Kimmel, Accounting, 6e three classes per week The cost of the fne European muxer

Question

Kimmel, Accounting, 6e three classes per week The cost of the fne European muxers is expected to increase. Natake has just negotiated new termwith Kinski that indude shipping costs in the negotiated purchase price (msxers wll be shipped FoB destination), but the supplier carnot gusrantee the envoice price. Natalie has decided to use a periodic invertory system and now must choose a cost flow the following transactions occur in Februsry to May 2018 reb. 2 Natalie buys two deluxe mixers on account from Kzinski Supply Co. for $1,150 (ss75 each), FoB destination, terms n/30. Natalie is busy establishing both divisions of her buasiness (cookie classes and mixer sales) and completing her business degree. Her goals for the next 11 months are to sell one mixer per month and to give tmo to invertory 16 She sells one deluxe mixer for $1,100 cash 25 She pays the amount owed to Kzinski. Mar. 2 She buys one deluxe mixer on account from Kzinski Supply Co. for $592, FOB destination, terms n/ 30 Agr. 1 She buys two deluxe mxers on account from Krenski Supply Co. for $1,172 (5586 each), FOB destination, terms iv3o May 4 She buys theee deluxe mixers on account from Kzsnsidh Supply Co. for $1,800 (5600 each), FoB destination, terms nv/so 30 Natale sells two deluxe mixers for a total of $2,200 cash 31 She pays the amount owed to Kainski 13 She sels three delase mixers for a total of $3,300 cash 30 Natalie pays the amount owed to Kzinsk 27 She sells one deluxe mxer for $1,100 cash. Do not indent maneally, Record journal entries in the order not amount is entered. Prepare journal entries for each of the transactions. (Credit accownt titles are automatically indented when 3/11/2018 oe

Explanation / Answer

02-Feb Purchase 1150 (575*2)             Accounts payable 1150 16-Feb Cash 1100             Sales 1100 25-Feb Accouts payable 1150             Cash 1150 02-Mar Purchase 592 (592*1)             Accounts payable 592 30-Mar Cash 2200             Sales 2200 31-Mar Accouts payable 592             Cash 592 01-Apr Purchase 1172 (586*2)             Accounts payable 1172 13-Apr Cash 3300             Sales 3300 30-Apr Accouts payable 1172             Cash 1172 04-May Purchase 1800 (600*3)             Accounts payable 1800 27-May Cash 1100             Sales 1100 31-May Inventory (Ending inventory) 2386 FIFO Cost of goods sold 4038              Purchases 4714              Inventory (beginning inventory) 1710 LIFO 31-May Inventory (Ending inventory) 2340 Cost of goods sold 4084              Purchases 4714              Inventory (beginning inventory) 1710 Average 31-May Inventory (Ending inventory) 2336 Cost of goods sold 4088              Purchases 4714              Inventory (beginning inventory) 1710 Units Per unit cost Total amount Beginning inventory 3 570 1710 02-Feb Purchases 2 575 1150 02-Mar Purchases 1 592 592 01-Apr Purchases 2 586 1172 04-May Purchases 3 600 1800 Cost of goods available for sale 11 584 6424 Units sold 7 Ending inventory 4 Ending inventory Units Per unit cost Total amount FIFO May 4 purchase 3 600 1800 Apr 1 purchase 1 586 586 4 2386 LIFO Beginning inventory 2 570 1140 May 4 purchase 2 600 1200 4 2340 Average cost 4 584 2336 FIFO LIFO Average cost Cost of goods available for sale 6424 6424 6424 Ending inventory 2386 2340 2336 Cost of goods sold 4038 4084 4088 Sales revenue 7700 7700 7700 Cost of goods sold 4038 4084 4088 Gross profit 3662 3616 3612 Gross profit rate 47.56% 46.96% 46.91%

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