Piggly Wiggly Grocery Store
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Piggly Wiggly Grocery Store
1. What is the physical flow of merchandise into the store, and what documents are used in connection with this flow?
2. What documents are prepared when merchandise is sold?
3. Does the store keep perpetual inventory records? If so, does it keep the records in units only, or does it keep track of cost as well? If not what system does the store use?
4. How often does the company take physical inventory?
5. How are financial statements generated for this store?
6. What method does the company use to cost its inventory for financial statements?
Muskego Lakes Country Club Pro Shop
1) Retail Inventory in the store is ordered quarterly and is logged manually through a software package from Microsoft. This is a new software package that was purchased this year. Items can be ordered on an emergency basis, but it is discouraged. Purchase orders and Invoices are used to track new inventory. The owner of the course makes all final decisions on purchases and is responsible for cutting checks.
2) To track items purchased, receipts and carbon copies are printed. One to the customer and the other in the register. Credit card receipts come from the credit card machine and are stapled to the receipt. The drawer is balanced nightly. Older Inventory is donated to outings for prizes or auction.
3) The store uses a periodic inventory system. The manager stated that they do not move enough goods to switch to a perpetual system. Costs are estimated per unit and are priced to make a percentage of profit. The manager would not yield the percentage.
4) Physical Inventory is taken quarterly or after a major event at the course.
5) The course has a contracted accountant that runs the numbers for the store and generates the financials.
The store uses the average cost method to figure out inventory costs.
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What are the differences and similarities between each business listed below. The answer should cover each question.
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Piggly Wiggly Grocery Store
1. What is the physical flow of merchandise into the store, and what documents are used in connection with this flow?
The physical flow of merchandise into the store is the physical movement of goods from the suppliers. There will be the quotation, purchase order, and invoice used in connection with this flow whereby the store will request for quotation from the suppliers. Then, if the price is accepted, the store will issue purchase order for the products. Finally, when the products are delivered, the suppliers will send the invoice to the grocery store.
2. What documents are prepared when merchandise is sold?
The document to be prepared when the merchandise is sold is the tax invoice, which will record the price and quantity sold. Then, the grocery store has to journalize the entries for sales, purchases, cost of goods sold, returns and discounts on purchased merchandises under appropriate inventory system.
3. Does the store keep perpetual inventory records? If so, does it keep the records in units only, or does it keep track of cost as well? If not what system does the store use?
The grocery store will use the periodic inventory system because it has a large amount of inventory with low value.
4. ...
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