Please write in table form, like the question for easy understanding. Thanks. Re
ID: 2330122 • Letter: P
Question
Please write in table form, like the question for easy understanding. Thanks.
Required information [The following information applies to the questions displayed below. The beginning account balances for Terry's Auto Shop as of January 1, 2018, follows: Account Titles Cash Inventory Common Stock Retained Earnings Beginning Balance $6,140 3,120 7,460 1,800 The following events affected the company during the 2018 accounting period 1. Purchased merchandise on account that cost $4,280. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $265 cash. 3. Returned $500 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received an $265 allowance. 5. Sold merchandise that cost $2,600 for $4,820 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $190 cash. 7. Paid $2,900 on the merchandise purchased in Event 1.Explanation / Answer
Answer
>Find ending Inventory balance,
>Calculate ending balance for Cash and Accounts Payable for understanding purposes.
Working #1: Calculation of Ending Inventory
Beginning Inventory Balance
$ 3,120.00
Purchases (1)
$ 4,280.00
Freight In (2)
$ 265.00
Purchase Return (3)
$ (500.00)
Purchase Allowances (4)
$ (265.00)
Cost of Inventory Sold
$ (2,600.00)
Ending Inventory Balance
$ 4,300.00
Working #2
Cash
Accounts Payable
Beginning Balance
$ 6,140.00
$ -
(1)
$ 4,280.00
(2)
$ (265.00)
(3)
$ (500.00)
(4)
$ (265.00)
(5)
$ 4,820.00
(6)
$ (190.00)
(7)
$ (2,900.00)
$ (2,900.00)
Ending Balance
$ 7,605.00
$ 615.00
Income Statement
Sales revenue (5)
$ 4,820.00
Cost of Goods Sold (5)
$ 2,600.00
Gross Profits
$ 2,220.00
Operating Expenses:
Frieght Out / Selling Expenses (6)
$ 190.00
Net Income
$ 2,030.00
Cash Flow Statement
Cash Flow from Operating Activities
Cash paid for Freight Inwards
$ (265.00)
Cash received from Sale
$ 4,820.00
Cash paid for Selling expense - Freight
$ (190.00)
Cash paid to supplier for merchandise purchased
$ (2,900.00)
Net Cash flow from Operating Activities
$ 1,465.00
Cash flow from investing activities
$ -
Cash flow from financing activities
$ -
Net Change in Cash
$ 1,465.00
Beginning Cash Balance
$ 6,140.00
Ending Cash Balance
$ 7,605.00
Working #1: Calculation of Ending Inventory
Beginning Inventory Balance
$ 3,120.00
Purchases (1)
$ 4,280.00
Freight In (2)
$ 265.00
Purchase Return (3)
$ (500.00)
Purchase Allowances (4)
$ (265.00)
Cost of Inventory Sold
$ (2,600.00)
Ending Inventory Balance
$ 4,300.00