Question

TsIzzWe (Ts) is a company that purchases T shirts from the manufacturer, Frootyluums (Frooty) and sells them to college students through the college bookstore, Rskoolstore (RSkool). Ts has hired you to be the accountant for the company.

Part 2:
Ts has decided to follow your advice and use the inventory flow method that you recommended with its perpetual inventory system. Using the data provided for transactions that occurred during August, determine the Gross Profit at the end of the period.
1. 8/6     Ts purchased 200 long sleeve blue shirts on account from Frooty for $3 each. Terms FOB-SP   2/10, n30 Shipping costs = $40
2. 8/8       Ts purchased 500 short sleeve blue shirts on account from Frooty for $2.50 each. Terms FOB-D 2/15, n30 Shipping costs = $50
3. 8/10      Ts notified Frooty that 50 of the long sleeve shirts were purple. After negotiation, Frooty agreed to reduce the price of those shirts to $2 each. Ts agreed to keep the shirts.
4. 8/11      Ts purchased 400 long sleeve blue shirts on account from Frooty for $3.50 each. Terms FOB-D n/eom Shipping costs = $40
5. 8/12      Ts sold 290 long sleeve blue shirts to RSkool on account for $8 each.Terms FOB-SP    1/10, n30 Shipping costs = $30
6. 8/14      Ts paid for the purchase on the 6th.
7. 8/16      Ts sold 20 long sleeve purple shirts to RSkool on account for $5 each. Terms FOB-D 2/10, n/eom Shipping costs = $5
8. 8/18      Ts paid for the short sleeve shirts
9. 8/20      Ts sold 380 short sleeve shirts to RSkool on account for $7 each. Terms FOB-SP n/eom   Shipping costs = $38
10. 8/21      Ts received payment from RSkool for the long sleeve blue shirts
11. 8/22      RSkool returned 100 of the short sleeve shirts because they were too small.
12. 8/24      Ts sold 200 long sleeve blue shirts to RSkool on account for $8 each. Terms FOB-D   3/5, n/30 Shipping costs = $30
13. 8/29      Ts received payment from RSkool for the purchase on the 24th
14. 8/30      Ts received payment from RSkool for the purple shirts.
15. 8/31      Ts received payment from RSkool for the purchase on the 20th
16. 8/31      Ts paid for the purchase on the 11th.

Part 3:
Ts had used the periodic inventory system prior to switching to the perpetual inventory system.   Using the data provided for transactions that occurred during that time, determine the Gross Profit for that period using the Average Cost Inventory Flow Method.

Ts performed a manual count on May 31st. Ts used the Periodic Average Cost Inventory Method
Using the following data, determine the Gross Profit for Ts during the month of May.
During the month of May,
Ts sold Long Sleeve Blue Shirts for $7.50
Ts sold Short Sleeve Blue Shirts for $6.50

May 1: Inventory Balance: Long Sleeve (LS)Blue Shirts: 180 @ $3
    Inventory Balance: Short Sleeve (SS) Blue Shirts:           55 @ $2

May 5 Purchase: 40 LS Blue @ 3.50
May 5 Purchase: 25 SS Blue @ 2.25
May 9 Purchase: 100 LS Blue @ 3.70
May 13    Purchase: 300 SS Blue @ 2.40
May 15 Purchase: 200 SS Blue @ 2.42
May 20 Purchase: 50 SS Blue @ 2.45
May 24 Purchase: 144 SS Blue @ 2.50
May 27    Purchase: 300 SS Blue @ 2.52
May 30    Purchase: 250 LS Blue @ 4.00

May 30: Inventory Balance: Long Sleeve Blue Shirts: 195
Inventory Balance: Short Sleeve Blue Shirts: 124

Solution Preview

This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.

Accounting Questions

This is only a preview of the solution. Please use the purchase button to see the entire solution

Related Homework Solutions

Accounting Questions
Homework Solution
$18.00
Business
Accounting
Inventory
Values
Cost
FIFO. LIFO
Balance
Tax
Income
Debt
Accounting Questions
Homework Solution
$30.00
Accounting
Business
Finance
Economy
Assets
Stocks
Interest Rate
Average Return
Recession
Inflation
Variance
Standard Deviation
Correlation
Business Questions: iPod and iPad Division
Homework Solution
$13.00
Business
Accounting
Administration
Finance
Economy
Variable Costs
Fixed Costs
Contribution Margin
Net Income
Sales Mix Percentage
Contribution Margin Ratio
Business Questions
Homework Solution
$35.00
Accounting
Business
Economy
Finance
Management
Administration
Balances
T Accounts
Manufacturing Wages
Material Inventory
Labor
Transactions
Journals
Costs
Production
Closing Balance
Cash
Get help from a qualified tutor
Live Chats