2 Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of...
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2 Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2025. All watches are sold for $502 each. July 17 July 31 August 12 August 22 Purchased 52 watches for $7,904 ($152 per watch) on account. Sold 42 watches for $21,084 cash. Purchased 42 watches for $6,804 ($162 per watch) cash. Sold 32 watches for $16,064 on account. September 19 Paid for watches purchased on July 17. September 27 Receive cash of $10,200 for watches sold on account on August 22. October 27 November 20 December 4 December 8 Purchased 82 watches for $14,104 ($172 per watch) cash. Sold 92 watches for $46,184 cash. Purchased 104 watches for $18,928 ($182 per watch) on account. Sold 42 watches for $21,084 on account. RWP6-1 (Algo) Great Adventures Continuing Case Part 2 2. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $102 per watch. a. Record any necessary adjusting entry on December 31, 2025, related to this information, assuming Suzie uses a FIFO perpetual inventory system to account for inventory. b. For what amount would MU inventory be reported in the December 31, 2025, balance sheet? c. Prepare an updated gross profit section of a partial income statement accounting for this additional information. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare an updated gross profit section of a partial income statement accounting for this additional information. GREAT ADVENTURES, INCORPORATED Partial Income Statement For the Year Ended December 31, 2025 Sales Revenue Cost of Goods Sold Gross Profit $ 104,416 13,104 $ 69,780 X 2 Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2025. All watches are sold for $502 each. July 17 July 31 August 12 August 22 Purchased 52 watches for $7,904 ($152 per watch) on account. Sold 42 watches for $21,084 cash. Purchased 42 watches for $6,804 ($162 per watch) cash. Sold 32 watches for $16,064 on account. September 19 Paid for watches purchased on July 17. September 27 Receive cash of $10,200 for watches sold on account on August 22. October 27 November 20 December 4 December 8 Purchased 82 watches for $14,104 ($172 per watch) cash. Sold 92 watches for $46,184 cash. Purchased 104 watches for $18,928 ($182 per watch) on account. Sold 42 watches for $21,084 on account. RWP6-1 (Algo) Great Adventures Continuing Case Part 2 2. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $102 per watch. a. Record any necessary adjusting entry on December 31, 2025, related to this information, assuming Suzie uses a FIFO perpetual inventory system to account for inventory. b. For what amount would MU inventory be reported in the December 31, 2025, balance sheet? c. Prepare an updated gross profit section of a partial income statement accounting for this additional information. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare an updated gross profit section of a partial income statement accounting for this additional information. GREAT ADVENTURES, INCORPORATED Partial Income Statement For the Year Ended December 31, 2025 Sales Revenue Cost of Goods Sold Gross Profit $ 104,416 13,104 $ 69,780 X
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Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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