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    Detailed Inventory Control Calculations

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    On January 1, 2011, Kloppenberg Company had Accounts Receivable $138,000, Notes Receivable $21,800, and Allowance
    for Doubtful Accounts $12,500. The Notes Receivable is From Sara Rogers Company. It is a 4-month, 11% note dated December
    31, 2010. Kloppenberg Company prepares financial statements annually. During the year the following selected transactions

    Jan. 5 Sold $22,700 of merchandise to Dedonder Company, terms n/15.
    Jan. 20 Accepted Dedonder Company's $22,700, 3-month, 9% note for balance due.
    Feb. 18 Sold $8,490 of merchandise to Ludwig Company and accepted Ludwig's $8,490, 6-month note for the amount due.
    Apr. 20 Collected Dedonder Company note in full.
    Apr. 30 Received payment in full from Sara Rogers Company on the amount due.
    May 25 Accepted Jenks Inc.'s $3,720, 3-month, 7% note in settlement of a past-due balance on account.
    Aug. 18 Received payment in full from Ludwig Company on note due.
    Aug. 25 The Jenks Inc. note was dishonored. Jenks Inc. is not bankrupt; future payment is anticipated.
    Sept. 1 Sold $12,700 of merchandise to Lena Torme Company and accepted a $12,700, 6-month, 10% note for the amount due.


    In the first month of operation, Gulletson Company purchased 121 units of inventory for $10, then 248 units for $11, and
    finally 162 units for $12. At the end of the month, 277 units remained. The company uses the periodic method.

    Calculate the amount of phantom profit that would result if the company used FIFO rather than LIFO.



    Cody Company reports net income of $117,200 in 2011. However, ending inventory was understated $16,560. What
    is the correct net income for 2011?


    At December 31, 2011, the following information was available for J. Graff Company: ending inventory $50,040,
    beginning inventory $73,730, cost of goods sold $279,780, and sales revenue $393,820. Calculate inventory
    turnover and days in inventory for J. Graff Company.


    This information is available for Santo's Photo Corporation for 2010, 2011, and 2012.

    2010 2011 2012

    Beginning Inventory $101,890 $298,210 $399,400
    Ending Inventory 298,210 399,400 480,760
    Cost of Goods Sold 904,350 1,121,280 1,303,870
    Sales 1,203,930 1,597,430 1,901,220

    Calculate inventory turnover, days in inventory, and gross profit rate for Santo's Photo
    Corporation for 2010, 2011, and 2012.


    Yount Company reports the following for the month of June:

    Date Transactions Units Unit Cost Total Cost
    Jun. 1 Inventory 200 $9.28 $1,856
    Jun. 12 Purchase 300 $10.28 $3,084
    Jun. 23 Purchase 500 $11.28 $5,640
    Jun. 30 Inventory 120

    Calculate the cost of inventory and the cost of goods sold for each cost flow assumption, using
    a perpetual inventory system. Assume a sale of 400 units occurred on June 15 for a selling price of
    $10 and a sale of 480 units on June 27 for $11.



    The inventory of Faber Company was destroyed by fire on March 1. From an examination
    of the accounting records, the following data for the first 2 months of the year are obtained;
    Sales $50,100, Sales Returns and Allowances $1,000, Purchases $31,630, Freight-in $1,110,
    and purchase Returns and Allowances $1,630.

    Determine the merchandise lost by fire, assuming:

    a). A beginning inventory of $15,600 and a gross profit rate of 36% on net sales.



    At December 31, 2010, Leis Company reported the following information on its balance sheet:

    Accounts Receivable $903,400
    Less: Allowance for Doubtful Accounts 80,500
    Net Account Receivable $822,900

    During 2011, the company had the following transactions related to receivables:

    1 Sales on account $3,273,900
    2 Sales returns and allowances 49,200
    3 Collections of accounts receivable 2,785,700
    4 Write-offs of accounts receivable deemed uncollectable 91,100
    5 Recovery of bad debts previously written off as uncollectable 23,200

    Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on
    the collections of accounts receivables.

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    Solution Summary

    Detailed instructions on using the various inventor control methods, as well as the completion of numerous journal entries involving inventory control.