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kari74 [83]
3 years ago
9

During fiscal 2016, Shoe Productions recorded inventory purchases on credit of $337.8 million. The financial statement effect of

these purchase transactions would be to: A. Increase liabilities (Accounts payable) by $337.8 million B. Decrease cash by $337.8 million C. Increase expenses (Cost of goods sold) by $337.8 million D. Decrease noncash assets (Inventory) by $337.8 million E. Both A and D
Business
1 answer:
iren2701 [21]3 years ago
6 0

Answer:

A. Increase liabilities (Accounts payable) by $337.8 million

Explanation:

The journal​ entry will be: Inventory (Credit - Increased) 337,860,000 and Accounts payable (Debit - Increased) 337,860,000.

The company must recognize the increase in the Inventory and the medium of payment (Accounts payable).

B is false because this operationn can also be a decrease in cash, but the amount in the operation is too high for this payment medium.

C is false because, the inventory is not sold, and COSG will be increased when the goods are sold.

D is also false because the inventory is increasing, not decreasing.

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2 years ago
Prairie, Inc. produces a single product. It has an annual capacity of 10,000 units, but currently uses only 80% of it. Each unit
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Answer:

Variable cost= $42

Explanation:

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Each unit is sold for $50

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Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the followin
Taya2010 [7]

Answer:

Askew Company

1. Cost of goods sold                     $243,000

2. Adjusting Journal Entries:

Debit Cost of Goods Sold $243,000

Debit Purchases discounts $7,000

Credit Freight-in $19,000

Credit Inventory $231,000

To record the cost of goods sold.

Explanation:

a) Data and Calculations:

Account                                       Debit    Credit

Merchandise inventory, 7/1/17 33,000

Sales                                                     390,000

Sales returns                            13,000

Purchases                             250,000

Purchase discounts                                7,000

Purchase returns                                   11,000

Freight-in                                19,000

Merchandise inventory, 7/1/17        $33,000

Purchases                                       250,000

Purchase discounts                           (7,000)

Purchase returns                              (11,000)

Freight-in                                           19,000

Cost of goods available for sale $284,000

June 30, 2018, inventory balance $41,000

Cost of goods sold                     $243,000

Adjusting Entry:

Debit Cost of Goods Sold $243,000

Debit Purchases discounts $7,000

Credit Freight-in $19,000

Credit Inventory $231,000

To record the cost of goods sold.

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