The beginning inventory of drift boats at Heritage Float Co. and data on purchases and sales for
a three-month period are as follows:Number Per
Date Transaction of Units Unit Total
Aug. 1 Inventory 22 $2,200 $48,400
8 Purchase 18 2,250 40,500
11 Sale 12 4,800 57,600
22 Sale 11 4,800 52,800
Sept. 3 Purchase 16 2,300 36,800
10 Sale 10 5,000 50,000
21 Sale 5 5,000 25,000
30 Purchase 20 2,350 47,000
Oct. 5 Sale 20 5,250 105,000
13 Sale 12 5,250 63,000
21 Purchase 30 2,400 72,000
28 Sale 15 5,400 81,000Instructions
- Record the inventory, purchases, and cost of merchandise sold data in a perpetual inven-
tory record similar to the one illustrated in Exhibit 5, using the first-in, first-out method. - Determine the total sales and the total cost of drift boats sold for the period. Journalize the en-
tries in the sales and cost of merchandise sold accounts. Assume that all sales were on account. - Determine the gross profit from sales of drift boats for the period.
- Determine the ending inventory cost.
Kroger Co.,Safeway Inc.,andWinn-Dixie Stores, Inc., are three large grocery chains in the
United States. Inventory management is an important aspect of the grocery retail business.
The balance sheets for these three companies indicated the following merchandise inventory
information:Merchandise Inventory
Fiscal 2004 End-of- Fiscal 2003 End-of-
Year Balance Year Balance
(in millions) (in millions)
Kroger $4,169 $4,175
Safeway 2,741 2,642
Winn-Dixie 992 1,047The cost of goods sold for each company during fiscal year 2004 was:Cost of Goods Sold for
Fiscal Year 2004
(in millions)
Kroger $39,637
Safeway 25,228
Winn-Dixie 7,819a. Determine the number of days’ sales in inventory and inventory turnover for the three
companies for fiscal year 2004. Round to one decimal place.
b. Interpret your results in (a).292 Chapter 6 Inventories
Exercise 6-18
Inventory turnover and number
of days’ sales in inventory
Goal 9
a. Kroger, 38.4 daysProblem 6-1A
Fifo perpetual inventory
Goals3, 4- $240,100
ACCOUNTING APPLICATION PROBLEMS