Question
In: Accounting
purchases and Sales of Merchandise, Cash Flows Pedal City, a bike shop, opened for business on...
purchases and Sales of Merchandise, Cash Flows
Pedal City, a bike shop, opened for business on April 1. It uses a periodic inventory system. The following transactions occurred during the first month of business:
Required:
For all accounting equations, if a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter "0". If the effect is negative, use the minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item.
1. Identify and analyze each of the following transactions of Pedal City.
April 1: Purchased five units from Giorgio, Inc. for $600 total, with terms 3/10, n/30, FOB destination.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
| No Entry | Accounts Payable | No Entry | Purchases | |||||||||||
April 10: Paid for the April 1 purchase.
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
| Cash | Accounts Payable | No Entry | No Entry | |||||||||||
April 15: Sold one unit for $200 cash.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
| Cash | No Entry | Sales Revenue | No Entry | |||||||||||
April 18: Purchased ten units from Bush Enterprises for $900 total, with terms 3/10, n/30, FOB destination.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
| No Entry | Accounts Payable | No Entry | Purchases | |||||||||||
April 25: Sold three units for $200 each, cash.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
| Cash | No Entry | Sales Revenue | No Entry | |||||||||||
April 28: Paid for the April 18 purchase.
| Activity | Operating |
| Accounts | Cash Decrease, Account Payable DecreaseCash Decrease, Account Payable Decrease |
| Statement(s) | Balance Sheet only |
Feedback
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
| Cash | Accounts Payable | No Entry | No Entry | |||||||||||
2. Determine net income for the month of April.
Pedal City incurred and paid $100 for rent and $50 for
miscellaneous expenses during April. Ending inventory is $967.
(Ignore income taxes.)
$
3. Assuming that these are the only
transactions during April (including rent and miscellaneous
expenses), compute net cash flow from operating activities. Use the
minus sign to indicate cash out flows, a decrease in cash or cash
payments.
$
4. Cash outflow during the first month of business is much larger than expenses as shown on the income statement due to
Solutions
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The following information is available with respect to the purchases and sales of merchandise during the...
The following information is available with respect to the
purchases and sales of merchandise during the first part of January
2019:
Jan. 1
opening inventory
3,000 units at $25.00
each
Jan.
10
purchased
4,500 units at $35.00 each
Jan.
12
sold
3,500 units
Jan.
15
purchased
1,000 units at $32.50 each
Jan. 21
sold
1,500 units
Required:
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The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Dunne Co. and data on
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follows:
Date
Transaction
Number
of Units
Per Unit
Total
Apr. 3
Inventory
84
$375
$31,500
8
Purchase
168
450
75,600
11
Sale
113
1,250
141,250
30
Sale
71
1,250
88,750
May 8
Purchase
140
500
70,000
10
Sale
84
1,250
105,000
19
Sale
42
1,250
52,500
28
Purchase
140
550
77,000
June 5
Sale
84
1,315
110,460...
The following information is available with respect to the purchases and sales of merchandise during the...
The following information is available with respect to the
purchases and sales of merchandise during the first part of January
2019:
Jan. 1
opening inventory
3,000 units at $25.00
each
Jan.
10
purchased
4,500 units at $35.00 each
Jan.
12
sold
3,500 units
Jan.
15
purchased
1,000 units at $32.50 each
Jan. 21
sold
1,500 units
Required:
Calculate the Cost of Goods Sold and Ending Inventory using
FIFO and Moving Weighted Average Cost using the...
The beginning inventory of merchandise at Rhodes Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Rhodes Co. and data on
purchases and sales for a three-month period ending June 30 are as
follows:
Date
Transaction
Number
of Units
Per Unit
Total
Apr. 3
Inventory
60
$375
$22,500
8
Purchase
120
450
54,000
11
Sale
80
1,250
100,000
30
Sale
50
1,250
62,500
May 8
Purchase
100
500
50,000
10
Sale
60
1,250
75,000
19
Sale
30
1,250
37,500
28
Purchase
100
550
55,000
June 5
Sale
60
1,315
78,900...
The beginning inventory of merchandise at Rhodes Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Rhodes Co. and data on
purchases and sales for a three-month period ending June 30 are as
follows:
Date
Transaction
Number
of Units
Per
Unit
Total
Apr. 3
Inventory
90
$600
$54,000
8
Purchase
180
720
129,600
11
Sale
120
2,000
240,000
30
Sale
75
2,000
150,000
May 8
Purchase
150
800
120,000
10
Sale
90
2,000
180,000
19
Sale
45
2,000
90,000
28
Purchase
150
880
132,000
June 5
Sale
90
2,100
189,000...
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Dunne Co. and data on
purchases and sales for a three-month period ending June 30 are as
follows:
Date
Transaction
Number
of Units
Per
Unit
Total
Apr. 3
Inventory
25
$1,200
$30,000
8
Purchase
75
1,240
93,000
11
Sale
40
2,000
80,000
30
Sale
30
2,000
60,000
May 8
Purchase
60
1,260
75,600
10
Sale
50
2,000
100,000
19
Sale
20
2,000
40,000
28
Purchase
80
1,260
100,800
June 5
Sale
40
2,250
90,000...
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Dunne Co. and data on
purchases and sales for a three-month period ending June 30, 2016,
are as follows:
Date
Transaction
Number of Units
Per Unit
Total
Apr.
3
Inventory
25
$1,200
$30,000
8
Purchase
75
1,240
93,000
11
Sale
40
2,000
80,000
30
Sale
30
2,000
60,000
May
8
Purchase
60
1,260
75,600
10
Sale
50
2,000
100,000
19
Sale
20
2,000
40,000
28
Purchase
80
1,260
100,800
June
5
Sale
40
2,250...
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a...
The beginning
inventory of merchandise at Dunne Co. and data on purchases and
sales for a three-month period ending June 30 are as follows:
Date
Transaction
Number
of Units
Per Unit
Total
Apr. 3
Inventory
72
$225
$16,200
8
Purchase
144
270
38,880
11
Sale
96
750
72,000
30
Sale
60
750
45,000
May 8
Purchase
120
300
36,000
10
Sale
72
750
54,000
19
Sale
36
750
27,000
28
Purchase
120
330
39,600
June 5
Sale
72
790
56,880...
The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for...
The beginning inventory of merchandise at Keats Office Supplies
and data on purchases and sales for a three-month period ending May
31, 2016, are as follows:
Date
Transaction
Number
of Units
Per Unit
Total
March 1
Inventory
84
$225
$18,900
10
Purchase
168
270
45,360
28
Sale
112
750
84,000
30
Sale
70
750
52,500
April 5
Purchase
140
300
42,000
10
Sale
84
750
63,000
16
Sale
42
750
31,500
28
Purchase
140
330
46,200
May 5
Sale
84...
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