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Ralph's Mini-Mart store in Alpine experienced the following events during the current year: 1
Ralph's Mini-Mart store in Alpine experienced the following events during the current year:
1. Incurred $402,000 in selling costs.
2. Incurred $1,208,000 of administrative costs.
3. Purchased $398,000 of merchandise.
4. Paid $25,000 for transportation-in costs.
5. Took an inventory at year-end and learned that goods costing $188,000 were on hand. This compared with a beginning inventory of $287,000 on January 1.
6. Determined that sales revenue during the year was $3,099,000.
7. Debited all costs incurred to the appropriate account and credited to Accounts Payable. All sales were for cash.
Required:
Give the amounts for the following items in the Merchandise Inventory account:
A. beginning balance
B. Transfer In
C. Ending balance
D. Transfers Out
Expert Solution
A. Beginning Balance = $287,000
B. Transfer In = Purchase+ Direct Expenses
= $398,000 + $25,000
Transfer In = $423,000
C. Ending Balance = $188,000
D. Transferred Out = Opening Balance +Transferred in - Closing Balance
= [($287,000+$423,000) - $188,000]
Transferred Out = $522,000
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