AC 302 CHAPTER 8 QUESTION AND PROBLEMS
Exercise 8 QUESTION 2
Name Date
Instructor Course
Intermediate Accounting 14th Edition by Kieso Wetland and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E8-2 (Inventoriable Costs) In your audit of Garza Company, you find that a physical inventory on
December 31, 2012, showed merchandise with a cost of $441,000 was on hand at that date.
You also discover the following items were all excluded from the $441,000
1. Merchandise of $61,000 which is held by Garza on consignment. The consignor is
the Bontemps Company.
2. Merchandise costing $33,000 which was shipped by Garza f.o.b. destination to a
customer on December 31, 2012. The customer was expected to receive the merchandise on
January 6, 2013.
3. Merchandise costing $46,000 which was shipped by Garza f.o.b. shipping point to a
customer on December 29, 2012. The customer was scheduled to receive the merchandise on
January 2, 2013.
4. Merchandise costing $73,000 shipped by a vendor f.o.b. destination on
December 30, 2012, and received by Garza on January 4, 2013.
5. Merchandise costing $51,000 shipped by a vendor f.o.b. seller on December 31, 2012
and received by Garza on January 5, 2013.
Instructions:
Based on the above information, calculate the amount that should appear on Garza- balance sheet at December 31, 2012, for inventory.
Text Title Amount
Text Title Amount
Text Title Amount
Text Title Formula
Enter text explain as desire here.
Enter text explain as desire here.
Enter text explain as desire here.
Exercise 8-9
Name: Date:
Instructor: Course:
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E8-9 (Periodic versus Perpetual Entries) Chippewas Company sells one product. Presented below is information for January for Chippewas Company.
Jan 1 Inventory 100 units at $6.00 each
Jan 4 Sale 80 units at $8.00 each
Jan 11 Purchase 150 units at $6.50 each
Jan 13 Sale 120 units at $8.75 each
Jan 20 Purchase 160 units at $7.00 each
Jan 27 Sale 100 units at $9.00 each
Chippewas uses the FIFO cost flow assumption. All purchases and sales are on account.
Instructions:
"(a) Assume Chippewas uses a periodic system. Prepare all necessary journal entries, including
the end-of-month closing entry to record cost of goods sold. A physical count indicates that the"
ending inventory for January is 110 units.
Jan 4 Account Title Amount
Account Title Amount
Jan 11 Account Title 900 Amount
Account Title 900 Amount
Jan 13 Account Title 900 Amount
Account Title 900 Amount
Jan 20 Account Title 900 Amount
Account Title 900 Amount
Jan 27 Account Title 900 Amount
Account Title 900 Amount
Jan 31 Text Title Amount
Text Title
Amount
Text Title Amount
Text Title Amount
(b) Compute the gross profit using the periodic system.
Text Title Amount
Text Title Amount
Text Title Formula
(c) Assume Chippewas uses a perpetual system. Prepare all necessary journal entries.
Jan 4 Account Title Amount
Account Title Amount
Account Title 900 Amount
Account Title 900 Amount
Jan 11 Account Title 900 Amount
Account Title 900 Amount
Jan 13 Account Title Amount
Account Title Amount
Account Title 900 Amount
Account Title 900 Amount
Jan 20 Account Title 900 Amount
Account Title 900 Amount
Jan 27 Account Title Amount
Account Title Amount
Account Title 900 Amount
Account Title 900 Amount
(d) Compute the gross profit using the perpetual system.
Text Title Amount
Text Title Amount
Text Title Formula
Problem 8-3
Name: Date:
Instructor: Course:
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P8-3 (Purchases Recorded Gross and Net) Some of the transactions of Torres Company during August are listed below. Torres uses the periodic inventory method.
Aug 10 Purchased merchandise on account, terms 2/10, n/30 $12,000
Aug 13 Returned part of the purchase of Aug 10, and received credit on acct $1,200
Aug 15 Purchased merchandise on account, terms 1/10, n/60 $16,000
Aug 25 Purchased merchandise on account, terms 2/10, n/30 $20,000
Aug 28 Paid invoice of August 15 in full.
Instructions:
"(a) Assuming that purchases are recorded at gross amounts and that discounts are to be recorded
when taken:"
(1) Prepare general journal entries to record the transactions.
Aug 10 Account Title Amount
Account Title Amount
Aug 13 Account Title Amount
Account Title Amount
Aug 15 Account Title Amount
Account Title Amount
Aug 25 Account Title Amount
Account Title Amount
Aug 28 Account Title Amount
Account Title Amount
(2) Describe how the various items would be shown in the financial statements.
