2/21 ACCT2121 PAL Session Chapter 6

Record the following transactions for BLA Corporation using a perpetual inventory system:

On March 1st, BLA Corporation sold $237,000 of merchandise to Lisa co. The cost of merchandise sold was $185,000. Credit terms 2/10, n/30, freight terms FOB shipping point.

• Cash goes up $237,000, revenue goes up $237,000, Inventory increases $185,000, cost of goods sold increases $185,000

• Accounts receivable goes up $52,000, revenue goes up $52,000

• Accounts receivable goes up $237,000, sales revenue goes up $237,000, Inventory decreases $185,000, Cost of goods sold increases $185,000

Record the following transactions for BLA Corporation using a perpetual inventory system:

On March 2nd, $80 was paid to the public carrier for transportation costs. (FOB Shipping point)

• Cash decreases $80, freight out expense increases $80

• Cash decreases $80, inventory increases $80

• No transaction occurred

Record the following transactions for BLA Corporation using a perpetual inventory system:

On March 3rd, Lisa Co. returned $53,000 worth of merchandise. The cost of merchandise returned was $32,000

• Accounts receivable decreases $53,000, revenue decreases $53,000, inventory increases $32,000, COGS decreases $32,000

• Accounts receivable decreases $53,000, sales returns and allowances increases $53,000, inventory increases $32,000, COGS decreases $32,000

• Accounts payable decreases $53,000, inventory decreases $53,000

Record the following transactions for BLA Corporation using a perpetual inventory system

On March 12th, BLA Corporation received the payment due from Lisa Co.

• Cash increases 184,000, accounts receivable decreases 184,000

• Cash increases $184,000, revenue increases $184,000

• Inventory increases $184,000, accounts receivable decreases $184,000

What type of inventory system would a produce company want to use?

• FIFO

• LIFO

• Average-cost

Whitman corporation finished it’s first year of operations and made the following purchases for inventory

January 4th: Beginning inventory: 6,000 units for $15

June 16th: 3,000 units for $20

November 2nd: 4,000 units for $24

At the end of the year, Whitman Corporation had 2,000 units left on hand.

Calculate their cost of goods sold under FIFO.

• $127,000

• $198,000

• $48,000

• $63,000

Whitman corporation finished it’s first year of operations and made the following purchases for inventory

January 4th: Beginning inventory: 6,000 units for $15

June 16th: 3,000 units for $20

November 2nd: 4,000 units for $24

At the end of the year, Whitman Corporation had 2,000 units left on hand.

Calculate their ending inventory under FIFO

• $127,000

• $198,000

• $48,000

• $63,000

Goods that a company holds on consignment should be included in its inventory.

• True

• False

Eloise company should not include purchased goods in their inventory count that are still in transit (FOB Shipping point)

• True

• False

Whitman corporation finished it’s first year of operations and made the following purchases for inventory

January 4th: Beginning inventory: 6,000 units for $15

June 16th: 3,000 units for $20

November 2nd: 4,000 units for $24

At the end of the year, Whitman Corporation had 2,000 units left on hand.

Calculate their cost of goods sold under LIFO

• $216,000

• $30,000

• $148,000

• $64,000