Reference no: EM132489849

Best Guy purchases merchandise inventory by the crate; each crate of inventory is a unit. The fiscal year of Best Guy ends each February 28. Assume you are dealing with a single Best Guy store in Halifax, Nova Scotia, and that the store experienced the following: The store began fiscal year 2017 with an inventory of 22,000 units that cost a total of $1, 100,000.

During the year, the store purchased merchandise on account as follows:

Point 1: Cash payments on account totalled $7,874,000. During fiscal year 2017, the store sold 150,000 units of merchandise for $14,400,000. Cash accounted for $5,100,000 of this, and the balance was on account. Best Guy uses the FIFO method for inventories. Operating expenses for the year were $3,250,000. The store paid 80% in cash and accrued the rest as accrued liabilities. The store accrued income tax at the rate of 35%.

Requirements

Question 1. Make summary journal entries to record the store's transactions for the year ended February 28, 2017. Best Guy uses a perpetual inventory system.