Fido, the owner's dog, ate some papers! Later, it was discovered that those were accounting records...

  

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Fido, the owner's dog, ate some papers! Later, it was discovered that those were accounting records for the perpetual inventory system. Because the dog ate the records for the perpetual method, they have to resort to using a periodic method of inventory costing. A physical count showed 835 bags remaining in inventory. Required: 1. Calculate cost of good available for sale. 2. Compute ending inventory and cost of goods sold using the FIFO method of inventory. 3. Compute ending inventory and cost of goods sold using the LIFO method of inventory. 4. Prepare T-Accounts showing your method of choice. 5. Prepare a new Adjusted Trial Balance using the inventory method that provides the highest cost of goods sold and highlight the accounts and amounts changed. 6. Write a full sentence statement explaining why the accountant would recommend using the inventory method that results in the highest cost of goods sold. 7. Complete a partial Multistep Income Statement up through Gross Margin. (NOTE: This is an expanded format. See examples.) Account Title Cash Accounts Receivable Inventory Supplies Prepaid Insurance Equipment Vehicle Less: Accumulated Depreciation - Equipment & Vehicle Accounts Payable Unearned Revenue (Gift Cards) Date 01-Sep Sept Oct Nov Dec Bonds Payable (mature 12/31/XX) Common Stock (200 shares @ $210/share, par $210) Retained Earnings Sales Revenue Less: Sales Discount Cost of Goods Sold Operating Expenses Depreciation Expense Insurance Expense Rent Expense Supplies Expense Wages Expense Totals Fido's Food Mart Adjusted Trial Balance December 31, 20XX Inventory Data for Dog Food Qty. Beg. Inv. Purchase Purchase Purchase Purchase 0 40 349 1,500 1,690 Debits 52,898 12,250 83,720 650 320 30,550 12,250 40 1,000 34,840 0 Credits 0 62,128 275 12,000 42,000 0 134,725 160 5,750 1,200 15,500 251,128 251,128 Cost each $0.00 $25.00 $30.00 $20.00 $25.00 Fido, the owner's dog, ate some papers! Later, it was discovered that those were accounting records for the perpetual inventory system. Because the dog ate the records for the perpetual method, they have to resort to using a periodic method of inventory costing. A physical count showed 835 bags remaining in inventory. Required: 1. Calculate cost of good available for sale. 2. Compute ending inventory and cost of goods sold using the FIFO method of inventory. 3. Compute ending inventory and cost of goods sold using the LIFO method of inventory. 4. Prepare T-Accounts showing your method of choice. 5. Prepare a new Adjusted Trial Balance using the inventory method that provides the highest cost of goods sold and highlight the accounts and amounts changed. 6. Write a full sentence statement explaining why the accountant would recommend using the inventory method that results in the highest cost of goods sold. 7. Complete a partial Multistep Income Statement up through Gross Margin. (NOTE: This is an expanded format. See examples.) Account Title Cash Accounts Receivable Inventory Supplies Prepaid Insurance Equipment Vehicle Less: Accumulated Depreciation - Equipment & Vehicle Accounts Payable Unearned Revenue (Gift Cards) Date 01-Sep Sept Oct Nov Dec Bonds Payable (mature 12/31/XX) Common Stock (200 shares @ $210/share, par $210) Retained Earnings Sales Revenue Less: Sales Discount Cost of Goods Sold Operating Expenses Depreciation Expense Insurance Expense Rent Expense Supplies Expense Wages Expense Totals Fido's Food Mart Adjusted Trial Balance December 31, 20XX Inventory Data for Dog Food Qty. Beg. Inv. Purchase Purchase Purchase Purchase 0 40 349 1,500 1,690 Debits 52,898 12,250 83,720 650 320 30,550 12,250 40 1,000 34,840 0 Credits 0 62,128 275 12,000 42,000 0 134,725 160 5,750 1,200 15,500 251,128 251,128 Cost each $0.00 $25.00 $30.00 $20.00 $25.00

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