Question

Hamada Hand Tools, Inc. (HHT) had the following transactions related to purchases and sales of merchandise for the last month. The selling price of hand tools was $80 each, with a credit term of 2/10, n/30. All purchases were on credit, with a term of 2/10, n/30.
May 2 Purchased 30 hand tools at $45 each.
May 6 Sold 15 hand tools to CAT Construction, Inc.
May 10 Purchased 25 hand tools at $42 each.
May 14 Sold 20 hand tools to Max Tools.
May 16 Max Tools returned 2 hand tools to HHT.
May 18 Sold 12 hand tools to Parker Co.
May 22 Purchased 40 hand tools at $44 each.
May 27 Sold 25 hand tools to Bibby Co.
On May 1, HHT had 10 hand tools in inventory, with a total cost of $480.
Requirements
1. Calculate the ending inventory and cost of goods sold using a perpetual inventory system:
(a) FIFO
(b) Average cost
2. Calculate the ending inventory and cost of goods sold using a periodic inven¬tory system:
(c) FIFO
(d) Average cost
3. Prepare the journal entries using a perpetual inventory system:
(a) FIFO
(b) Average cost
4. Calculate the ending inventory and cost of goods sold, assuming HHT is using the specific-identification method. HHT provided the following additional information:
• May 6 sale: all units were taken from the May 2 purchase.
• May 14 sale: 10 units were taken from the beginning inventory and 10 units from the May 10 purchase
• May 16 sales return: 2 units were returned to the beginning inventory cost
• May 18 sale: all units were taken from the May 10 purchase
• May 27 sale: all units were taken from the May 22 purchase


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  • CreatedJuly 08, 2015
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