29 Jun Question Question 8 Kumar Inc. uses a perpetua
Question
Question 8
Kumar Inc. uses a perpetual inventory system. At January 1, 2013, inventory was $245,030 at both cost and market value. At December 31, 2013, the inventory was $327,470 at cost and $308,005 at market value. Prepare the necessary December 31 entry under:
(a)
the cost of goods sold method
Description/Account
Debit
Credit
(b)
the loss method
Description/Account
Debit
Credit
Question 9
Boyne Inc. had beginning inventory of $15,360 at cost and $25,600 at retail. Net purchases were $153,600 at cost and $217,600 at retail. Net markups were $12,800; net markdowns were $8,960; and sales were $200,960. Compute ending inventory at cost using the conventional retail method.(Round computation for cost-to-retail ratio percentage and answer to 0 decimal places, e.g. 25,250.)
Ending inventory
$
Question 10
(Gross Profit Method)
Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.
Inventory, May 1
$201,600
Purchases (gross)
806,400
Freight-in
37,800
Sales
1,260,000
Sales returns
88,200
Purchase discounts
15,120
(a)
Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.
Inventory
$
(b)
Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.
Inventory
$
Question 11
Previn Brothers Inc. purchased land at a price of $29,030. Closing costs were $3,350. An old building was removed at a cost of $11,670. What amount should be recorded as the cost of the land?
$
Question 12
Garcia Corporation purchased a truck by issuing an $115,200, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.(Round answers to 0 decimal places, e.g. 15,510. List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5
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