing Expense		ERROR:#REF!	ERROR:#REF!
Sales Returns & Allowances		- 0		Office Equipment		Accum. Depr-Office Equip		Accounts Payable		Customer Refunds Payable		Sales Discounts	- 0	- 0		Total Marketing Expense			1,056,200			Total Plant & Equipment			498,800		Retained Earnings		1,184,225			Office Salaries Expense		ERROR:#REF!
Sales Discounts		- 0		- 0			- 0		96,600		50,000	Cost of Goods Sold	2,979,150	- 0												Total Shareholder's Equity				1,284,225		Rent Expense		ERROR:#REF!	Income Summary
Cost of Goods Sold	2,823,000	2,823,000						35,280	35,280		60,000	Purchases Returns & Allowances	- 0	- 0		Administrative Expense					Total Assets				1,470,975							Insurance Expense		ERROR:#REF!		ERROR:#REF!
Purchases Returns & Allowances			- 0					33,450	87,120			Purchases Discounts	- 0	- 0			Office Salaries Expense	417,700								Total Liabilities & Shareholder's Equity				1,470,975		- 0		ERROR:#REF!	ERROR:#REF!
Purchases Discounts			- 0					4,950				Freight In	- 0	- 0			Rent Expense	88,700														- 0		ERROR:#REF!	ERROR:#REF!
Freight In		- 0						82,170				Sales Salaries Expense	727,800	- 0			Insurance Expense	12,000														Misc. Office Expense		ERROR:#REF!
Sales Salaries Expense	664,800	664,800										Advertising Expense	292,000	- 0			- 0	- 0														- 0		ERROR:#REF!		ERROR:#REF!
Advertising Expense	281,000	281,000										Depreciation Expense	14,000	- 0			- 0	- 0
Depreciation Expense		- 0		- 0			- 0		63,150		110,000	Store Supplies Expense	9,800	- 0			Misc. Office Expense	7,800													Income Summary		ERROR:#REF!		Retained Earnings
Store Supplies Expense		- 0										Misc. Marketing Expense	12,600	- 0																		Retained Earnings		ERROR:#REF!		585,300
Misc. Marketing Expense	12,600	12,600		Salaries Payable		Unearned Rent		LT Note Payable		Common Stock		Office Salaries Expense	417,700	- 0		Total Administrative Expense			526,200																	ERROR:#REF!
Office Salaries Expense	382,100	382,100			- 0		- 0		- 0		100,000	Rent Expense	88,700	- 0																	Retained Earnings		135,000		135,000
Rent Expense	83,700	83,700			13,600							Insurance Expense	12,000	- 0	Total Operating Expense					1,582,400												Dividends		135,000
Insurance Expense		- 0										- 0	- 0	- 0																						ERROR:#REF!
		- 0										- 0	- 0	- 0	Operating Income					733,925
		- 0										Misc. Office Expense	7,800	- 0
Misc. Office Expense	7,800	7,800										Rent Revenue	- 0	- 0	Other Income & Expense
Rent Revenue			- 0									- 0	- 0	- 0		Rent Revenue		- 0
Interest Expense		- 0			13,600		- 0		- 0		100,000	Interest Expense	- 0	- 0		Interest Expense		- 0
												Total	6,318,955	6,318,955
Total		5,957,600	5,957,600	Retained Earnings		Dividends		Sales		Sales Returns & Allowances					Total Other Income & Expense					- 0
					585,300	135,000			5,069,000	- 0
									67,130	13,230					Net Income					733,925
									54,000	7,500
										60,000					Palisade Creek Co.
									108,900						Retained Earnings Statement
									77,175						5/31/xx

					585,300	135,000			5,376,205	80,730					Beginning Retained Earnings					585,300
															Net Income					733,925
				Sales Discounts		Cost of Goods Sold		Purchases Returns & Allowances		Purchases Discounts					Dividends					(135,000)
				- 0		2,823,000			- 0		- 0				Ending Retained Earnings					1,184,225
						41,000
						32,000	8,000
						70,000	4,800								Sales			5,376,205
						47,000	35,000								Purchase Returns			- 0
						13,950									Purchase Discounts			- 0
															Rent Revenue			- 0
				- 0		2,979,150			- 0		- 0				Inventory (Ending)

				Freight In		Sales Salaries Expense		Advertising Expense		Depreciation Expense							Sales Returns		80,730
				- 0		664,800		281,000		- 0							Sales Discounts		- 0
						56,000		11,000		14,000							COGS		2,979,150
						7,000											Frt. In
																	Sales Salaries Expense		727,800
																	Advertising Expense		292,000
																	Depreciation Expense		14,000
																	Store Supplies Expense		9,800
				- 0		727,800		292,000		14,000							Misc. Marketing Expense		12,600
																	Office Salaries Expense		417,700
				Store Supplies Expense		Misc. Marketing Expense		Office Salaries Expense		Rent Expense							Rent Expense		88,700
				- 0		12,600		382,100		83,700							Insurance Expense		12,000
				9,800				29,000		5,000							- 0		- 0
								6,600									- 0
																	Misc. Office Expense		7,800
																	- 0
																	Inventory (Beg)
																	Income Summary		733,925
				9,800		12,600		417,700		88,700
															Income Summary			733,925
				Insurance Expense		- 0		- 0		Misc. Office Expense							Retained Earnings		733,925
				- 0		- 0		- 0		7,800
				12,000											Retained Earnings			135,000
																	Dividends		135,000

																		Retained Earnings
																			585,300
																		135,000	733,925
				12,000		- 0		- 0		7,800
																			1,184,225
				Rent Revenue		Interest Expense		- 0		- 0
					- 0	- 0





					- 0	- 0		- 0	- 0	- 0	- 0

DateUnitsCost/$UnitsCost/COGSUnits InCost/Total

PurchUnitPurchSoldUnitInventoryUnitInventory$

1/1xx30020.006,000

1/10/xx50021.0010,50030020.006,000

50021.0010,500

1/28/xx600

1/30/xx15022.003,300

Total65013,800600

SP20

FIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total					LIFO Periodic			LIFO Perpetual			FIFO Periodic			FIFO Perpetual			Weighted Average
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$		Sales			24,000	1.00		24,000	1.00		24,000	1.00		24,000	1.00		24,000	1.00
1/1xx								300	20.00	6,000		COGS
											300		Beg. Inventory	6,000			6,000			6,000			6,000			6,000
1/10/xx	500	21.00	10,500					300	20.00	6,000	650		Purchases	13,800			13,800			13,800			13,800			13,800
								500	21.00	10,500	950		Goods Av	19,800			19,800			19,800			19,800			19,800
											350		Ending Inventory	7,050			7,300			7,500			7,500			7,295
1/28/xx				600	300	20	6,000	200	21.00	4,200
					300	21	6,300				600	COGS			12,750	0.53		12,500	0.52		12,300	0.51		12,300	0.51		12,505	0.52
												Gross Margin			11,250	0.47		11,500	0.48		11,700	0.49		11,700	0.49		11,495	0.48
1/30/xx	150	22.00	3,300					200	21.00	4,200
								150	22.00	3,300			LIFO Periodic							FIFO Periodic						Weighted Average
Total	650		13,800	600	600		12,300	350		7,500			300	20.00	6,000					150	22.00	3,300				$ Goods Available		19,800
													50	21.00	1,050					200	21.00	4,200				# Goods Available		950
																										Cost/Unit		20.8421052632
													350		7,050					350		7,500				Units		350
																										Inventory		7,295
LIFO Perpetual
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
1/1xx								300	20.00	6,000
1/10/xx	500	21.00	10,500					300	20.00	6,000
								500	21.00	10,500
1/28/xx				600	500	21.00	10,500	200	20.00	4,000
					100	20.00	2,000
1/30/xx	150	22.00	3,300					200	20.00	4,000
								150	22.00	3,300
Total	650		13,800	600				350		7,300
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purch	Unit	Purch	Sold		Unit		Inventory	Unit	Inventory$
1/1xx								300	20.00	6,000
1/10/xx	500	21.00	10,500					300	20.00	6,000
								500	21.00	10,500
1/28/xx				600
1/30/xx	150	22.00	3,300
Total	650		13,800	600
										jkp
										JKP

