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Jones Company W5-1 Journalize Perpetual Inventory Entries

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W5-1 Journalize perpetual inventory entries (Chapter 5)

Assume that on May 1, Jones Company had inventory that included
a product called ADX-1023. The company uses a perpetual
inventory system. During May, these transactions occurred.

8 Purchased ADX-1023 from ZXY Company for a total
cost of \$7,535 , terms n/30.
11 Paid freight of \$75 on the merchandise purchased
from ZXY Company.
12 Returned merchandise to ZXY Company for \$136
credit because it was defective.
14 Sold the ADX-1023 merchandise costing \$1,278 for
\$1,476 to Fox Company, terms n/30.
18 Granted credit of \$87 to Fox Company for the return
of merchandise that was not ordered. The merchandise cost
\$65 .
23 Sold ADX-1023 merchandise costing \$923 for
\$1,175 to ABC Company, terms n/30.

Instructions:
Journalize the May transactions.
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W5-2 Compute inventory and cost of goods sold using periodic FIFO and LIFO (Chapter 6)

ABC Supply Company uses a periodic inventory system. Its records show the
following for the month of February in which 217 units were sold.

Date Explanation Units Unit Cost Total Cost
Feb 1 Inventory 76 \$100 \$7,600
Feb 12 Purchases 39 103 4,017
Feb 19 Purchases 45 104 4,680
Feb 26 Purchases 86 105 9,030
246 \$25,327

Instructions:
Compute the ending inventory at February 28 using the FIFO and
LIFO methods. Prove the amount allocated to cost of goods sold
under each method.
For both FIFO and LIFO, calculate the sum of ending inventory and
cost of goods sold.

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W5-3 Internal Controls (Chapter 7)

DEF Company has the following internal control procedures over
cash receipts. Identify the internal control principle that is applicable
to each procedure.

Enter Internal Control Priciple
The duties of receiving cash, recording cash, and having custody of cash is assigned to difference individuals.
Daily cash counts are made by cashier department supervisors.
All over-the-counter receipts are registered on cash registers.
Only cashiers may operate cash registers.
All cashiers are bonded.