Question

The following information applies to the questions displayed below.] Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won’t damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2019. All watches are sold for $307 each

. Jul. 17 Purchased 57 watches for $8,949 ($157 per watch) on account.

Jul. 31 Sold 47 watches for $14,429 cash.

Aug. 12 Purchased 47 watches for $7,849 ($167 per watch) cash.

Aug. 22 Sold 37 watches for $11,359 on account.

Sep. 19 Paid for watches ordered on July 17.

Sep. 27 Received full payment for watches sold on account on August 22.

Oct. 27 Purchased 87 watches for $15,399 ($177 per watch) cash. Nov. 20 Sold 97 watches for $29,779 cash.

Dec. 4 Purchased 114 watches for $21,318 ($187 per watch) cash.

Dec. 8 Sold 47 watches for $14,429 on account.

Requires

1-a. Calculate sales revenue, cost of goods sold, and ending inventory as of December 31, 2019, assuming Suzie uses FIFO to account for inventory.

1-b. Prepare the gross profit section of a partial income statement for transactions related to MU watches.

2. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $107 per watch.

a. Record any necessary adjustment on December 31, 2019, related to this information.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. For what amount would MU inventory be reported in the December 31, 2019, balance sheet? c. Prepare an updated gross profit section of a partial income statement accounting for this additional information.

I did the Table, but I think something is wrong.

Dates	Purchase			sales			balance
	Units	Cost x unit	Total	Units	cost x unit	Total	Units	Cost per unit	total
17-Jul	57	157	8949				57	157	8949
31-Jul				46	157	7222	11	157	1727
12-Aug	47	167	7894				11	157	1727
							47	167	7894
22-Aug				11	157	1726	21	167	3507
				26	167	4342
27-Oct	87	177	15399				21	167	3507
							87	177	15399
20-Nov				21	167	3507	11	177	1947
				76	177	13452
4-Dec	114	187	21318				11	177	1947
							114	187	21318
8-Dec				11	177	1947	78	187	14586
				36	187	6732
Total	305		53560	227		38928	469		82508

Answer 1

1. Dear Student, I have cchecked your answer and following are the mistakes found :

a. Sales on 31st July is of 47 units @ $307 totalling $14,429 but you have written only 47 @ 157 for $7222.

b. August 12th Entry for purchase of watch is of total amount $7.849 but you have written $7,894. (Both in Purchase column & balance column).

c. August 22, Sales is at $307. All the sales are made on $307 but I think you have considered cost there. The same is not correct method selected by you.

Other Things are good to go but you have to change the sales amount as per $307 in each entry as you cannot record the sales at cost price of watch.