Q1.The ledger accounts given below, with an identification number for each, are

Question

Q1.The ledger accounts given below, with an identification number for each, are used by Seton Company. Selso uses a perpetual inventory system.

Instructions: Prepare appropriate entries for the month of August by placing the appropriate identification number(s) in the debit and credit columns provided and the dollar amounts pertaining to each account in the adjoining columns. Item 0 is given as an example.
1. Cash 7. Accounts Payable
2. Accounts Receivable 8. Sales Returns and Allowances
3. Notes Receivable 9. Sales Discounts
4. Merchandise Inventory 10. Sales
5. Office Supplies 11. Cost of Goods Sold
6. Land 12. Freight-out

Account(s) Account(s) Debit Credit
Entry Information Debited Credited Amount(s) Amount(s)
0. Oct. 1 Sold merchandise for cash $500. 1 10 $500 $500
The cost of the merchandise sold
was $300. 11 4 300 300
1. Oct. 2 Purchased merchandise from
ABC Co. on account for $4,000;
terms 2/10, n/30.
2. Oct. 4 Returned $500 of merchandise
Purchased from ABC Co. on
Oct. 2.
3. Oct. 6 Sold merchandise to F. Banker
on account for $800, terms 2/10,
n/30. F. Banker will pay $50 freight
costs per the shipping terms. The
merchandise sold cost $480.
4. Oct. 8 Accepted a sales return of defective
merchandise from F. Banker—
credit granted was $275. The returned
merchandise cost $165.
5. Oct. 11 Purchased merchandise from
Patting Hardware on account for
$1,600; terms 1/10, n/30.
6. Oct. 12 Paid freight of $250 on the shipment
from ABC Co. per the shipping terms
of purchase on Oct 2.
7. Oct. 15 Received payment in full from F.
Bannker.
8. Oct. 19 Paid ABC Co. in full.
9. Oct. 20 Paid Patting Hardware in full.
10. Oct. 27 Purchased office supplies for $550

Q2. Futon Company, which uses a periodic inventory system, had a beginning inventory on April 1 of 400 units of Product A at a cost of $14 per unit. During April, the following purchases and sales were made.

Purchases Sales
April 6 375 units at $15 April 4 270 units
14 250 units at $16 8 360 units
21 300 units at $18 17 400 units
28 425 units at $22 24 235 units
1,350 1,265

Instructions
Compute the April 30 ending inventory and April cost of goods sold under (a) average cost, (b) FIFO, and (c) LIFO. Provide appropriate supporting calculations.

(a) Average - Ending Inventory = $_________; Cost of Goods Sold = $_________.




(b) FIFO - Ending Inventory = $_________; Cost of Goods Sold = $_________.




(c) LIFO - Ending Inventory = $_________; Cost of Goods Sold = $_________.

Explanation / Answer

1. Oct. 2 Purchased merchandise from ABC Co. on account for $4,000 terms 2/10, n/30. Merchandise Inventory(4) $4000 Accounts Payable (7) $4,000 2. Oct. 4 Returned $500 of merchandise Purchased from ABC Co. on Oct. 2. Accounts Payable (7) $500 Merchandise Inventory (4) $500 3. Oct. 6 Sold merchandise to F. Banker on account for $800, terms 2/10, n/30. F. Banker will pay $50 freight costs per the shipping terms. The merchandise sold cost $480. Accounts receivable(2) $800 Sales(10) $800 Cost of goods sold (11) $480 Merchandise Inventory(4) $480 4. Oct. 8 Accepted a sales return of defective merchandise from F. Banker— credit granted was $275. The returned merchandise cost $165. Sales return and allowance (8) $275 Accounts receivable (2) $275 Merchandise Inventory (4) $165 Cost of goods sold (11) $165 6. Oct. 11 Purchased merchandise from Patting Hardware on account for $1,600; terms 1/10, n/30. Merchandise Inventory(4) $1,600 Accounts payable (7) $1,600 6. Oct. 12 Paid freight of $250 on the shipment from ABC Co. per the shipping terms of purchase on Oct 2. Merchandise Inventory(4) $250 Cash (1) $250 7. Oct. 15 Received payment in full from F. Bannker. Cash (1) $514.50 Sales discount(9) $ 10.50 Accounts receivable(2) $525 8. Oct. 19 Paid ABC Co. in full. Accounts Payable(7) $3,500 Cash(1) $3,500 9. Oct. 20 Paid Patting Hardware in full. Accounts Payable (7) $1,600 Cash (1) $1,584 Merchandise Inventory (4) $ 16 10. Oct. 27 Purchased office supplies for $550 Office supplies (5) $550 Cash (1) %550 Q2. Futon Company, which uses a periodic inventory system, had a beginning inventory on April 1 of. During April, the following purchases and sales were made. Purchases Sales 400 units at $14 5,600 April 6 375 units at $15 5,625 April 4 270 units 14 250 units at $16 4,000 8 360 units 21 300 units at $18 5,400 17 400 units 28 425 units at $22 9,350 24 235 units 1,750 29,975 1,265 485 units 17.13 Instructions Compute the April 30 ending inventory and April cost of goods sold under (a) average cost, (b) FIFO, and (c) LIFO. Provide appropriate supporting calculations. (a) Average - Ending Inventory = $_8,308.05; Cost of Goods Sold = $__21,669.95____. (b) FIFO - Ending Inventory = $__10,430_______; Cost of Goods Sold = $___19,545______. (c) LIFO - Ending Inventory = $__6,875_______; Cost of Goods Sold = $___23,100______.

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