For Your Business Tutor

Chapter 8 assignments

E 8-11

E 8-11

	Belinda Santos
Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2013. The units have a list price of $500 each,
but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30 Thomas uses a periodic inventory system.
		Required:
1. Prepare the journal entries to record the purchase by Thomas on November 17 and payment on November 26, 2013, using the gross method of accounting
for purchase disounts.
2. Prepare the journal entry to record the payment on December 15, 2013,using the gross method of accounting for purchase discounts.
3. Repeat requirements 1 and 2 using the net method of accounting for purchase discounts.

p 8-1

Belinda Santos

Required:

P 8-1

James Company began the month of October with inventory of $15,000. The following inventory transactions occurred during the month:

a. The company purchased merchandise on account for $22,000 on October 12, 2013. Terms of the purchase were 2/10, n/30. James uses the

net method to record purchases. The merchandise was shipped f.o.b. shipping point and freight charges of $500 were paid in cash.

b. On October 18 the company returned merchandise costing $3,000. The return reduced the amount owed to the supplier. The merchandise

returned came from beginning inventory, not from the October 12 purchase.

c. On October 31, James paid for the merchandise purchased on October 12.

d. During October merchandise costing $18,000 was sold on account for $28,000.

e. It was determined that inventory on hand at the end of October cost $16,060

1. Assuming that the James Company uses a periodic inventory system, prepare journal entries for the above transactions including the adjusting entry

at the end of October to record cost of goods sold.

2. Assuning that the James Company uses a perpetual inventory system, prepare journal entries for the above transactions.

E 8-22

Required:

Belinda Santos

P 8-22

On January 1,2013, the Haskins Company adopted the dollar value LIFO method for its one inventory pool. The pools value on this date was $ 660,000.

The 2013 and 2014 ending inventory valued at year end costs were $690,000 and $760,000, respectively. The appropriate cost indexes are 1.04 for 2013 and 1.08 for 2014.

Calculate the inventory value at the end of 2013 and 2014 using the dollar-value LIFO method.