FinalF19

Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total					LIFO Perpetual			LIFO Periodic			LIFO Perpetual			LIFO Periodic			FIFO Periodic
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$		Sales			15,000	1.00		15,000	1.00		15,000	1.00		15,000	1.00		15,000	1.00
1/1xx								300	10.00	3,000		COGS
											300		Beg. Inventory	3,000			3,000			3,000			3,000			3,000
1/10/xx	250	11.00	2,750					300	10.00	3,000	525		Purchases	6,050			6,050			6,050			6,050			6,750
								250	11.00	2,750	825		Goods Av	9,050			9,050			9,050			9,050			9,750
											225		Ending Inventory	2,300			2,250			0			2,250			2,250
1/28/xx				350	250	11	2,750	200	10.00	2,000
					100	10	1,000				600	COGS			6,750	0.45		6,800	0.45		6,750	0.45		6,800	0.45		7,500	0.50
												Gross Margin			8,250	0.55		8,200	0.55		8,250	0.55		8,200	0.55		7,500	0.50
1/30/xx	275	12.00	3,300					200	10.00	2,000
								275	12.00	3,300							LIFO Periodic						LIFO Periodic			FIFO Periodic
2/5/xx				250	250	12	3,000	200	10.00	2,000							225	10.00	2,250				225	10.00	2,250	225	12.00	2,700
								25	12.00	300
Total	525		6,050	600	600		6,750	225		2,300							Total		2,250				Total		2,250
LIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
1/1xx								300	10.00	3,000
1/10/xx	250	11.00	2,750
1/28/xx				350
1/30/xx	275	12.00	3,300
2/5/xx				250
Total	525		6,050	600
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
1/1xx								300	10.00	3,000
1/10/xx	250	11.00	2,750
1/28/xx				350
1/30/xx	275	12.00	3,300
2/5/xx				250
Total	525		6,050	600
										jkp

Example

	Year 1		Year 2		Year 3		Total
Sales		200,000		200,000		200,000		600,000	Sales			200,000		200,000
COGS:											Wrong
Beg. Inv	- 0		20,000		40,000		- 0		Cost of Goods Sold
Purchases	100,000		100,000		100,000		300,000			Beg. Inventory	10,000		20,000
Goods Available	100,000		120,000		140,000		300,000			Purchases	100,000		100,000
End. Inv.	20,000		40,000		- 0		- 0			Goods Available	110,000		120,000
COGS:		80,000		80,000		140,000		300,000		Ending Inventory	20,000		10,000
Gross Profit		120,000		120,000		60,000		300,000	Cost of Goods Sold			90,000		110,000
									Gross Profit			110,000		90,000	200,000
Sales		200,000		200,000		200,000		600,000			Correct
COGS:									Sales			200,000		200,000
Beg. Inv	- 0		25,000		45,000		- 0
Purchases	100,000		100,000		100,000		300,000		Cost of Goods Sold
Goods Available	100,000		125,000		145,000		300,000			Beg. Inventory	10,000		25,000
End. Inv.	25,000		45,000		- 0		- 0			Purchases	100,000		100,000
COGS:		75,000		80,000		145,000		300,000		Goods Available	110,000		125,000
Gross Profit		125,000		120,000		55,000		300,000		Ending Inventory	25,000		10,000
									Cost of Goods Sold			85,000		115,000
									Gross Profit			115,000		85,000	200,000

