11. Tillman, Inc. merchandises a single product and data on purchases and
sales on July, 2012, are listed below. Tillman closes his books at the end of
each month and uses the periodic inventory system.
(A) Please prepare journal entries (in good form) for the following
transactions. If no entry is required, write “no entry.”
(B) Please prepare the T-accounts for the following transactions.
(C) Please compute the cost of goods available for sale, ending inventory
and cost of goods sold, gross margin, and income before taxes under each of
three methods: (a) average-cost, (b) LIFO, and (c) FIFO. (Note: Round to
integer)
(D) Please prepare the multistep income statement for the month July under
each of three methods: (a) average-cost, (b) LIFO, and (c) FIFO.
July 1 Beginning inventory 80 units @ $28
3 Purchased 100 units @ $32 on credit, terms 5/10, n/60.
6 Returned 10 units of the goods purchased on July 3.
7 Paid freight charges of $160 on goods purchased on July 3.
12 Paid for the goods purchased on July 3.
12 Purchased 100 units @ $36 on credit, terms 5/10, n/30.
17 Paid for the goods purchased on July 12.
18 Sold 240 units @ $60 goods on credit for $14,400, terms 1/10, n/30, FOB
destination.
18 Paid for freight costs of the sale on July 18, $200.
21 The customer of July 18 returned 20 units of the goods.
26 Received payment from the customer of July 18.
26 Paid for Selling and administrative expenses for $1,000.