Chelsea's Junk Shack has got Who's-Its and What's-Its galore. Oh, you want Thingamabobs? Well, they had 20 of them in their inventory at the beginning of May, recorded at a cost of $25
each. On July 7th, the company purchased 15 Thingamabobs for $405. On July 9th, they
purchased another 12 for $21 each. On July 14th, the company sold 30 Thingamabobs for $30
each. Then on July 17th, they purchased another 8 Thingamabobs for $208. On July 22nd, they
sold 10 more Thingamabobs for $35 each.
Recently demand has dropped, since Thingamabobs have been linked to recent outbreaks of
ignorance and bigotry. Next month, Chelsea's Junk Shack plans to sell off the rest of its
Thingamabobs for $10.00 each. Note that the company uses a perpetual inventory system, and
uses the weighted average cost assumption.
Assuming the company only sells Thingamabobs, answer the following
questions:
25
x 20
900
1. What is the Cost of Goods Sold for the month of May? What is its gross profit?
asoom the conoscono
2. What is the value of ending inventory?
3. Suppose they record $400 less COGS than they should. What effect will this
have on next month's net income, assuming they report the correct ending
inventory next month?
4. What would the COGS be for May, assuming that the company instead used the
FIFO cost assumption?

Fred smithers, a recent college graduate decided to open his own portable juice bar, smithers smoothies, to wheel around newport beach. you, a trusted friend of fred, are a business major that has also recently graduated and agreed to handle the books for a while to get some practical experience and have a favor that you can ask of fred in the future. given the following five transactions concerning the new venture, prepare the necessary journal entries for the transactions, post the journal entries to appropriate t accounts and prepare a trial balance as of the end of the month in order to answer to the necessary may 2: fred invests $12,000 of his own money to start the new company. this money was obtained from a part-time job working at a legal firm while he was in school. may 3: fred spent $5,100 cash to purchase a refrigerated trailer that he can pull behind his car and set up at the beach. under your advice, fred agrees to place the new asset under an account called "equipment." may 6: fred bought $640 of supplies on account from the flav-o-rite confectioners company. because they will last longer than a single accounting period fred agrees to record them as, "supplies" as per your suggestion. may 13: fred sat on the beach for six hours without a single sale and was feeling very down. right before he left, however, a plumber escorting his family reunion along the beach stopped by his stand and bought $800 worth of smoothies for the entire family. under your advice, fred agrees to call this cash revenue, "sales." may 15: excited about his new venture, fred withdraws $350 from the company to take his girlfriend out to dinner. what would be the balance in the cash account at the end of the period following the posting of all the transactions?