P6-1ABlank

FIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total				FIFO PERPETUAL			FIFO Periodic		LIFO PERPETUAL			LIFO Periodic			Weighted Average
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$	Sales			19,875,000	1.00		19,875,000	1.00	19,875,000	1.00		19,875,000	1.00		19,875,000	1.00
1/1xx								7,500	75.00	562,500	COGS
												Beg. Inventory
1/10/xx	22,500	85.00	1,912,500					7,500	75.00	562,500		Purchases
								22,500	85.00	1,912,500		Goods Av
												Ending Inventory
1/28/xx				11,250
											COGS
											Gross Margin
1/30/xx				3,750
																FIFO Periodic					LIFO Periodic			Weighted Average
2/5/xx				1,500
																		0					0	Goods Available		0
2/10/xx	54,000	87.50	4,725,000															0					0	Units Available		0
																Total		0			Total		0	Cost/Unit
2/16/xx				27,000																				Units
																								Inventory
2/28/xx				25,500
3/5/xx	45,000	89.50	4,027,500									Sales
												1/28/xx	11,250	150	1,687,500
												1/30/xx	3,750	150	562,500
3/14/xx				56,250								2/5/xx	1,500	150	225,000
												2/16/xx	27,000	160	4,320,000
												2/28/xx	25,500	160	4,080,000
3/25/xx	7,500	90.00	675,000									3/14/xx	56,250	160	9,000,000
Total	129,000		11,340,000	125,250	0		0	0		0		Total	125,250		19,875,000
LIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
1/1xx								7,500	75.00	562,500
1/10/xx	22,500	85.00	1,912,500					7,500	75.00	562,500
								22,500	85.00	1,912,500
1/28/xx				11,250
1/30/xx				3,750
2/5/xx				1,500
2/10/xx	54,000	87.50	4,725,000
2/16/xx				27,000
2/28/xx				25,500
3/5/xx	45,000	89.50	4,027,500
3/14/xx				56,250
3/25/xx	7,500	90.00	675,000
Total	129,000		11,340,000	125,250	0		0	0		0

InventoryExample

FIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total					FIFO PERPETUAL			FIFO Periodic			LIFO PERPETUAL			LIFO Periodic			Weighted Average
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$		Sales			19,875,000	1.00		19,875,000	1.00		19,875,000	1.00		19,875,000	1.00		19,875,000	1.00
1/1xx								7,500	75.00	562,500		COGS
											7,500		Beg. Inventory	562,500			562,500			562,500			562,500			562,500
1/10/xx	22,500	85.00	1,912,500							0	129,000		Purchases	11,340,000			11,340,000			11,340,000			11,340,000			11,340,000
										0	136,500		Goods Av	11,902,500			11,902,500			11,902,500			11,902,500			11,902,500
											0		Ending Inventory	0			1,010,625			0			881,250			0
1/28/xx (150)				11,250			0			0
							0				136,500	COGS			11,902,500	0.60		10,891,875	0.55		11,902,500	0.60		11,021,250	0.55		11,902,500	0.60
												Gross Margin			7,972,500	0.40		8,983,125	0.45		7,972,500	0.40		8,853,750	0.45		7,972,500	0.40
1/30/xx (150)				3,750						0
										0							FIFO Periodic						LIFO Periodic			Weighted Average
2/5/xx (150)				1,500
																	7,500	90.00	675,000				7,500	75.00	562,500	Goods Available		11,902,500
2/10/xx	54,000	87.50	4,725,000														3,750	89.50	335,625				3,750	85.00	318,750	Units Available		136,500
																	Total		1,010,625				Total		881,250	Cost/Unit		87.1978
2/16/xx (160)				27,000																						Units		0
																										Inventory		0
2/28/xx (160)				25,500
3/5/xx	45,000	89.50	4,027,500										Sales
													1/28/xx	11,250	150	1,687,500
													1/30/xx	3,750	150	562,500
3/14/xx (160)				56,250									2/5/xx	1,500	150	225,000
													2/16/xx	27,000	160	4,320,000
													2/28/xx	25,500	160	4,080,000
3/25/xx	7,500	90.00	675,000										3/14/xx	56,250	160	9,000,000
Total	129,000		11,340,000	125,250	0		0	0		0			Total	125,250		19,875,000
LIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
1/1xx								7,500	75.00	562,500
1/10/xx	22,500	85.00	1,912,500							0
										0
1/28/xx (150)				11,250			0			0
										0
1/30/xx (150)				3,750			0			0
										0
2/5/xx (150)				1,500			0			0
										0
2/10/xx	54,000	87.50	4,725,000							0
										0
										0
2/16/xx (160)				27,000			0			0
										0
										0
2/28/xx (160)				25,500			0			0
										0
										0
3/5/xx	45,000	89.50	4,027,500							0
										0
										0
										0
3/14/xx (160)				56,250			0			0
							0
							0
							0
3/25/xx	7,500	90.00	675,000							0
										0
Total	129,000		11,340,000	125,250	0		0	0		0

