periodic inventory system for purchase

Problem-1

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 $2,500 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 compound General Journal entry (without explanation) for the payment for merchandise on May 12. If no entry is required then write “No Entry Required.”

Problem-2

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 General Journal entries (without explanation) for May 2 & May 3 entries. If no entry is required then write “No Entry Required.”

Problem-3

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.”

Problem-4

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.”

Problem-5

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 $2,700 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 General Journal entries (without explanation) for May 2 & May 3 entries. If no entry is required then write “No Entry Required.”

Problem-6

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 compound General Journal entry (without explanation) for the payment for merchandise on May 15. If no entry is required then write “No Entry Required.”

Problem-7

Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2016:

Date ActivityQuantityUnit 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

Problem-8

Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2016:

Date ActivityQuantity Unit Price
5/1 Beginning Inventory 175 $10
5/5 Purchase 200 $12
5/15 Purchase 300 $15
5/25 Purchase 150 $16

Sales were 545 units at $25.  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

Problem-9

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 ActivityQuantity Unit Price
May 1 Beginning Inventory 100 $10.10
May 5 Purchase 200 $11.00
May 15 Purchase 300 $13.00
May 25 Purchase 150 $15.00

Sales were 500 units at $20.00.  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

Problem-10

The following is a partial Adjusted Trial Balance for Alpha Company for the month:

Alpha Company
Adjusted Trial Balance (partial)
January 31, 2016
Accounts Debit Credit
Inventory $2,750
Sales $11,500
Sales Discounts 200
Sales Returns & Allowances 1,200
Purchases 4,000
Purchases Discounts 150
Purchase Returns & Allowances 450
Freight In 50
Advertising Expense 150
Depreciation Expense 130
Freight Out 70
Income Tax Expense 500
Salaries Expense 550
Utilities Expense 100

The following is a partial Adjusted Trial Balance for Alpha Company for the month:

Additionally, Inventory for December 31, 2015 was $2,600. Prepare a multiple-step income statement.

What amount should Alpha Company report on a Multi-Step Income Statement for the following items

  • Net Sales
  • Cost of Goods Available for Sales
  • Gross Profit
  • General & Administrative Expenses
  • Income before Taxes

Problem-11

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.

Problem-12

The following are selected account balances for Charlie Company’s operations for the FY ended December 31, 2016. (All balances are normal):

Accounts Amount
Net Sales $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 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%)

Problem-13

The following are selected account balances for Charlie Company’s operations for the FY ended December 31, 2016. (All balances are normal):

Accounts Amount
Net Sales $110,750
Administrative Expenses 22,000
Selling Expenses 12,000
Cost of Goods Sold 52,500
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%)

Problem-14

Alpha Company
December 31
Accounts 2016 2015
Merchandise Inventory $1,200,000 $800,000
Office Supplies 25,000 20,000
Sales 3,000,000 2,500,000
Cost of Goods Sold 2,750,000 1,600,000
Freight Out 15,000 10,000

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