University:
Eastern Kentucky University
Course:
ACC 201 | Introduction to Financial Accounting
Academic year:

2022
Views:

203

Pages:

4
Author:

grosikesf4

SOLUTIONS TO BRIEF EXERCISES 5 BRIEF EXERCISE 5-1 (a) Cost of goods available for sale = $80,000 + $100,000 = $180,000. Ending inventory = $180,000 – $120,000 = $60,000. (b) Purchases = $115,000 – $50,000 = $65,000. Cost of goods sold = $115,000 – $35,000 = $80,000. (c) Beginning inventory = $160,000 – $110,000 = $50,000. Cost of goods sold = $160,000 – $29,000 = $131,000. BRIEF EXERCISE 5-2 (a) Cost of goods sold = $47,000 ($75,000 – $28,000). Operating expenses = $18,200 ($28,000 – $19,800). (b) Gross profit = $38,000 ($108,000 – $70,000). Operating expenses = $8,500 ($38,000 – $29,500). (c) Sales Revenue = $163,500 ($83,900 + $79,600). Net income = $40,100 ($79,600 – $39,500). BRIEF EXERCISE 5-3 Cha Company Inventory............................................................... Accounts Payable........................................ Wirtz Company Accounts Receivable........................................... Sales Revenue.............................................. Cost of Goods Sold............................................. Inventory....................................................... 780 780 780 780 470 470 BRIEF EXERCISE 5-4 (a) Accounts Receivable........................................... Sales Revenue.............................................. Cost of Goods Sold............................................. Inventory....................................................... 900,000 (b) Sales Returns and Allowances........................... Accounts Receivable................................... Inventory............................................................... Cost of Goods Sold...................................... 90,000 (c) Cash ($810,000 – $16,200)................................... Sales Discounts ($810,000 X 2%)....................... Accounts Receivable................................... ($900,000 – $90,000) 793,800 16,200 900,000 590,000 590,000 90,000 62,000 62,000 810,000 BRIEF EXERCISE 5-5 (a) Inventory............................................................... Accounts Payable........................................ 900,000 (b) Accounts Payable................................................ Inventory....................................................... 90,000 900,000 90,000 (c) Accounts Payable ($900,000 – $90,000)............. 810,000 Inventory ($810,000 X 2%)......................................... Cash ($810,000 – $16,200)........................... 16,200 793,800 BRIEF EXERCISE 5-6 Cost of Goods Sold..................................................... Inventory.............................................................. 1,900 1,900 BRIEF EXERCISE 5-7 Sales Revenue............................................................. Income Summary................................................. 195,000 Income Summary......................................................... Cost of Goods Sold............................................. 119,000 195,000 117,000 Sales Discounts................................................... 2,000

Solutions to Brief Exercises 5

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