Accounting Problem (Question 4)

Question 4

Instructions

Refer to Question 4 Instructions.png to complete Parts 1 and 2 of this question, Please use the list of accounts below for the journal entries in Part 1 and 2, and follow all rounding rules indicated in each question.

List of Accounts

• Accounts Payable
• Accounts Receivable
• Allowance to Reduce Inventory to NRV
• Biological Assets
• Buildings
• Cash
• Cost of Goods Sold
• Equipment
• Interest Expense
• Interest Income
• Interest Payable
• Interest Receivable
• Inventory
• Inventory Over and Short
• Land
• Liability for Onerous Contracts
• Loss on Inventory Due to Decline in NRV
• Loss on Purchase Contracts
• No Entry
• Purchase Discounts
• Purchase Discounts Lost
• Purchase Returns and Allowances
• Purchases
• Raw Materials
• Realized Gain or Loss
• Rebate Receivable
• Recovery of Loss on Inventory Due to Decline in NRV
• Refund Liability
• Retained Earnings
• Sales Returns and Allowances
• Sales Revenue
• Supplies Expense
• Unrealized Gain or Loss

Question 4 Instructions.png

Assume Novak uses = periodic system. Prepare all journal entries needed, including the and-of-month adjusting antry to record cost of goods sold. A physical count indicates that the ending inventory for July is 110 units. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit July 31 Assistance Used Calculate gross profit using the periodic system. Gross profit / [loss)Date Account Titles and Explanation Debit Credit (To record sales on account) (To record cost of goods sold) (To record sales on account) (To record cost of goods sold) (To record sales on account) (To record cost of goods sold) Calculate gross profit using the perpetual system.Novak Corporation sells one product, with information for July as follows: July 1 Inventory 100 units at $17.00 each 4 Sale 80 units at $19.00 each 11 Purchase 150 units at $16.00 each 13 Sale 120 units at $18.50 each 20 Purchase 160 units at $17.00 each 27 Sale 100 units at $20.40 each Novak uses the FIFO cost formula. All purchases and sales are on account. Ignore any estimated returns on purchases and sales