In this section, all questions are worth 1 mark unless indicated otherwise. There are 26 marks in total.

Dundas Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account.

		# of	unit cost or
		items	sale price
July 1	Opening balance	45	$30
July 5	Purchase	20	$32
July 7	Purchase of July 5 items returned	-5
July 10	Sale	45	$40
July 12	Purchase	25	$34
July 17	Sale	20	$50
July 24	Purchase	35	$35

REQUIRED:

Use an inventory cost chart and an accounting chart to analyze the above transactions, and then answer the questions below.

ENTRY RULES:

Where you are asked to enter a percentage, enter ONLY the digits. For example, 78 percent must be entered as 78. Do not use a % sign or a decimal point. All such answers will be integers. No rounding is required.

Dollar figures should be entered WITHOUT dollar signs, commas, decimal points or pennies.

How should the July 5 transaction be recorded? (2 marks)

A. increase Purchases, increase Accounts Payable

B. increase Inventory, increase Cost of Goods Sold

C. increase Inventory, increase Accounts Payable

D. increase Purchases, decrease Cash

E. increase Purchases, increase Cost of Goods Sold

F. increase Inventory, decrease Cash

Enter the letter that corresponds to your choice. (A B C D E F)

How will the July 7 purchase return be recorded? (2 marks)

A. decrease Purchases, decrease Accounts Payable

B. decrease Inventory, decrease Accounts Payable

C. increase Purchase Returns, decrease Accounts Payable

D. decrease Purchases, increase Cash

E. decrease Inventory, decrease Cost of Goods Sold

F. increase Purchase Returns, increase Cash

G. decrease Inventory, increase Cash

H. increase Purchase Returns, decrease Cost of Goods Sold

Enter the letter that corresponds to your choice. (A B C D E F G H)

What is the value of the inventory after the July 7 transaction?

How will the July 10 sale be recorded? (4 marks)

A. increase Sales, increase Cost of Goods Sold, increase Inventory, increase Accounts Receivable

B. increase Sales, decrease Cost of Goods Sold, increase Inventory, decrease Accounts Receivable

C. decrease Sales, increase Cost of Goods Sold, increase Inventory, decrease Accounts Receivable

D. increase Service Revenue, increase Cost of Goods Sold, decrease Inventory, increase Cash

E. increase Sales, increase Cost of Goods Sold, decrease Inventory, increase Cash

F. increase Sales, decrease Cost of Goods Sold, increase Inventory, decrease Accounts Payable

G. increase Sales, increase Cost of Goods Sold, decrease Inventory, increase Accounts Receivable

H. increase Sales, increase Cost of Goods Sold, increase Inventory, increase Accounts Payable

Enter the letter that corresponds to your choice. (A B C D E F G H)

What amount of cost of goods sold will be recorded on July 10?

What is the value of the inventory after the July 10 transaction?

What is the gross profit percentage on the July 10 sale?

What is the amount of gross profit on the July 10 sale?

What is the value of the inventory after the July 12 transaction?

What amount of cost of goods sold will be recorded on July 17?

What is the value of the inventory after the July 17 transaction?

What is the gross profit percentage on the July 17 sale?

What is the amount of gross profit on the July 17 sale?

What is the value of the inventory after the July 24 transaction?

What is the total revenue for the month?

What is the total gross profit for the month? (2 marks)

What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $20?

Start your answer with a + sign if an increase, a - sign if a decrease, or enter 0 if no adjustment is needed. (2 marks)

What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $35?

Start your answer with a + sign if an increase, a - sign if a decrease, or enter 0 if no adjustment is needed. (2 marks)