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  • Accounting Records For Red Deer Tire LTD Yield The Following

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    Muhammad Shahid
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    Red Deer Tire Ltd's accounting records for 2017 show beginning inventory of $550,000. Purchases for the year totaled $1,200,000 and sales were $2,000,000 with 80% on account and 20% for cash costing $900,000. Ending inventory under FIFO was $850,000. The document provides requirements to journalize the inventory transactions under perpetual and periodic systems and report ending inventory, sales, cost of goods sold and gross profit assuming a perpetual system.

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    Accounting Records for Red Deer Tire Ltd Yield the Following

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    Accounting Records for Red Deer Tire Ltd Yield the Following

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    Red Deer Tire Ltd's accounting records for 2017 show beginning inventory of $550,000. Purchases for the year totaled $1,200,000 and sales were $2,000,000 with 80% on account and 20% for cash costing $900,000. Ending inventory under FIFO was $850,000. The document provides requirements to journalize the inventory transactions under perpetual and periodic systems and report ending inventory, sales, cost of goods sold and gross profit assuming a perpetual system.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    4 views3 pages

    Accounting Records For Red Deer Tire LTD Yield The Following

    Uploaded by

    Muhammad Shahid
    Red Deer Tire Ltd's accounting records for 2017 show beginning inventory of $550,000. Purchases for the year totaled $1,200,000 and sales were $2,000,000 with 80% on account and 20% for cash costing $900,000. Ending inventory under FIFO was $850,000. The document provides requirements to journalize the inventory transactions under perpetual and periodic systems and report ending inventory, sales, cost of goods sold and gross profit assuming a perpetual system.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    Accounting records for Red Deer Tire Ltd yield the

    following #6639
    Accounting records for Red Deer Tire Ltd yield the following

    Accounting records for Red Deer Tire Ltd. yield the following data for the year ended December
    31, 2017 (amounts in thousands):

    Inventory, December 31, 2016............................................................................. $ 550

    Purchases of inventory (on account).................................................................... 1,200

    Sales of inventory-80% on account; 20% for cash (cost $900)......................... 2,000

    Inventory at FIFO cost, December 31, 2017.......................................................... 850

    Requirements

    1. Journalize Red Deer Tire's inventory transactions for the year under (a) the perpetual system
    and (b) the periodic system. Show all amounts in thousands. Use Exhibit 5-4 as a model, on
    page 237.

    2. What differences do you notice in the journal entries between the perpetual system and the
    periodic system?

    3. Report ending inventory, sales, cost of goods sold, and gross profit on the appropriate
    financial statement (amounts in thousands), assuming the perpetual inventory system is used?

    EXHIBIT 5-4

    Recording and Reporting Inventory-Perpetual System and Periodic System (Amounts Assumed)

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    Accounting records for Red Deer Tire Ltd yield the following

    ANSWER
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