P6-1A

FIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total					FIFO PERPETUAL			FIFO Periodic			LIFO PERPETUAL			LIFO Periodic			Weighted Average
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$		Sales			19,875,000	1.00		19,875,000	1.00		19,875,000	1.00		19,875,000	1.00		19,875,000	1.00
1/1xx								7,500	75.00	562,500		COGS
											7,500		Beg. Inventory	562,500			562,500			562,500			562,500			562,500
1/10/xx	22,500	85.00	1,912,500					7,500	75.00	562,500	129,000		Purchases	11,340,000			11,340,000			11,340,000			11,340,000			11,340,000
								22,500	85.00	1,912,500	136,500		Goods Av	11,902,500			11,902,500			11,902,500			11,902,500			11,902,500
											11,250		Ending Inventory	1,010,625			1,010,625			956,250			881,250			980,975
1/28/xx				11,250	7,500	75.00	562,500	18,750	85.00	1,593,750
					3,750	85.00	318,750				125,250	COGS			10,891,875	0.55		10,891,875	0.55		10,946,250	0.55		11,021,250	0.55		10,921,525	0.55
												Gross Margin			8,983,125	0.45		8,983,125	0.45		8,928,750	0.45		8,853,750	0.45		8,953,475	0.45
1/30/xx				3,750	3,750	85.00	318,750	15,000	85.00	1,275,000
																	FIFO Periodic						LIFO Periodic			Weighted Average
2/5/xx				1,500	1,500	85.00	127,500	13,500	85.00	1,147,500			Sales
													1/28/xx	11,250	150	1,687,500	7,500	90.00	675,000				7,500	75.00	562,500	Goods Available		11,902,500
2/10/xx	54,000	87.50	4,725,000					13,500	85.00	1,147,500			1/30/xx	3,750	150	562,500	3,750	89.50	335,625				3,750	85.00	318,750	Units Available		136,500
								54,000	87.50	4,725,000			2/5/xx	1,500	150	225,000
													2/16/xx	27,000	160	4,320,000	Total		1,010,625				Total		881,250	Cost/Unit		87.1978
2/16/xx				27,000	13,500	85.00	1,147,500	40,500	87.50	3,543,750			2/28/xx	25,500	160	4,080,000										Units		11,250
					13,500	87.50	1,181,250						3/14/xx	56,250	160	9,000,000
													Total	125,250		19,875,000										Inventory		980,975
2/28/xx				25,500	25,500	87.50	2,231,250	15,000	87.50	1,312,500
3/5/xx	45,000	89.50	4,027,500					15,000	87.50	1,312,500
								45,000	89.50	4,027,500
3/14/xx				56,250	15,000	87.50	1,312,500	3,750	89.50	335,625
					41,250	89.50	3,691,875
3/25/xx	7,500	90.00	675,000					3,750	89.50	335,625
								7,500	90.00	675,000
Total	129,000		11,340,000	125,250	125,250		10,891,875	11,250		1,010,625
LIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
1/1xx								7,500	75.00	562,500
1/10/xx	22,500	85.00	1,912,500					7,500	75.00	562,500
								22,500	85.00	1,912,500
1/28/xx				11,250	11,250	85.00	956,250	7,500	75.00	562,500
								11,250	85.00	956,250
1/30/xx				3,750	3,750	85.00	318,750	7,500	75.00	562,500
								7,500	85.00	637,500
2/5/xx				1,500	1,500	85.00	127,500	7,500	75.00	562,500
								6,000	85.00	510,000
2/10/xx	54,000	87.50	4,725,000					7,500	75.00	562,500
								6,000	85.00	510,000
								54,000	87.50	4,725,000
2/16/xx				27,000	27,000	87.50	2,362,500	7,500	75.00	562,500
								6,000	85.00	510,000
								27,000	87.50	2,362,500
2/28/xx				25,500	25,500	87.50	2,231,250	7,500	75.00	562,500
								6,000	85.00	510,000
								1,500	87.50	131,250
3/5/xx	45,000	89.50	4,027,500					7,500	75.00	562,500
								6,000	85.00	510,000
								1,500	87.50	131,250
								45,000	89.50	4,027,500
3/14/xx				56,250	45,000	89.50	4,027,500	3,750	75.00	281,250
					1,500	87.50	131,250
					6,000	85.00	510,000
					3,750	75.00	281,250
3/25/xx	7,500	90.00	675,000					3,750	75.00	281,250
								7,500	90.00	675,000
Total	129,000		11,340,000	125,250	125,250		10,946,250	11,250		956,250

P6-7ABlank

What do you do first?

