1. from the adjusted trial balance for worker products company given

1. From the adjusted trial balance for Worker Products Company given below, prepare a multiple-step income statement in good form.

  

Worker Products Company

Adjusted Trial Balance

December 31

 

                  DebitCredit

Cash         $9,400

Accounts receivable25,000

Merchandise inventory  36,000

Office supplies             900

Store equipment 75,000

Accumulated depreciation – store equipment   $22,000

Office equipment   60,000

Accumulated depreciation -office equipment   15,000

Accounts payable   42,000

Notes payable    10,000

F. Worker, Capital           110,700

F. Worker, Withdrawals  48,000

Sales                          325,000

Sales discounts     6,000

Sales returns and allowances 16,500

Cost of goods sold   195,000

Sales salaries expense  32,500

Depreciation expense – store equipment  11,000

Depreciation expense – office equipment   7,500

Office supplies expense  1,300

Interest expense       600

Totals                $524,700    $524,700

 

 

2. From the adjusted trial balance for Worker Products Company given below, prepare the necessary closing entries. 

 

Worker Products Company

Adjusted Trial Balance

December 31

 

                            Debit       Credit

 

Cash$             9,400

Accounts receivable   25,000

Merchandise inventory  36,000

Office supplies      900

Store equipment  75,000

Accumulated depreciation – store equipment  $22,000

Office equipment   60,000

Accumulated depreciation -office equipment   15,000

Accounts payable   42,000

Notes payable   10,000

F. Worker, Capital   110,700

F. Worker, Withdrawals    48,000

Sales     325,000

Sales discounts    6,000

Sales returns and allowances   16,500

Cost of goods sold   195,000

Sales salaries expense     32,500

Depreciation expense – store equipment   11,000

Depreciation expense – office equipment     7,500

Office supplies expense   1,300

Interest expense    600

Totals              $524,700       $524,700

 

 

3.  A company made the following merchandise purchases and sales during the month of May: 

 

May 1  Purchased  380 units at$15 each    

May 5  Purchased  270 units at$17 each

May 10  Sold400 units at  $50 each

May 20  Purchased  300 units at  $22 each

May 25  Sold  400 units at $50 each

 

There was no beginning inventory. If the company uses the LIFO periodic inventory method, what would be the cost of the ending inventory? 

 

4. A company made the following merchandise purchases and sales during the month of May:  

May 1   Purchased   380 units at  $15 each

May 5   Purchased   270 units at $17 each

May 10  Sold 400 units at $50 each

May 20 Purchased 300 units at $22 each

May 25 Sold 400 units at $50 each

 

There was no beginning inventory. If the company uses the FIFO periodic inventory method, what would be the cost of the ending inventory? 

 

5. Flaxco purchases inventory from overseas and incurs the following costs: the cost of the merchandise is $50,000, credit terms are 2/10, n/30 that apply only to the $50,000; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000. Flaxco paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions. Compute the cost that should be assigned to the inventory.

 

A. $50,000

B. $53,000

C. $52,000

D. $51,500

E. $53,200

 

6. A company had inventory of 10 units at a cost of $20 each on November 1. On November 2, it purchased 10 units at $22 each. On November 6 it purchased 6 units at $25 each. On November 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold? 

A. $470

B. $490

C. $450

D. $570

E. $520

 

7. Perch Company reported the following purchases and sales for its only product. Perch uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.

 

Date      Activities           Units Acquired    at Cost    Units Sold at Retail

May 1  Beginning Inventory150 units @ $10.00

      5   Purchase220 units @ $12.00

    10   Sales140 units @ $20.00

    15   Purchase100 units @ $13.00

    24  Sales150 units @ $21.00

 

A. $2,260 

B. $3,180

C. $1,860 

D. $3,580

E. $2,100

 

 

8. Perch Company reported the following purchases and sales for its only product. Perch uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO.

 

Date             Activities              Units Acquired at Cost      Units Sold at Retail

May 1   Beginning Inventory  150 units @ $10.00

        5  Purchase  220 units @ $12.00

      10  Sales  140 units @ $20.00

      15  Purchase 100 units @ $13.00

      24  Sales  150 units @ $21.00

A. $2,260 

B. $3,180

C. $1,860 

D. $3,580

E. $2,100

 

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