In: Accounting
Costco Wholesale Corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at 582 locations across the U.S. as well as in Canada, the United Kingdom, Japan, Australia, South Korea, Taiwan, Mexico and Puerto Rico. As of its fiscal year-end 2010, Costco had approximately 60 million members. Selected fiscal-year information from the company's balance sheets follows. ($ millions).
Selected Balance Sheet Data ($ millions) |
2010 | 2009 |
---|---|---|
Merchandise inventories | $5,638 | $5,405 |
Deferred membership income (liability) | 869 | 824 |
(a) During fiscal 2010, Costco collected $1,736 cash for membership
fees. Use the financial statement effects template to record the
cash collected for membership fees.
(b) In 2010, Costco recorded $67,995 million in merchandise costs
(that is, cost of goods sold). Record this transaction in the
financial statement effects template.
(c) Determine the value of merchandise that Costco purchased during
fiscal-year 2010. Use the financial statement effects template to
record these merchandise purchases. Assume all of Costco's
purchases are on credit.
Use negative signs with your answers, when appropriate. Enter answers in millions.
Balance Sheet |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Transaction | Cash Asset |
+ | Noncash Assets |
= | Liabilities | + |
Contributed Capital |
+ | Earned Capital |
|
(a) | Answer | Answer | Answer | Answer | Answer | |||||
(b) | Answer | Answer | Answer | Answer | Answer | |||||
(c) | Answer | Answer | Answer | Answer | Answer |
Income Statement |
||||
---|---|---|---|---|
Revenue |
- |
Expenses |
= |
Net Income |
Answer | Answer | Answer | ||
Answer | Answer | Answer | ||
Answer | Answer | Answer |
please answer all parts that say answer
Beginning balance of Deferred
membership income $ 824 millions
Add: Cash collected during the year $ 1736 millions
Less: Ending balance $ 869 millions
Membership Income considered as revenues for 2010 = 824 + 1736 –
869 = $ 1,691 millions
Cost of Goods Sold = $ 67,995
millions
This would have decreased Inventories balance appearing for 2009
and its effect had been included in 2010 Inventories balance as
Inventories account gets credited by the amount of cost of goods
sold.
Inventories balance (2009) + Purchases
– Inventories balance (2010) = Cost Of Goods Sold
$ 5,405 millions + Purchases - $ 5,638 = $ 67,995
5405 + Purchases – 5638 = 67995
Purchases = 67995 + 5638 – 5405
Purchases = $ 68,228
Balance Sheet |
Income Statement |
|||||||
Transaction |
Cash Asset |
Noncash |
Liabilities |
Contrib. |
Earned |
Revenues |
Expenses |
Net income |
Assets |
Capital |
Capital |
||||||
a |
$ 1,736.00 |
$ - |
$ 1,736.00 |
$ - |
$ - |
$ - |
$ - |
$ - |
b |
$ - |
$ (67,995.00) |
$ - |
$ - |
$ (67,995.00) |
$ - |
$ 67,995.00 |
$ (67,995.00) |
c |
$ - |
$ 68,228.00 |
$ 68,228.00 |
$ - |
$ - |
$ - |
$ - |
$ - |