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Prepare a T-account to show the activity in the inventory account

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Requirements;1. Make a summary journal entries to record the store's transaction for the year ended January 31, 2012. Better Buy uses a perpetual inventory system.;2. Prepare a T-account to show the activity in the inventory account.;3. Prepare the store's income statement for the year ended January 31, 2012. Show totals for the gross profit, income before tax and net income.;Purchases;Jul (28,000 units at $56)...........................................$1,568,000;Nov (48,000 units at $600)....................................... 2,880,000;Dec(58,000 units at $66).......................................... 3,828,000;Total purchases............................................................. $8,276,000;Better Buy purchases inventory in crates of merchandise, each crate of inventory is a unit. The fiscal year of Better Buy ends each January 31. Assume you are dealing with a single Better store in Cleveland, Ohio. The Cleveland store began 2012 with an inventory of 22,000 units that cost a total of $1,100,000. During the year, the store purchased merchandise on account as follows.;Cash payments on account totaled $7,876,000. During fiscal year 2102, the store sold 154,000 units of merchandise for $14,784,000, of which $4,900,000 was for cash and the balance was on account. Better Buy uses the average-cost method for inventories. Operating expenses for the year were $3,000,000. Better Buy paid 70% in cash and accrued the rest as accrued liabilities. The store accrued income tax as the rate of 40%.;(a.) Record the entry to record the purchases.;(b). Record the cash payments on account.;(c). Record the cash received from sales and the balance on account. (Do not record the cost related to the sale.;(d).Record the inventory transaction associated with the sale of merchandise. (Round unit costs to the nearest cent. Round your answer to the nearest whole dollar.);(e). Now record the operating expenses. (Round your final answers to the nearest whole dollar).;(f).Now record the cash payments on account.;(g).Finally record the entry to accrue income tax. (Round your final answers to the nearest whole dollar.

 

Paper#20434 | Written in 18-Jul-2015

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