NOTE:WS2:All payments are for the full amount due (after discount).You have to compare the values in the 2 tables to interpret the transactions.The comments to the right on the WS and in the Task 3 PDF explain the circumstances.WS 6 is just to see how many people know how to do a Bank Reconciliation.If you want to review the process you can check the Ch. 6 PP.We don’t cover this in class anymore, but we like to track general knowledge among MBAs.Please skip the instruction on handwritten calculations.Your EXCEL programming is sufficient.
Task 3 BACC 518 Summer 2021 NOTE: Please READ and FOLLOW the Fillable PDF instructions posted on BB. Please submit a document showing all your handwritten calculations. It can be a scan of a handwritten sheet, saved as a PDF, or a photo of the document. It MUST be neat and legible, showing all calculations, or you will not receive credit for it. Chapter 5: 1. Answer the following questions regarding Shipping terms, assuming the firms use the Perpetual Inventory system. 1. Ace Equipment ships goods to Bryant FOB Shipping Point. Who will be responsible for paying the freight bill: Ace or Bryant? ANSWER: ____________________ 2. Ace Equipment ships goods to Bryant FOB Destination. Who will be responsible for paying the freight bill: Ace or Bryant? ANSWER: ____________________ 3. Dickson purchases materials from Ensign Wholesale. Which shipping terms should Ensign select, if it doesn’t want to pay the freight costs: FOB Shipping Point or FOB Destination? ANSWER: ____________________ 4. Fuller purchases $15,000 in inventory from Gonzo Supplies, FOB Shipping Point. Shipping costs totaled $750. On December 31, 2019, the equipment is still in transit. What amount should Fuller include in its Ending Inventory, regarding this shipment? ANSWER: ____________________ 5. Hall orders $25,000 in inventory from Ithaca Merchandise, FOB Destination. Shipping costs totaled $1,250. On December 31, 2019, the equipment is still in transit. What amount should Hall include in its Ending Inventory, regarding this shipment? ANSWER: ____________________ Chapter 5: 2. Jenkins’ Retail used a Perpetual Inventory system. All purchases from Kincaid Wholesalers were FOB Destination. Jenkins’ first purchase transaction occurred on 1/1. Based on the data provided, analyze the cumulative effects of the inventory transactions in sequence to find the missing values and answer the questions below. Assume Jenkins began with no inventory. Use the Task 3 WB – WS 2 to determine the missing values (xxxx). Enter formulas in the yellow cells to complete the WS. 1/1 Inventory purchase $125,000 1/1 Freight on 1/1 purchase 500 1/5 Inventory returned 12,500 1/5 Allowance for defective inventory 2,000 (Inventory was not returned) 1/8 Discount (2/10, net 30) xxxx 1/8 Payment of entire balance xxxx 1/31 COGS for January sales 65,000 2/1 Inventory purchase $245,000 2/1 Freight on 1/1 purchase 750 2/5 Inventory returned 18,500 2/5 Allowance for defective inventory 3,500 (Inventory was not returned) 2/8 Discount (2/10, net 30) xxxx 2/8 Payment of 185,000 2/28 COGS for Feb. sales 165,000 3/1 Inventory purchase $175,000 3/1 Freight on 1/1 purchase 600 3/5 Inventory returned 8,500 3/5 Allowance for defective inventory 1,250 (Inventory was not returned) 3/8 Discount (2/10, net 30) xxxx 3/8 Payment of entire balance xxxx 3/31 COGS for Feb. sales 135,000 1. What discount amount, if any, was applied on 1/8? ANSWER: ____________________ 2. What was the Merchandise Inventory balance on 1/31, after the COGS was recorded? ANSWER: ____________________ 3. What was the Accounts Payable balance on 2/28? ANSWER: ____________________ 4. What payment was made to Kincaid on 3/8? ANSWER: ____________________ 5. What was the Merchandise Inventory balance on 3/31, after the COGS was recorded? ANSWER: ____________________ Chapter 5: 3. Inventive Retail sells all merchandise online. It makes all inventory sold, so it transfers the cost of new inventory from its manufacturing cost account to its Merchandise Inventory account at the beginning of each month. Since it does not purchase merchandise for resale, it does not record Purchases, Purchase Returns & Allowances, or Purchase Discounts in its Merchandise Inventory account. It uses a Periodic Inventory system, with Sales, Sales Returns, and COGS recorded at the end of each month. All Sales are priced at double the cost of Inventory. Delivery Expense is tracked separately, as an Operating Expense. All Sales payments are applied directly to the customers’ credit cards, so it records no Accounts Receivable for Sales. The firm has a very generous Return policy. Inventive’s first sales transaction occurred on 1/1 and it began with no inventory. Based on the data provided, analyze the cumulative effects of the sales transactions in sequence to answer the questions below. Use the Task 3 WB – WS 3 to determine the answers. Enter formulas in the yellow cells to complete the WS. 1/1 Jan. Inventory cost added $125,000 1/31 Jan. Sales (Retail) 101,500 1/31 Jan. Sales Returns (Retail Price) 12,500 1/31 COGS for Jan. sales 44,500 1/31 Jan. Operating + All Expenses 78,500 2/1 Feb. Inventory cost added 85,000 2/28 Feb. Sales (Retail) 165,000 2/28 Feb. Sales Returns (Retail Price) 18,500 2/28 COGS for Feb. sales 73,250 2/28 Feb. Operating + All Expenses 72,500 3/1 March Inventory cost added 52,000 3/31 March Sales (Retail) 158,000 3/31 March Sales Returns (Retail Price) 8,500 3/31 COGS for March sales 74,750 3/31 March Operating + All Expenses 72,500 1. What was the Merchandise Inventory balance on 1/31, after the COGS was recorded? ANSWER: ____________________ 2. What were March Net Sales? ANSWER: ____________________ 3. What was Feb. Gross Profit? ANSWER: ____________________ 4. What was March Net Income/Loss? ANSWER: ____________________ 5. What was the March Net Profit rate? ANSWER: ____________________ Chapter 6: 4. Lean Merchandise provided the following Inventory purchase data for its Product X. The company uses the periodic inventory approach to calculate its COGS. A physical count reveals that 12,500 units of Product X are still on the shelf on Dec. 31, 2019. Answer the following questions. Use the Task 3 WB – WS 4 to determine the answers. Enter data in the yellow cells to complete the WS. 1. What is the total accumulated cost of 2019 Inventory purchases (also known as Goods Available for Sale)? ANSWER: ____________________ 2. What is the FIFO COGS? ANSWER: ____________________ 3. What is the LIFO COGS? ANSWER: ____________________ 4. What is the AVG. COST COGS? ANSWER: ____________________ 5. Which cost approach yields the highest COGS, lowest Net Income, and lowest taxes? ANSWER: ____________________ Date Explanation Units Unit Cost 1/1 Beg. Inventory 12,500 1.25 2/20 Purchase 1,500 1.28 5/5 Purchase 18,500 1.30 8/12 Purchase 7,500 1.32