70.2K

Verified Solution

Link Copied!

Required information Problem 6-6A Record transactions using a perpetual system, prepare a partial income statement, and adjust for the lower of cost and net realizable value (LO6-2, 6-3, 6-4, 6-5, 6-6) [The following information applies to the questions displayed below.) At the beginning of October, Bowser Co.'s inventory consists of 68 units with a cost per unit of $32. The following transactions occur during the month of October October 4 Purchase 112 units of inventory on account from Waluigi Co. for $50 per unit, terms 2/10, n/30. October 5 Pay cash for freight charges related to the October 4 purchase, $552. October 9 Return 20 defective units from the October 4 purchase and receive credit. October 12 Pay Waluigi Co. in full. October 15 Sell 142 units of inventory to customers on account, $11,360. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $6 per unit for freight less $1 per unit for the purchase discount, or $55 per unit.] October 19 Receive full payment from customers related to the sale on October 15. October 20 Purchase 82 units of inventory from Waluigi Co. for $52 per unit, terms 1/10, n/30. October 22 Sell 82 units of inventory to customers for cash, $6,560. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on October 20.) Problem 6-6A Part 1 Required: 1. Assuming that Bowser Co. uses a FIFO perpetual inventory system to maintain its inventory records, record the transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Problem 6-6A Record transactions using a perpetual system, prepare a partial income statement, and adjust for the lower of cost and net realizable value (L06-2, 6-3, 6-4, 6-5, 6-6) [The following information applies to the questions displayed below. At the beginning of October, Bowser Co.'s inventory consists of 68 units with a cost per unit of $32. The following transactions occur during the month of October October 4 Purchase 112 units of inventory on account from Waluigi Co. for $50 per unit, terms 2/10, n/30. October 5 Pay cash for freight charges related to the October 4 purchase, $552. October 9 Return 20 defective units from the October 4 purchase and receive credit. October 12 Pay Waluigi Co. in full. October 15 sell 142 units of inventory to customers on account, $11,360. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $6 per unit for freight less $1 per unit for the purchase discount, or $55 per unit. ] October 19 Receive full payment from customers related to the sale on October 15. October 20 Purchase 82 units of inventory from Waluigi Co. for $52 per unit, terms 1/10, n/30. October 22 Sell 82 units of inventory to customers for cash, $6,560. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on October 20.) Problem 6-6A Part 2 2. Suppose by the end of October that the remaining inventory is estimated to have a net realizable value per unit of $27. Record any necessary adjustment for lower of cost and net realizable value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the adjustment of inventory to net realizable value. Required information Problem 6-6A Record transactions using a perpetual system, prepare a partial income statement, and adjust for the lower of cost and net realizable value (LO6-2, 6-3, 6-4, 6-5, 6-6) (The following information applies to the questions displayed below.) At the beginning of October, Bowser Co.'s inventory consists of 68 units with a cost per unit of $32. The following transactions occur during the month of October October 4 Purchase 112 units of inventory on account from Waluigi Co. for $50 per unit, terms 2/10, n/30. October 5 Pay cash for freight charges related to the October 4 purchase, $552. October 9 Return 20 defective units from the October 4 purchase and receive credit. October 12 Pay Waluigi Co. in full. October 15 Sell 142 units of inventory to customers on account, $11,360. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $6 per unit for freight less $1 per unit for the purchase discount, or $55 per unit. ] October 19 Receive full payment from customers related to the sale on October 15. October 20 Purchase 82 units of inventory from Waluigi Co. for $52 per unit, terms 1/10, n/30. October 22 Sell 82 units of inventory to customers for cash, $6,560. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on October 20.) Problem 6-6A Part 3 3. Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjustment for lower of cost and net realizable value. BOWSER CO. Multiple-step Income Statement (partial) For the month of October

Answer & Explanation Solved by verified expert

See Answer