Enter text answer here.
Enter text answer here.
Enter text answer here.
"(b) Assuming that purchases are recorded at net amounts and that discounts lost are treated as
finance expenses:"
(1) Prepare general journal entries to record the transactions.
Aug 10 Account Title Amount
Account Title Amount
Aug 13 Account Title Amount
Account Title Amount
Aug 15 Account Title Amount
Account Title Amount
Aug 25 Account Title Amount
Account Title Amount
Aug 28 Account Title Amount
Account Title Amount
Account Title Amount
" (2) Prepare the adjusting entry necessary on August 31 if financial statements are to be prepared
at that time."
Aug 31 Account Title Amount
Account Title Amount
(3) Describe how the various items would be shown in the financial statements.
Enter text answer here.
(c) Which of the two methods do you prefer and why?
Enter text answer here.
Problem 8-4
Name: Date:
Instructor: Course:
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P8-4 (Compute FIFO, LIFO, and Average Cost) Hull Company- record of transactions concerning part X for the month of April was as follows.
Purchases Sales
Quantity: Unit Cost: Quantity:
Apr 1 (Balance on hand) 100 $5.00 Apr 5 300
Apr 4 400 5.10 Apr 12 200
Apr 11 300 5.30 Apr 27 800
Apr 18 200 5.35 Apr 28 150
Apr 26 600 5.60
Apr 30 200 5.80
Instructions:
(a) Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. Carry unit costs to the nearest cent.
Purchases Sales
Dates and Units Unit Cost Dates and Units
April 1 (balance on hand) Quantity Amount Apr 5 Quantity
Apr 4 Quantity Amount Apr 12 Quantity
Apr 11 Quantity Amount Apr 27 Quantity
Apr 18 Quantity Amount Apr 28 Quantity
Apr 26 Quantity Amount Total units Formula
Apr 30 Quantity Amount
Total units Formula
Total units sold Quantity
Total units (ending inventory) Formula
(1) First-in, First-out, (FIFO). (Assuming costs are not computed for each withdrawal - Perpetual.)
Date of Invoice No. Units Unit Cost Total Cost
Apr 30 Quantity Amount Formula
Apr 26 Quantity Amount Formula
Value of ending inventory, FIFO, Periodic valuation: Formula
(2) Last-in, First-out, (LIFO). (Assuming costs are not computed for each withdrawal - Perpetual.)
Date of Invoice No. Units Unit Cost Total Cost
Apr 1 Quantity Amount Formula
Apr 4 Quantity Amount Formula
Value of ending inventory, LIFO, Periodic valuation: Formula
(3) Average cost.
Date of Invoice No. Units Unit Cost Total Cost
Apr 1 Quantity Amount Formula
Apr 4 Quantity Amount Formula
Apr 11 Quantity Amount Formula
Apr 18 Quantity Amount Formula
Apr 26 Quantity Amount Formula
Apr 30 Quantity Amount Formula
Total Available Formula Formula
Average cost per unit: Amount
Units in ending inventory: Quantity
Ending valuation of inventory, average cost method Formula
"(b) If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would
be shown as ending inventory in 1, 2, and 3 above? Carry average unit costs to four decimal places."
(1) First-in, First-out, (FIFO). (Assuming costs are computed for each withdrawal - Perpetual.)
Enter text answer here as required.
(2) Last-in, First-out, (LIFO). (Assuming costs are computed for each withdrawal - Perpetual.)
The area within gray highlighting should contain sales details.
Date "Purchased
No. of units" Unit cost "Sold
No. of units" "Event
Detail" Unit cost "Balance*
No. of units" Unit cost Amount
Apr 1 100 $5.00 100 $5.00 $500.00
Apr 4
Balance
Apr 5
Balance
Apr 11
Balance
Apr 12
Balance
Apr 18
Balance
Apr 26
Balance
Apr 27
Balance
Apr 28
Balance
Apr 30
Balance
Enter text answer here as appropriate
(3) Average Cost. (Perpetual.)
The area within gray highlighting should contain sales details.
Date "Purchased
No. of units" Unit cost "Sold
No. of units" Unit cost "Balance
No. of units" Unit cost* "Ext'd Inv
Valuation"
Apr 1 100 $5.0000 100 $5.0000 $500.00
Apr 4
Balance
Apr 5
Balance
Apr 11
Balance
Apr 12
Balance
Apr 18
Balance
Apr 26
Balance
Apr 27
Balance
Apr 28
Balance
Apr 30
Balance
Slight differences in values are due to significant digit rounding.
Enter text answer here as appropriate.
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