Inferring Transactions from Financial Statements Costco Wholesale Corporation op
ID: 2455775 • Letter: I
Question
Inferring Transactions from Financial Statements Costco Wholesale Corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at locations across the U.S. as well as in Canada, the United Kingdom, Japan, Australia, South Korea, Taiwan, Mexico and Puerto Rico. As of its fiscal year-end 2008, Costco had approximately 53.5 million members. Selected fiscal-year information from the company's balance sheets follows. ($ thousands). Selected Balance Sheet Data 2009 2008 Merchandise inventories $5,039 $4,879 Deferred membership income (liability) 748 692 (a) During fiscal 2008, Costco collected $1,562 cash for membership fees. Use the financial statement effects template to record the cash collected for membership fees. (b) In 2008, Costco recorded $63,503 in merchandise costs (that is, cost of goods sold). Record this transaction in the financial statement effects template. (c) Determine the value of merchandise that Costco purchased during fiscal-year 2008. Use the financial statement effects template to record these merchandise purchases. Assume all of Costco's purchases are on credit.
Explanation / Answer
Number of members =53500000
Inventories= 5039 , 4879
Deferred membership income =748692
To Membership Fees A/C 1562
To Merchandise A/C 63503
Inventory 2008 = 4879
Sold =63503
Cost of goods sold =Opening stock + Purchases -Closing stock
63503 =4879+Purchases -5039
Purchases =63663
Inventory A/C Dr 63663
To Creditors A/C 63663