Exercise 6-9
Requirement 1
May 2
Debit
Credit
Inventory
2,500
Accounts Payable
2,500
(Purchase inventory on account)
May 3
Inventory
Cash
May 5
Accounts Payable
Inventory
(Return inventory on account)
May 10
Accounts Payable
2,020
Inventory
101
Cash
1,919
(Pay on account with 5% discount)
($101 = $2,020 × 5%)
May 30
Accounts Receivable
3,650
Sales Revenue
3,650
(Sell inventory on account)
Cost of Goods Sold
Inventory
(Record cost of inventory sold)
Requirement 2
May 24
Debit
Credit
Accounts Payable
2,020
Cash
2,020
(Pay cash on account)
Exercise 6-10
July 5
Debit
Credit
Inventory
67,200
Accounts Payable
67,200
(Purchase inventory on account)
July 8
Accounts Payable
Inventory
(Return inventory on account)
July 13
Accounts Payable
60,800
Inventory
Cash
59,584
July 28
Accounts Receivable
79,800
Sales Revenue
79,800
(Sell inventory on account)
Cost of Goods Sold
59,584
Inventory
(Record cost of inventory sold)
Chapter 06 – Inventory and Cost of Goods Sold
Exercise 6-11
August 6
Debit
Credit
Inventory
6,800
Accounts Payable
6,800
(Purchase inventory on account)
August 7
Inventory
200
Cash
200
(Pay freight-in cost)
August 10
Accounts Payable
Inventory
(Return inventory on account)
August 14
Accounts Payable
6,400
Inventory
320
August 23
Accounts Receivable
Sales Revenue
(Sell inventory on account)
Cost of Goods Sold
4,710
Inventory
Exercise 6-12
August 6
Accounts Receivable
6,800
Sales Revenue
6,800
(Sell inventory on account)
Cost of Goods Sold
(Record cost of inventory sold)
Sales Returns
Accounts Receivable
(Receive return on account)
August 14
Cash
Sales Discounts
Exercise 6-13
Requirement 1
Inventory
Quantity
Lower of Cost
or Market
Ending
Inventory
Furniture
Electronics
Requirement 2
Debit
Credit
Cost of Goods Sold
1,300
Requirement 3
The write-down of inventory has the effects of reducing total assets (inventory),
Exercise 6-14
Requirement 1
Inventory
Quantity
Lower of Cost
or Market
Ending
Inventory
Shirts
52
$ 75
$ 3,900
MegaDriver
12
MegaDriver II
40
$18,860
Requirement 2
Debit
Credit
Cost of Goods Sold
840
Requirement 3
The write-down of inventory has the effects of reducing total assets (inventory),
Chapter 06 – Inventory and Cost of Goods Sold
Exercise 6-15
Requirement 1
Lewis
Clark
Beginning inventory
$ 13,000
$ 16,000
Add: Purchases
132,000
140,000
141,000
128,000
Less: Ending inventory
Requirement 2
Lewis
Clark
Inventory
Requirement 3
Lewis
Clark
Average
365
365
365
Requirement 4
Lewis seems to be managing its inventory more efficiently. For Lewis, inventory turns
Exercise 6-16
Requirement 1
Gross
profita
Operating
Incomeb
Income before
income taxesc
Net
Incomed
Henry
$13,600
$ 8,500
$7,600
$6,300
Grace
James
1,500
Requirement 2
Henry
Grace
James
Gross
Chapter 06 – Inventory and Cost of Goods Sold
Exercise 6-17
Requirement 1
May 2
Purchases
2,500
Accounts Payable
2,500
(Purchase inventory on account)
May 3
Cash
(Pay freight-in cost)
May 5
Accounts Payable
Purchase Returns
(Return inventory on account)
May 10
Accounts Payable
2,020
Purchase Discounts
Cash
($101 = $2,020 × 5%)
May 30
Accounts Receivable
Sales Revenue
3,650
(Sell inventory on account)
Requirement 2
May 31
Debit
Credit
Inventory (ending)
0
Cost of Goods Sold
2,039
Purchase Returns
480
Purchase Discounts
101
Inventory (beginning)
(Record period-end adjustment)
Exercise 6-18
Requirement 1
July 5
Purchases
67,200
Accounts Payable
67,200
(Purchase inventory on account)
July 8
Accounts Payable
Purchase Returns
(Return inventory on account)
July 13
Accounts Payable
60,800
Purchase Discounts
Cash
59,584
($1,216 = $60,800 × 2%)
July 28
Accounts Receivable
79,800
Sales Revenue
79,800
(Sell inventory on account)
Requirement 2
July 31
Debit
Credit
Inventory (ending)
0
Cost of Goods Sold
59,584
Purchase Returns
Purchase Discounts
1,216
Purchases
67,200
Inventory (beginning)
(Record period-end adjustment)
Exercise 6-19
August 6
Debit
Credit
Purchases
6,800
Accounts Payable
6,800
(Purchase inventory on account)
August 7
Cash
August 10
Accounts Payable
Purchase Returns
400
(Return inventory on account)
August 14
Accounts Payable
6,400
Purchase Discounts
320
Cash
5,080
August 23
Accounts Receivable
6,900
Sales Revenue
6,900
Requirement 2
August 31
Debit
Credit
Inventory (ending)
1,570
Cost of Goods Sold
4,710
Purchase Returns
400
Purchase Discounts
Purchases
6,800
Inventory (beginning)
Exercise 6-20
Requirement 1
When goods are shipped FOB destination, title transfers from the seller to the buyer
Requirement 2
Balance Sheet
Income Statement
Year
Assets
Liabilities
Stockholders’
equity
Revenues
Cost of
goods sold
Gross Profit