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Record the cash collected for membership fees

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Reference no: EM132468973

Costco Wholesale Corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at 471 locations across the U.S. as well as in Canada, Mexico and Puerto Rico. As of its fiscal year-end 2005, Costco had approximately 21.2 million members. Selected fiscal-year information from the company's balance sheets follows. ($ millions).

Selected Balance Sheet Data              ($ millions) 2005 and 2004

Merchandise inventories                      $4,015 for 2005 and $3,644 for 2004.

Deferred membership income (liability)    $501 for 2005 and $454 for 2004

Question (a) During fiscal 2005, Costco collected $1,120 cash for membership fees. Use the financial statement effects template to record the cash collected for membership fees.

Question (b) In 2005, Costco recorded $46,347 million in merchandise costs (that is, cost of goods sold). Record this transaction in the financial statement effects template.

Question (c) Determine the value of merchandise that Costco purchased during fiscal-year 2005. Use the financial statement effects template to record these merchandise purchases. Assume all of Costco's purchases are on credit.

Reference no: EM132468973

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