Question

Shankar Company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 2 for $40,000. In addition to the cost of inventory, the company also pays$600 for freight charges associated with the purchase on the same day. Record the purchase of inventory on February 2, including the freight charges.

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accounting

Sandra's Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October.

DateTransactionsUnitsCost per UnitTotal CostOctober 1Beginning inventory6$900$5,400October 4Sale4  October 10Purchase59104,550October 13Sale3  October 20Purchase49203,680October 28Sale7  October 30Purchase79306,510    $20,140\begin{matrix} \text{Date} & \text{Transactions} & \text{Units} & \text{Cost per Unit} & \text{Total Cost}\\ \hline \text{October 1} & \text{Beginning inventory} & \text{6} & \text{$\$ 900$} & \text{$\$ 5,400$}\\ \text{October 4} & \text{Sale} & \text{4} & \text{ } & \text{ }\\ \text{October 10} & \text{Purchase} & \text{5} & \text{910} & \text{4,550}\\ \text{October 13} & \text{Sale} & \text{3} & \text{ } & \text{ }\\ \text{October 20} & \text{Purchase} & \text{4} & \text{920} & \text{3,680}\\ \text{October 28} & \text{Sale} & \text{7} & \text{ } & \text{ }\\ \text{October 30} & \text{Purchase} & \text{7} & \text{930} & \underline{6,510}\\ \text{ } & \text{ } & \text{ } & \text{ } & \underline{\underline{\$ 20,140}}\\ \end{matrix}

  1. Calculate ending inventory and cost of goods sold at October 31, using the specific identification method. The October 4 sale consists of purses from beginning inventory, the October 13 sale consists of one purse from beginning inventory and two purses from the October 10 purchase, and the October 28 sale consists of three purses from the October 10 purchase and four purses from the October 20 purchase. 2. Using FIFO, calculate ending inventory and cost of goods sold at October 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at October 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at October 31.
accounting

Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions.

1. January 1Issue 10,000 shares of common stock in exchange for $42,000 in cash.2. January 5Purchase land for $24,000. A note payable is signed for the full amount.3. January 9Purchase storage container equipment for $9,000 cash.4. January 12Hire three employees for $3,000 per month.5. January 18Receive cash of $13,000 in rental fees for the current month.6. January 23Purchase office supplies for $3,000 on account.7. January 31Pay employees $9,000 for the first month’s salaries.\begin{array}{ll} \text{1. January 1} & \text{Issue 10,000 shares of common stock in exchange for \$42,000 in cash.}\\ \text{2. January 5} & \text{Purchase land for \$24,000. A note payable is signed for the full amount.}\\ \text{3. January 9} & \text{Purchase storage container equipment for \$9,000 cash.}\\ \text{4. January 12} & \text{Hire three employees for \$3,000 per month.}\\ \text{5. January 18} & \text{Receive cash of \$13,000 in rental fees for the current month.}\\ \text{6. January 23} & \text{Purchase office supplies for \$3,000 on account.}\\ \text{7. January 31} & \text{Pay employees \$9,000 for the first month's salaries.}\\ \end{array}

Required: 1. Record each transaction. Green Wave uses the following accounts: Cash, Supplies, Land, Equipment, Common Stock, Accounts Payable, Notes Payable, Service Revenue, and Salaries Expense. 2. Post each transaction to T-accounts and compute the ending balance of each account. Since this is the first month of operations, all T-accounts have a beginning balance of zero. 3. After calculating the ending balance of each account, prepare a trial balance.

accounting

Tony and Suzie graduate from college in May 2018 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking. Upon developing a customer base, they'll hold their first adventure races. These races will involve four-person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering, and trail running. In the long run, they plan to sell outdoor gear and develop a ropes course for outdoor enthusiasts. On July 1, 2018, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 20,000 shares of common stock for 1each.Eachshareofstockrepresentsaunitofownership.TonyandSuziewillactascopresidentsofthecompany.ThefollowingbusinessactivitiesoccurduringJulyforGreatAdventures.1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following business activities occur during July for Great Adventures.

