Question

A company just starting a business purchased three inventory items at the following prices: March 2,...

A company just starting a business purchased three inventory items at the following prices: March 2, $255; March 7, $265; and March 15, $285. If the company sold one unit for $335 on March 10 and one unit for $355 on March 20 and uses the average cost formula in a perpetual inventory system, what is the cost of ending inventory?

$268.33

$355.00

$285.00

$272.50

The Marigold Ltd. purchased $5800 worth of laundry supplies on June 2 and recorded the purchase as an asset in the Supplies account. On June 30, a count of the laundry supplies indicated only $3300 on hand. The adjusting entry that should be made by the company on June 30 is

debit Supplies Expense, $2500; credit Supplies, $2500.

debit Supplies, $3300; credit Supplies Expense, $3300.

debit Supplies, $2500; credit Supplies Expense, $2500.

debit Supplies Expense, $3300; credit Supplies, $3300

Homework Answers

Answer #1

1. Answer: $272.50

Calculations:

Purchases Cost of goods sold Ending inventory Average cost
Mar 2 $ 255 $ 255 $ 255
Mar 7 $ 265 $ 520 $ 260 [$520/2 items]
Mar 10 ($ 260) $ 260
Mar 15 $ 285 $ 545 $ 272.50 [$545/2 items]
Mar 20 ($ 272.50) $ 272.50

.

2.Answer: Debit Supplies expense $ 2500; Credit Supplies, $2500

Explanation:

Adjusting Entry:

Date Account title and explanation Debit Credit
June 30 Supplies expense [$5800-$3300] $ 2,500
Supplies $ 2,500
[To record supplies expense]
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A company just starting business made the following four inventory purchases in June: Date Number of...
A company just starting business made the following four inventory purchases in June: Date Number of units purchased Total cost June 1 160 units $ 350 June 10 220 units 580 June 15 220 units 700 June 28 130 units      560 $2190 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is a) $600 b) $1204 c) $687...
1. A credit sale of $1100 is made on July 15, terms 2/10, net/30, on which...
1. A credit sale of $1100 is made on July 15, terms 2/10, net/30, on which a return of $100 is granted on July 18. What amount is received as payment in full on July 24? $980 $1100 $1050 $1078 2. Which one of the following is not a justification for adjusting entries? Adjusting entries are necessary to ensure that the expense recognition principle is followed. Adjusting entries are necessary to ensure that the revenue recognition principle is followed. Adjusting...
a.-b. Merchandise Inventory, before adjustment, has a balance of $6,800. The newly counted inventory balance is...
a.-b. Merchandise Inventory, before adjustment, has a balance of $6,800. The newly counted inventory balance is $7,300. Unearned Seminar Fees has a balance of $5,300, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019. Prepaid Insurance has a balance of $7,800 for six months’ insurance paid in advance on May 1, 2019. Store equipment costing $17,710 was purchased on March 31, 2019. It has...
A company just starting business made the following four inventory purchases in June: June      1                      &
A company just starting business made the following four inventory purchases in June: June      1                           150 units                      $   490 June    10                           200 units                           785 June    15                           200 units                           830 June    28                           150 units                           810                                                                                $2,915 A physical count of merchandise inventory on June 30 reveals that there are 220 units on hand. Using the Periodic Inventory System. a. Using the LIFO inventory method, the value of the ending inventory on June 30 is? b. Using the Average Cost Inventory Method...
A company has the following transactions during March: March 3 Purchases inventory on account for $3,100,...
A company has the following transactions during March: March 3 Purchases inventory on account for $3,100, terms 2/10, n/30. March 5 Pays freight costs of $250 on inventory purchased on March 3. March 6 Returns inventory with a cost of $700. March 12 Pays the full amount due on March 3 purchase. March 29 Sells all inventory purchased on March 3 (less those returned on March 6) for $5,700 on account. Record all transactions, including the month-end adjustment to cost...
1. Under the perpetual inventory system, which of the following accounts would not be used? Select...
1. Under the perpetual inventory system, which of the following accounts would not be used? Select one: a. Sales b. Accounts Payable c. Cost of Goods Sold d. Purchases e. Inventory 2. Jones Merchandise uses a perpetual inventory system. It is a publicly traded company. On February 19 it sold $8,000 of motor parts to Vivak Candles on account. Jones statistics indicate 5% of its sales will result in returns. Jones's cost of inventory on motor parts is 50% of...
Pronghorn Corp. uses a perpetual inventory system. The company had the following inventory transactions in April:...
Pronghorn Corp. uses a perpetual inventory system. The company had the following inventory transactions in April: April 3 Purchased merchandise from DeVito Ltd. for $25,700, terms 1/10, n/30, FOB shipping point. 6 The appropriate company paid freight costs of $700 on the merchandise purchased on April 3. 7 Purchased supplies on account for $5,450. 8 Returned damaged merchandise to DeVito and was given a purchase allowance of $3,400. The merchandise was repaired by DeVito and returned to inventory for future...
ABC Company had the following balances and transactions during 2009. Beginning inventory 10 units at $70...
ABC Company had the following balances and transactions during 2009. Beginning inventory 10 units at $70 per unit March 6 purchased 9 units for $71 per unit March 10 sold 8 units for $100 per unit June 10 purchased 20 units for $81 per unit October 30 sold 15 units for $100 per unit Operating expenses for 2009 was $345 in total. What is total operating income for 2009 if the perpetual FIFO costing method is used?
a.-b. Merchandise Inventory, before adjustment, has a balance of $7,600. The newly counted inventory balance is...
a.-b. Merchandise Inventory, before adjustment, has a balance of $7,600. The newly counted inventory balance is $8,100. Unearned Seminar Fees has a balance of $6,100, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019. Prepaid Insurance has a balance of $12,600 for six months’ insurance paid in advance on May 1, 2019. Store equipment costing $4,350 was purchased on March 31, 2019. It has...
a-b. Merchandise Inventory, before adjustment, has a balance of $7,800. The newly counted inventory balance is...
a-b. Merchandise Inventory, before adjustment, has a balance of $7,800. The newly counted inventory balance is $8,300. c. Unearned Seminar Fees has a balance of $6,300, representing prepayment by customers for five seminars to be conducted in June, July, and August 2016. Two seminars had been conducted by June 30, 2016. d. Prepaid Insurance has a balance of $13,800 for six months insurance paid in advance on May 1, 2016. e. Store equipment costing $6,530 was purchased on March 31,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT