Instructions
27
Received payment in full from Satchel World for all transactions.
Received payment in full from The Going Concern.
(a) Is Travel Warehouse a retailer or a wholesaler? Explain.
(b) Record the July transactions. (Record transactions to the nearest dollar.)
(c) Set up a T account for the Inventory account. Enter the prepared in part (b), and determine the ending balance in the account.
(d) Determine the number of suitcases Travel Warehouse has in the account July 31. What is the average cost of these suitcases on July 31? (Hint: Divide the ending balance in the Inventory account calculated in part (c) and divide it by the number of suitcases on hand at July 31. Round your answer to the nearest dollar.)
P5-3B Presented here are selected transactions for Shaoshi Inc. during October of the current year. Shaoshi uses a perpetual inventory system.
Oct. 1 Purchased merchandise on account from Micron Ltd. at a cost of $86,000, terms 1/15, n/30, FOB shipping point.
2 Freight charges of $1,400 were paid by the appropriate party on the October 1 purchase of merchandise.
Returned for credit $4,000 of damaged goods purchased from Micron on October 1.
6 Purchased supplies for $2,800 cash.
8 Sold the remaining merchandise purchased from Micron to Guidant Corp. for $140,000 on account, terms 2/10, n/30, FOB destination.
9 Freight charges of $2,300 were paid by the appropriate party on the October 8 sale of merchandise.
10 Purchased equipment on account for $62,000.
12 Guidant returned damaged merchandise that was purchased on October 8 for a $3,500 credit on account. The merchandise originally cost $2,185 and was not restored to inventory.
15 Purchased merchandise for $36,300 cash.
17 Received the balance owing from Guidant.
28 The merchandise had a cost of $18,000.
Sold merchandise for $30,000 on account to Deux Ltée, terms 2/10, n/30, FOB shipping point.
29 Freight charges of $750 were paid by the appropriate party on the October 28 sale of merchandise.
30 Paid Micron the balance owing.
31 Deux returned some of the merchandise that was purchased on October 28 for a $5,000 credit on account. The merchandise originally cost $3,000 and was restored to inventory.
