Scribd
Upload
11 views3 pages

Inventory Accounting Questions and Solutions

The document presents components of Bradley Company's income statement, revealing missing amounts for cost of goods sold, operating expenses, and net income, which are calculated as $40,000, $18,000, $145,000, and $11,000 respectively. It also outlines journal entries for Kelly Carpet Company, detailing transactions for purchasing merchandise, returning damaged goods, and payment within discount terms. The entries reflect a perpetual inventory system with specific amounts recorded for inventory and accounts payable.

Uploaded by

K
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
11 views3 pages

Inventory Accounting Questions and Solutions

The document presents components of Bradley Company's income statement, revealing missing amounts for cost of goods sold, operating expenses, and net income, which are calculated as $40,000, $18,000, $145,000, and $11,000 respectively. It also outlines journal entries for Kelly Carpet Company, detailing transactions for purchasing merchandise, returning damaged goods, and payment within discount terms. The entries reflect a perpetual inventory system with specific amounts recorded for inventory and accounts payable.

Uploaded by

K
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Questions for Inventory

Question1:

Presented here are the components in Bradley Company’s income statement.


Determine the missing amounts.

Sales Cost of GrossOperating Net


Revenue Goods Sold _Profit Expenses Income
$75,000 (a) $35,000 (b) $17,000
(c) $86,000 $59,000 $48,000 (d)

Solution (5 min.)
a.$40,000
b.$18,000
c. $145,000
d.$11,000
Question 2:

Prepare the necessary journal entries on the books of Kelly Carpet Company to
record the following transactions, assuming a perpetual inventory system (you may
omit explanations):
(a) Kelly purchased $45,000 of merchandise on account, terms 2/10, n/30.
(b) Returned $3,000 of damaged merchandise for credit.
(c) Paid for the merchandise purchased within 10 days.

Solution (5 min.)
(a) Inventory 45,000
Accounts Payable 45,000
(b) Accounts Payable 3,000
Inventory 3,000
(c) Accounts Payable ($45,000 – $3,000) 42,000
Revenue (42,000 × .02) 840
Cash ($42,000 – $840) 41,160

You might also like