Racers ATVs sells many makes and models of all-terrain vehicles. Racers uses a perpetual inventory...
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Accounting
Racers ATVs sells many makes and models of all-terrain vehicles. Racers uses a perpetual inventory system.
On January 1, Racers had a beginning inventory of AXVs costing $35,500. On January 14, Racers received a shipment of Model AXVs with a purchase price of $18,800 and transportation costs of $400. On May 19, Racers received a second shipment of AXVs with a purchase price of $18,900 and transportation costs of $400. On November 1, Racers received its before-Christmas shipment of AXVs with a purchase price of $24,800 and transportation costs of $550.
Make the necessary journal entries for January 14, May 19, and November 1 to show the purchase of the inventory (assume they paid cash). Assume that a physical inventory count on December 31 showed an ending inventory of AXVs of $22,800.
Determine cost of goods sold for the AXV model for the year. If sales of AXVs were $99,900, what profit did Racers make on this model?
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