QUESTION1

Sandy's Discount Computer Outlet just opened and uses the Perpetual Inventory system. She purchased 8 identical laptops from Dell. All of them had the same features and model number in addition to being the same size. The laptops do not have serial numbers on them.

1. She purchased two on May 10^thand paid $800 each
2. She purchased one on May 16^thand paid $840
3. She purchased two on May 20^thand paid $720 each
4. She purchased three on May 28^thand paid $780 each

(i)If Sandy uses the FIFO Method of costing inventory, what is the total COGS (Cost of Goods Sold) amount for May if she sells five laptops during the month?

(ii) What is her ending Inventory dollar amount at the end of May if she sells five computers during the month?

(iii) If the selling price of each laptop is $1,100, what is her Gross Margin/Gross Profit and Gross Margin/Profit % in May, assuming five laptops are sold?

QUESTION2

Record all of the journal entries for the following events in the month of July at the new retail Denim clothing store that you just opened. However you can ignore HST. Assume that you use the Perpetual Inventory system. Dates and explanations are not required.

a.Purchased jeans from a U.S. supplier for Cdn. $1500 on credit. You took delivery of the jeans. Your supplier paid for the $50 freight cost of delivery. You agreed to pay for the $100 duty tax at the border.

b.Sold 2 pairs of jeans ($75 each) to a customer for a total of $150 cash. You had purchased the jeans from your supplier for $100 ($50 a pair)

c.You discovered that the jeans you purchased from your U.S. supplier were not the right colour. You contacted your supplier and asked for an allowance, otherwise you would have to return the entire order. Your supplier agreed and granted you a $20 allowance per pair.

d.The customer that you sold 2 pairs of jeans to came back to your store to return one of the pairs of jeans. You agreed and provided a cash refund.

e. Another customer purchased a pair of jeans from you for $75 on line and paid with their VISA card. VISA charges its Reatilers a 2% fee. The Jeans wereshipped FOB Destination Point. Freight charges were $10.

f. At the end of July you took a physical Inventory count and the actual number of jeans in the store was 24.