336 P 8-1 LO 1 Part 2 Operating Activities 1. Compute the number of days' sales...

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336 P 8-1 LO 1 Part 2 Operating Activities 1. Compute the number of days' sales in inventory. 2. Compute the ending balance in Accounts Receivable. 3. Compute the number of days' purchases in accounts payable. 4. How many days elapse, on average, between the time Dallen must pay its suppliers for inventory purchases and the time Dallen collects cash from its customers for the sale of that same purchased inventory? Repeat the computations in (1), (2), (3), and (4) using the end-of-year balance sheet balances rather than the average balances. P 8-3 LO2 Problems What Should Be Included in Inventory? Howard is trying to compute the inventory balance for the December 31, 2017, financial statements of his automotive parts shop. He has computed a tentative balance of NT$61,800 but suspects that several adjustments still need to be made. In particular, he believes that the following could affect his inventory balance: a. A shipment of goods that cost NT$2,000 was received on December 28, 2017. It was properly recorded as a purchase in 2017 but not counted with the ending inventory. b. Another shipment of goods (FOB destination) was received on January 2, 2018, and cost C. NT$1,200. It was properly recorded as a purchase in 2018 but was counted with 2017's ending inventory. A NT$3,400 shipment of goods to a customer on January 3 was recorded as a sale in 2018 but was not included in the December 31, 2017, ending inventory balance. The goods cost NT$2,300. d. The company had goods costing NT$8,000 on consignment with a customer, and NT$6,000 of merchandise was on consignment from a vendor. Neither amount was included in the NT$61,800 figure. e. The following amounts represent merchandise that was in transit on December 31, 2017, and recorded as purchases and sales in 2017 but not included in the December 31 inventory. Ordered by Howard, NT$2,600, FOB destination PE 1. 2. Ordered by Howard, NT$900, FOB shipping point 3. Sold by Howard, cost NT$3,400, FOB shipping point 4. Sold by Howard, cost NT$5,100, FOB destination Required: P 8-2 LO 2 1. Determine the correct amount of ending inventory at December 31, 2017. 2. Assuming net purchases (before any adjustment, if any) totaled NT$79,200 and beginning inventory (January 1, 2017) totaled NT$38,700, determine the cost of goods sold in 2017. Perpetual and Periodic Journal Entries The following transactions for Goodmonth Tire Company occurred during the month of March 2017: Purchased 500 automobile tires on account at a cost of HK$40 each for a total of HK$20,000. a. b. Purchased 300 truck tires on account at a cost of HK$80 each for a total of HK$24,000. Returned 12 automobile tires to the supplier because they were defective. C. d. Paid for the automobile tires. e. Paid for half the truck tires. f. Paid the remaining balance owed on the truck tires. g. Sold on account 400 automobile tires at a price of HK$90 each for a total of HK$36,000. h. Sold on account 200 truck tires at a price of HK$150 each for a total of HK$30,000. Accepted return of 7 automobile tires from dissatisfied customers. i. F LO 336 P 8-1 LO 1 Part 2 Operating Activities 1. Compute the number of days' sales in inventory. 2. Compute the ending balance in Accounts Receivable. 3. Compute the number of days' purchases in accounts payable. 4. How many days elapse, on average, between the time Dallen must pay its suppliers for inventory purchases and the time Dallen collects cash from its customers for the sale of that same purchased inventory? Repeat the computations in (1), (2), (3), and (4) using the end-of-year balance sheet balances rather than the average balances. P 8-3 LO2 Problems What Should Be Included in Inventory? Howard is trying to compute the inventory balance for the December 31, 2017, financial statements of his automotive parts shop. He has computed a tentative balance of NT$61,800 but suspects that several adjustments still need to be made. In particular, he believes that the following could affect his inventory balance: a. A shipment of goods that cost NT$2,000 was received on December 28, 2017. It was properly recorded as a purchase in 2017 but not counted with the ending inventory. b. Another shipment of goods (FOB destination) was received on January 2, 2018, and cost C. NT$1,200. It was properly recorded as a purchase in 2018 but was counted with 2017's ending inventory. A NT$3,400 shipment of goods to a customer on January 3 was recorded as a sale in 2018 but was not included in the December 31, 2017, ending inventory balance. The goods cost NT$2,300. d. The company had goods costing NT$8,000 on consignment with a customer, and NT$6,000 of merchandise was on consignment from a vendor. Neither amount was included in the NT$61,800 figure. e. The following amounts represent merchandise that was in transit on December 31, 2017, and recorded as purchases and sales in 2017 but not included in the December 31 inventory. Ordered by Howard, NT$2,600, FOB destination PE 1. 2. Ordered by Howard, NT$900, FOB shipping point 3. Sold by Howard, cost NT$3,400, FOB shipping point 4. Sold by Howard, cost NT$5,100, FOB destination Required: P 8-2 LO 2 1. Determine the correct amount of ending inventory at December 31, 2017. 2. Assuming net purchases (before any adjustment, if any) totaled NT$79,200 and beginning inventory (January 1, 2017) totaled NT$38,700, determine the cost of goods sold in 2017. Perpetual and Periodic Journal Entries The following transactions for Goodmonth Tire Company occurred during the month of March 2017: Purchased 500 automobile tires on account at a cost of HK$40 each for a total of HK$20,000. a. b. Purchased 300 truck tires on account at a cost of HK$80 each for a total of HK$24,000. Returned 12 automobile tires to the supplier because they were defective. C. d. Paid for the automobile tires. e. Paid for half the truck tires. f. Paid the remaining balance owed on the truck tires. g. Sold on account 400 automobile tires at a price of HK$90 each for a total of HK$36,000. h. Sold on account 200 truck tires at a price of HK$150 each for a total of HK$30,000. Accepted return of 7 automobile tires from dissatisfied customers. i. F LO