Cusack Inc. wholesales candy to a variety of retail stores. Inventory at the beginning of the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Cusack Inc. wholesales candy to a variety of retail stores. Inventory at the beginning of the year totaled $6,000. During the current month, the following events took place: 1. On September 4th, additional candy was purchased from Cole Inc. for $9,000 on account. The payment terms are 2/15 net 45. The candy was shipped to the FOB shipping point, so Cusack had to pay $55 for shipping. 2. On September 5th candy was sold for $12,000 on account. (The candy sold had a cost of $5,500). The candy was sold at the FOB destination, so Cusack had to pay $25 for shipping. 3. On September 6th, after reviewing the shipment it was noticed that $500 of candy was spoiled during shipping. The spoiled candy was returned to Cole Inc. for a refund. There were no shipping fees to Cusack. 4. On September 15th the company paid Cole the amount owing for the purchase on September 4th. 5. On September 30th, an inventory count was performed and it was determined that candy costing $8,500 was on hand. Required a) Prepare the income statement to gross profit (i.e. Sales minus COGS) assuming Cusack uses a periodic inventory system. Please be sure to include all appropriate accounts in their correct section (i.e. please show any required details of COGS) Note: you may find it useful to prepare journal entries, but no journal entries are required. b) What is the balance in the inventory account on the balance sheet on September 30th. Cusack Inc. wholesales candy to a variety of retail stores. Inventory at the beginning of the year totaled $6,000. During the current month, the following events took place: 1. On September 4th, additional candy was purchased from Cole Inc. for $9,000 on account. The payment terms are 2/15 net 45. The candy was shipped to the FOB shipping point, so Cusack had to pay $55 for shipping. 2. On September 5th candy was sold for $12,000 on account. (The candy sold had a cost of $5,500). The candy was sold at the FOB destination, so Cusack had to pay $25 for shipping. 3. On September 6th, after reviewing the shipment it was noticed that $500 of candy was spoiled during shipping. The spoiled candy was returned to Cole Inc. for a refund. There were no shipping fees to Cusack. 4. On September 15th the company paid Cole the amount owing for the purchase on September 4th. 5. On September 30th, an inventory count was performed and it was determined that candy costing $8,500 was on hand. Required a) Prepare the income statement to gross profit (i.e. Sales minus COGS) assuming Cusack uses a periodic inventory system. Please be sure to include all appropriate accounts in their correct section (i.e. please show any required details of COGS) Note: you may find it useful to prepare journal entries, but no journal entries are required. b) What is the balance in the inventory account on the balance sheet on September 30th.
Expert Answer:
Answer rating: 100% (QA)
a Calculation of Cost of Goods Sold COGS Beginning Inventory 6000 Plus Purcha... View the full answer
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1111534912
8th edition
Authors: Gary A. Porter, Curtis L. Norton
Posted Date:
Students also viewed these accounting questions
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
On a Friday afternoon in October 2000, Joseph Duncan, a third-year distribution systems analyst for the Michigan Department of Commerce, was sitting at his office desk reading through some background...
-
Three years ago, Witt Gas Controls purchased equipment for $80,000 that was expected to have a useful life of 5 years with a $9000 salvage value . Increased demand necessitated an upgrade costing...
-
List three types of radioactive decay. For each type, describe now the atomic number and atomic mass change.
-
Simplify. 1.005240 1.005150
-
What is the more formal name used for describing the corporate-finance decision concerning which projects to invest in? a. The capital-structure decision b. The capital-budgeting decision c. The...
-
The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is as follows: Dec. 31, 2016 Dec. 31, 2015 Assets Cash Accounts receivable (net Inventories Investments Land .. $ 585,920...
-
(1 point) [3 Write X = as a product X = EE2E3 of elementary matrices. 9 E3 = E = E2=
-
Whispering issued an 9%, 10-year $1,800,000 bond to build a monorail mass transit system. The city received $1,587,988 cash from the bond issuance on January 1, 2025. The bond yield is 11%. Interest...
-
Auditors send bank confirmations for most active bank accounts. Are bank confirmations required under AICPA or PCAOB auditing standards? How does this compare to the requirements for confirmation of...
-
Why does having good plans for the project schedule and costs help project teams during project execution? Why is it difficult to develop good plans in these areas?
-
What is involved in conducting procurements? How do project teams develop a list of qualified sellers? What are some of the main topics addressed in a contract or agreement?
-
What are the main planning processes performed as part of project schedule management? What are some of the most common outputs created, and how are they used?
-
Explain how earned value management helps you monitor project performance and forecast future cost and schedule information. What do you need to do to use earned value management?
-
What is critical path analysis? Should you know the critical path for all projects? Why or why not?
-
You have been employed by Delisle as an external consultant to help them solve their problem. What is the current strategy for the company (goals, product mix, value proposition)? List 2 new...
-
Integration is a vital concept when applied in one?s life. Integrating your life means making ideal choices. Perfect choices on the other go in line with quality decisions. Quality decisions lead to...
-
Glendive Corp. is in the process of preparing its statement of cash flows for the year ended June 30, 2012. An income statement for the year and comparative balance sheets are as follows: For the...
-
On May 1, 2011, Ryde Inc. had common stock of $345,000, additional paid-in capital of $1,298,000, and retained earnings of $3,013,000. Ryde did not purchase or sell any common stock during the year....
-
On December 23, 2012, Miller Wholesalers ships merchandise to Michael Retailers with terms of FOB destination point. The merchandise arrives at Michael's warehouse on January 3, 2013. Required 1....
-
Greg Pino, a building contractor, constructs houses in tracts, often building as many as 20 homes simultaneously. He has budgeted costs for an expected number of houses in 2007 as follows: The job...
-
Lepanto Manufacturing Company produces two industrial solvents for which the following data have been tabulated. Fixed manufacturing cost is applied to product at a rate of $1 per machine hour. The...
-
Hambleys Toy Store is on Regent Street in London. It has a magic department near the main door. Management is considering dropping the magic department, which has consistently shown an operating...
Study smarter with the SolutionInn App