Reference no: EM132522012
Question - Orlando Store has the following balances:
On January 1, the company had an inventory of 35,000 unit of merchandise at a cost of $ 11 per unit.
On February 1, the company purchased 25,000 units of merchandises at $ 12.5 each from Brandon Corporation, FOB Shipping Point, term 3 /15, n/30.
On February 2, Orlando paid the freight cost for $ 750.
On February 8, received credits of $ 12,500 for the return of 1,000 merchandises purchased on February 1 were defective
On February 15, Paid Brandon Corporation in full, less discount
On February 20, Sold 12,500 units of merchandises for $ 15 each to Brendon Shop, term 2/10,n/30
On March 5, Sold 11,500 units of merchandises for $ 16 each to Bill Ltd, term 2/10/ n/30.
On March 7, issued a credit memo to Bill Ltd for the return of 1,500 defective merchandises.
On April 4 received payment in full from Bill Ltd.
On April 15, purchased 15,000 units of merchandises for $ 13 each from Brad Suppliers, term 3/15, n/30
On April 30, paid Brad Suppliers in full, less discount
On May 18, Sold 27,000 units of merchandises for $ 18 each to Ben Sports, term n/eom.
On May 31, received payment in full from Ben Sport
On June 1, Sold 10,000 unit of merchandises for $ 18 to Benjamin Clothes, term 2/10, n/30
On June 15, purchased 12,000 units of merchandises for $ 14 each from Brad Suppliers.
Required -
Journalize these transactions for Orlando Store. Orlando Store uses perpetual inventory system for its inventory.
Compute ending inventory using three cost flow methods (FIFO, LIFO, and Weighted Average Cost), and then determine which one is the best cost method for Orlando Store's inventory, explain why?
Orlando Store took a physical inventory on June 30, and determined that goods costing $ 280,000 were on hand. This is not included in the physical count of goods purchased from Brad Supplies on June 15, FOB Shipping point, and $ 120,000 of merchandises sold to Benjamin Clothes, FOB destination. Both Brad purchased and Benjamin sales were in transit at year-end. What the amount should Orlando report as its June 30 inventory?
The trial balance of Orlando Store at June 31 shows additional information; interest revenue of $ 25,000, Utilities expenses of $ 35,000, and Salary and Wages Expenses $ 55,350. Prepare the entries to record the closing entries for these accounts to Income Summary.