P6-7A

Sales		3,250,000
Sales Returns & Allowances
Net Sales		3,250,000
		Cost	Retail
Beg. Inventory		300,000	575,000	0.521739
Purchases		2,021,900	3,170,000	0.637823
Goods Available		2,321,900	3,745,000	0.620000
End. Inventory		306,900	495,000
COGS		2,015,000	3,250,000
Gross Profit		1,235,000
Sales		15,800,000
Sales Returns And Allowances
Net Sales		15,800,000	1.00
Beg. Inventory	880,000
Purchases	9,500,000
Goods Available	10,380,000
End. Inventory	584,000
COGS		9,796,000	0.62
Gross Profit		6,004,000	0.38
Cinder, Inc.
Income Statement
FYE xx/xx/xx
Sales		4,750,000
Sales Returns And Allowances
Net Sales		4,750,000	1.00
Beg. Inventory	400,000
Purchases	3,150,000
Goods Available	3,550,000
End. Inventory	700,000
COGS		2,850,000	0.60
Gross Profit		1,900,000	0.40

P6-1B Blank

FIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total					FIFO PERPETUAL			FIFO Periodic			LIFO PERPETUAL			LIFO Periodic			Weighted Average
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$		Sales			525,250	1.00		525,250	1.00		525,250	1.00		525,250	1.00		525,250	1.00
4/3/xx								25	1,200	30,000		COGS
											25		Beg. Inventory	30,000			30,000			30,000			30,000			30,000
4/8/xx	75	1,240	93,000								250		Purchases	313,640			313,640			313,640			313,640			313,640
											275		Goods Av	343,640			343,640			343,640			343,640			343,640
											26		Ending Inventory	0			32,864			0			31,240			32,490
4/11/xx				40
											249	COGS			343,640	0.65		310,776	0.59		343,640	0.65		312,400	0.59		311,150	0.59
												Gross Margin			181,610	0.35		214,474	0.41		181,610	0.35		212,850	0.41		214,100	0.41
4/30/xx				30
																	FIFO Periodic						LIFO Periodic			Weighted Average
5/8/xx	60	1,260	75,600
																	26	1,264	32,864				25	1,200	30,000	Goods Available		343,640
																							1	1,240	1,240	Units Available		275
5/10/xx				50
																	Total		32,864				Total		31,240	Cost/Unit		1,249.60
																										Units		26
5/19/xx				20																						Total Inventory Cost		32,490
5/28/xx	80	1,260	100,800
6/5/xx				40
6/16/xx				25
													Sales
6/21/xx	35	1,264	44,240										4/11/xx	40	2,000	80,000
													4/30/xx	30	2,000	60,000
													5/10/xx	50	2,000	100,000
6/28/xx				44									5/19/xx	20	2,000	40,000
													6/5/xx	40	2,250	90,000
													6/16/xx	25	2,250	56,250
													6/28/xx	44	2,250	99,000
													Total	249		525,250
Total	250		313,640	249	0		0	0		0
LIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
4/3/xx								25	1,200	30,000
4/8/xx	75	1,240	93,000
4/11/xx				40
4/30/xx				30
5/8/xx	60	1,260	75,600
5/10/xx				50
5/19/xx				20
5/28/xx	80	1,260	100,800
6/5/xx				40
6/16/xx				25
6/21/xx	35	1,264	44,240
6/28/xx				44
Total	250		313,640	249			0	0		0

