Periodic Inventory Method
Not what you're looking for?
Nate's Grocery as January 1, 2012. The following events occurred in 2012. Assume that Nate's uses the periodic inventory method.
Comprehensive cycle problem: period system (Appendix)
The following trial balance pertains to Nate's Grocery as January 1, 2012.
Account Title Beginning Balances
Cash $26,000
Account receivable 4,000
Merchandise inventory 50,000
Accounts payable 4,000
Common Stock 43,000 Retained earnings 33,000
Totals $80,000
The following events occurred in 2012. Assume that Nate's uses the periodic inventory method.
1. Purchased land for $9,000 cash
2. Purchased merchandise on account for $96,000, terms 1/10 n/45.
3. Paid freight of $1,000 cash on merchandise purchased FOB shipping point.
4. Returned $3,600 of defective merchandise purchased in Event 2.
5. Sold merchandise for$86,000
6. Sold merchandise on account for $90,000, terms 2/10 n/30.
7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
8. Paid $11,600 cash for selling expenses.
9. Collected $50,000 of the accounts receivable from Event 6 within the discount period.
10. Collected $40,000 of the accounts receivable but not within the discount period.
11. Paid $6,400 of other operating expenses.
12. A physical count indicated that $47,600 of inventory was on hand at the end of the accounting period.
Required
a. Record the above transactions in a horizontal statements model on the template
b. Prepare a schedule of cost of goods sold and an income statement.
Purchase this Solution
Solution Summary
A periodic inventory method is determined.
Purchase this Solution
Free BrainMass Quizzes
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.