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Exercises

PureNext completed various merchandising transactions in September 2023, including purchases, sales, returns, and payments, while maintaining a perpetual inventory system. The income statement for the month shows a net income of $899, with total sales revenue of $4,000 and total operating expenses of $1,400. Eversoft Company analyzed its inventory using FIFO and Weighted-Average methods, concluding that FIFO would result in higher reported income compared to the Weighted-Average method.

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9 views5 pages

Exercises

PureNext completed various merchandising transactions in September 2023, including purchases, sales, returns, and payments, while maintaining a perpetual inventory system. The income statement for the month shows a net income of $899, with total sales revenue of $4,000 and total operating expenses of $1,400. Eversoft Company analyzed its inventory using FIFO and Weighted-Average methods, concluding that FIFO would result in higher reported income compared to the Weighted-Average method.

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k62.2312250112
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Question 1: PureNext completed the following merchandising transactions in the

month of Sep, 2023. At the beginning of Sep, 2023, the ledger of showed Cash of
$20,000 and Share Capital - Ordinary of $20,000.
Sep 1 Purchased merchandise on account from Creem Wholesale Supply $3,000,
terms 2/10, n/30. FOB destination. The appropriate party also made a cash
payment of $50 for the freight on this date. (cua ben ban hang, minh la mua
hang nen ko hach toan). DU LIEU THUA
FOB destination (seller phai tra tien van chuyen): Dr Inventory
Cr account payable

2 Sold merchandise on account to Blanco for $4,000, terms 2/10, n/30; FOB
destination. The cost of the merchandise sold was $1,500. The appropriate
party also made a cash payment of $100 for the freight on this date.
- Dr acc receivable
Cr revenue (4,000)
- Dr cost of goods sold
Cr delivery expense/ freight out (1,500)
- Dr freight out/ delivery expense
Cr cash (100)

5 Received credit from Creem’s Wholesale Supply for merchandise returned


$500. (PURCHASE RETURN)
- Cr inventory
Dr account payable (500)

7 Granted Blanco $200 credit for merchandise returned costing $75. (minh bi
tra lai hang ban)
- Dr sales return and allowance
Cr account receivable (200)
(chu y: ko ghi giam doanh thu va cash)
- Dr inventory
Cr cost of goods sold (75)
9 Paid Creem’s Wholesale Supply in full, less discount if any. (khi tra phai
xem no co o trong giai doan duoc huong chiet khau hay ko)
- Dr account payable (2.500)
Cr cash (2450)
Cr inventory (2% chiet khau) (50)

11 Received collections in full from Blanco, less discounts if any. (duoc huong
chiet khau)
- Dr sale discount (76)
Cr cash (3,724)
Cr account receivable (3,800)

13 Purchased merchandises from Erick Distributors $2,300, FOB shipping


point, terms 2/10, n/30. The appropriate party also made a cash payment of $50
for the freight on this date.(ben mua phai tre freight cost)
- Dr inventory (2300)
Cr account payable (2300)

- Dr freight in (tinh vao gia goc hang hoa, khong tinh vao chi phi)
Cr cash (50)
20 Paid $300 cash for utilities bill of Sep.
- Dr utilities expense
Cr cash (300)
(voi cac loai chi phi, phai chi ro ra do la chi phi gi)
24 Paid Erick Distributors in full, less discount if any. (ko dc huong chieu
khau)
- Dr account payable
Cr cash (2300)
25 Paid employees’ salaries and wages $1,000 cash
- Dr salary and wage expense
Cr cash (1000)

Instructions:
1. Journalize the transactions for the month of Sep, 2023 for PureNext using a
perpetual inventory system.
2. Prepare the Income statement for the month of Sep, 2023.
CLOSE ENTRIES
- Close REV
Dr revenue (4000)
Cr IS
- Close expense:
Cr cost of goods sold 1425
Cr freight out 100
Cr sales return and allowance 200
Cr sales discount 76
Cr utilities 300
Cr SW expense 1000
>> 3101
- Close net income
Cr returned earning
Dr IS 899
LAP INCOME STATEMENT (lay tu close entries)

Sales revenue 4000

Less:
sales return 200
sales discount 76

Net revenue 3724

Less
Cost of goods sold 1425

Gross profit 2299

Less operating expense


Freight out 100
Utilities expense 300
SW expense 1000

TOTAL operating expense 1400


TOTAL income 899

Question 2: Eversoft Company uses the periodic inventory method and had the
following inventory information available:

Units Unit cost Total cost


Jan 1 Beginning 100 30 3,000
inventory
Feb 20 Purchase 400 32 12,800
Jul 25 Purchase 200 35 7,000
Oct 20 Purchase 300 38 11,400
1000 40 34,200

A physical count of inventory on December 31, 2022 revealed that there were 400
units on hand.
>> cuoi ki con 400
Instructions: Answer the following independent questions and show computations
supporting your answers.
1. Compute the ending inventory and Cost of goods sold at Dec 31 using FIFO
methods.
- FIFO: ENDING INVENTORY= 300*38+ 100*35= 14900
- COST OF GOODS SOLD: 34200 – 14900= 19300
-
2. Compute the ending inventory and Cost of goods sold at Dec 31 using the
Weighted - Average cost methods. (periodic)
- Average unit cost: 34200/1000=34,2
- Ending: 34,2*400
- Cost of goods sold: 34,2*600
3. Determine the difference in the amount of income that the company would
have reported if it had used the FIFO method instead of the Weighted -
Average cost method. Would income have been greater or less?
- FIFO: INCOME GREATER: 20520-19300=? (phai chi ra no lon hon bao
nhieu)

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