P6-1B

FIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total					FIFO PERPETUAL			FIFO Periodic			LIFO PERPETUAL			LIFO Periodic			Weighted Average
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$		Sales			525,250	1.00		525,250	1.00		525,250	1.00		525,250	1.00		525,250	1.00
4/3/xx								25	1,200	30,000		COGS
											25		Beg. Inventory	30,000			30,000			30,000			30,000			30,000
4/8/xx	75	1,240	93,000					25	1,200	30,000	250		Purchases	313,640			313,640			313,640			313,640			313,640
								75	1,240	93,000	275		Goods Av	343,640			343,640			343,640			343,640			343,640
											26		Ending Inventory	32,864			32,864			31,560			31,240			32,490
4/11/xx				40	25	1,200	30,000	60	1,240	74,400
					15	1,240	18,600				249	COGS			310,776	0.59		310,776	0.59		312,080	0.59		312,400	0.59		311,150	0.59
												Gross Margin			214,474	0.41		214,474	0.41		213,170	0.41		212,850	0.41		214,100	0.41
4/30/xx				30	30	1,240	37,200	30	1,240	37,200
																	FIFO Periodic						LIFO Periodic			Weighted Average
5/8/xx	60	1,260	75,600					30	1,240	37,200
								60	1,260	75,600							26	1,264	32,864				25	1,200	30,000	Goods Available		343,640
																							1	1,240	1,240	Units Available		275
5/10/xx				50	30	1,240	37,200	40	1,260	50,400
					20	1,260	25,200										Total		32,864				Total		31,240	Cost/Unit		1,249.60
																										Units		26
5/19/xx				20	20	1,260	25,200	20	1,260	25,200																Total Inventory Cost		32,490
5/28/xx	80	1,260	100,800					20	1,260	25,200
								80	1,260	100,800
6/5/xx				40	20	1,260	25,200	60	1,260	75,600
					20	1,260	25,200
6/16/xx				25	25	1,260	31,500	35	1,260	44,100
													Sales
6/21/xx	35	1,264	44,240					35	1,260	44,100			4/11/xx	40	2,000	80,000
								35	1,264	44,240			4/30/xx	30	2,000	60,000
													5/10/xx	50	2,000	100,000
6/28/xx				44	35	1,260	44,100	26	1,264	32,864			5/19/xx	20	2,000	40,000
					9	1,264	11,376						6/5/xx	40	2,250	90,000
													6/16/xx	25	2,250	56,250
													6/28/xx	44	2,250	99,000
													Total	249		525,250
Total	250		313,640	249	249		310,776	26		32,864
LIFO PERPETUAL
Date	Units	Cost/	$	Units		Cost/	COGS	Units In	Cost/	Total
	Purchased	Unit	Purchased	Sold		Unit		Inventory	Unit	Inventory$
4/3/xx								25	1,200	30,000
4/8/xx	75	1,240	93,000					25	1,200	30,000
								75	1,240	93,000
4/11/xx				40	40	1,240	49,600	25	1,200	30,000
								35	1,240	43,400
4/30/xx				30	30	1,240	37,200	25	1,200	30,000
								5	1,240	6,200
5/8/xx	60	1,260	75,600					25	1,200	30,000
								5	1,240	6,200
								60	1,260	75,600
5/10/xx				50	50	1,260	63,000	25	1,200	30,000
								5	1,240	6,200
								10	1,260	12,600
5/19/xx				20	10	1,260	12,600	20	1,200	24,000
					5	1,240	6,200
					5	1,200	6,000
5/28/xx	80	1,260	100,800					20	1,200	24,000
								80	1,260	100,800
6/5/xx				40	40	1,260	50,400	20	1,200	24,000
								40	1,260	50,400
6/16/xx				25	25	1,260	31,500	20	1,200	24,000
								15	1,260	18,900
6/21/xx	35	1,264	44,240					20	1,200	24,000
								15	1,260	18,900
								35	1,264	44,240
6/28/xx				44	35	1,264	44,240	20	1,200	24,000
					9	1,260	11,340	6	1,260	7,560
Total	250		313,640	249			312,080	26		31,560

P6-7B

Sales		5,100,000
Sales Returns & Allowances
Net Sales		5,100,000
		Cost	Retail
Beg. Inventory		400,000	615,000	0.650407
Purchases		4,055,000	5,325,000	0.761502
Goods Available		4,455,000	5,940,000	0.750000
End. Inventory		630,000	840,000
COGS		3,825,000	5,100,000
Gross Profit		1,275,000
Sales		4,750,000
Sales Returns And Allowances
Net Sales		4,750,000	1.00
Beg. Inventory	400,000
Purchases	3,150,000
Goods Available	3,550,000
End. Inventory	462,500
COGS		3,087,500	0.65
Gross Profit		1,662,500	0.35
Estimated Inventory		462,500
Actual Physical Inventory		366,500
Estimated Inventory Loss		96,000