July 1Sell $10,000 of common stock to Suzie.  1Sell $10,000 of common stock to Tony.  1Purchase a one-year insurance policy for $4,800 ($400 per month) to cover  injuries to participants during outdoor clinics. 2Pay legal fees of $1,500 associated with incorporation. 4Purchase office supplies of $1,800 on account. 7Pay for advertising of $300 to a local newspaper for an upcoming mountain biking  clinic to be held on July 15. Attendees will be charged $50 the day of the clinic. 8Purchase 10 mountain bikes, paying $12,000 cash. 15On the day of the clinic, Great Adventures receives cash of $2,000 from  40 bikers. Tony conducts the mountain biking clinic. 22Because of the success of the first mountain biking clinic, Tony holds another   mountain biking clinic and the company receives $2,300. 24Pay for advertising of $700 to a local radio station for a kayaking clinic to be held  on August 10. Attendees can pay $100 in advance or $150 on the day of the clinic. 30Great Adventures receives cash of $4,000 in advance from 40 kayakers for the upcoming kayak clinic.\begin{matrix} \text{July } & \text{1} & \text{Sell \$10,000 of common stock to Suzie.} & \text{ }\\ \text{ } & \text{1} & \text{Sell \$10,000 of common stock to Tony.} & \text{ }\\ \text{ } & \text{1} & \text{Purchase a one-year insurance policy for \$4,800 (\$400 per month) to cover}\\ \text{ } & \text{ } & \text{injuries to participants during outdoor clinics.}\\ \text{ } & \text{2} & \text{Pay legal fees of \$1,500 associated with incorporation.}\\ \text{ } & \text{4} & \text{Purchase office supplies of \$1,800 on account.}\\ \text{ } & \text{7} & \text{Pay for advertising of \$300 to a local newspaper for an upcoming mountain biking}\\ \text{ } & \text{ } & \text{clinic to be held on July 15. Attendees will be charged \$50 the day of the clinic.}\\ \text{ } & \text{8} & \text{Purchase 10 mountain bikes, paying \$12,000 cash.}\\ \text{ } & \text{15} & \text{On the day of the clinic, Great Adventures receives cash of \$2,000 from}\\ \text{ } & \text{ } & \text{40 bikers. Tony conducts the mountain biking clinic.}\\ \text{ } & \text{22} & \text{Because of the success of the first mountain biking clinic, Tony holds another }\\ \text{ } & \text{ } & \text{mountain biking clinic and the company receives \$2,300.}\\ \text{ } & \text{24} & \text{Pay for advertising of \$700 to a local radio station for a kayaking clinic to be held}\\ \text{ } & \text{ } & \text{on August 10. Attendees can pay \$100 in advance or \$150 on the day of the clinic.}\\ \text{ } & \text{30} & \text{Great Adventures receives cash of \$4,000 in advance from 40 kayakers for the}\\ & \text{ } & \text{upcoming kayak clinic.}\\ \end{matrix}

$ 1. Record each transaction in July for Great Adventures. 2. Post each transaction to T-accounts. 3. Prepare a trial balance.

accounting

Consider the recorded transactions below.

 DebitCredit1. Accounts Receivable8,400 Service Revenue 8,4002. Supplies2,300 Accounts Payable 2,3003. Cash10,200 Accounts Receivable 10,2004. Advertising Expense1,000 Cash 1,0005. Accounts Payable3,700 Cash 3,7006. Cash1,100 Deferred Revenue 1,100\begin{array}{l} \text{ } & \text{Debit} & \text{Credit}\\ \text{1. Accounts Receivable} & \text{8,400} & \text{ }\\ \text{Service Revenue} & \text{ } & \text{8,400}\\ \text{2. Supplies} & \text{2,300} & \text{ }\\ \text{Accounts Payable} & \text{ } & \text{2,300}\\ \text{3. Cash} & \text{10,200} & \text{ }\\ \text{Accounts Receivable} & \text{ } & \text{10,200}\\ \text{4. Advertising Expense} & \text{1,000} & \text{ }\\ \text{Cash} & \text{ } & \text{1,000}\\ \text{5. Accounts Payable} & \text{3,700} & \text{ }\\ \text{Cash} & \text{ } & \text{3,700}\\ \text{6. Cash} & \text{1,100} & \text{ }\\ \text{Deferred Revenue} & \text{ } & \text{1,100}\\ \end{array}

Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before the transactions is: Cash, $3,400; Accounts Receivable,$4,200; Supplies, $400; Accounts Payable,$3,500; Deferred Revenue, $300. Service Revenue and Advertising Expense each have a beginning balance of zero.