Question

1) Modern Décor Furniture began June with merchandise inventory of 40 sofas that cost a total of $28,000. During the month, Modern Décor purchased and sold merchandise on account as follows:  

June 7	Purchase	30 sofas @ $700 each
14	Sale	30 sofas @ 1,100each
18	Purchase	50 sofas @ $750 each
27	Sale	40 sofas @ $1,150each

Prepare a perpetual inventory record, using the LIFO inventory costing method, and determine the company's cost of goods sold (COGS), ending merchandise inventory, and gross profit. (20pts)

   

Date	Purchase			Cost of Goods Sold			Inventory On Hand
	Cost	Number	Total	Cost	Number	Total	Cost	Number	Total

2) Taco Hell Inc. had the following balances and transactions during 2017:

Beginning Merchandise Inventory	30 units at $80
March 10	Sold 25 units
June 10	Purchased 40 units at $87
October 30	Sold 30 units

What is the amount of the company's Merchandise Inventory and COGS, as disclosed in the December 31, 2017 balance sheet, using the periodic FIFO inventory costing method? (10pts)

3) Magras Gas uses a perpetual inventory system. Journalize the following sales transactions. (20pts)

June 10	Sold $15,000 of merchandise on account, credit terms are 3/10, n/30. Cost of goods is $8,000.
June 14	Received a $600 sales return from the customer. Cost of the goods is $550.
June 23	Magras Gas receives payment for the customer for the amount due from the June 10 sale.

Date	Transaction	Debit	Credit

Answer 1

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Due to character limit I am attaching the image of first two questions.

	Magras Gas
	Perpetual method
Date	Account	Debit $	Credit $	Note
10-Jun	Accounts Receivable	15,000.00
	Sales		15,000.00
10-Jun	Cost of goods sold	8,000.00
	Merchandise Inventory		8,000.00
14-Jun	Sales	600.00
	Accounts Receivable		600.00
14-Jun	Merchandise Inventory	550.00
	Cost of goods sold		550.00
23-Jun	Cash	14,400.00		This is ($ 15,000- $ 600).
	Accounts Receivable		14,400.00