Steve's Hardware Store Uses the Perpetual Inventory System

question 32

Essay

Steve's Hardware Store uses the perpetual inventory system.The company incurred the following transactions:
a.On November 1,the owner,Steven Moore,purchased 10 snow blowers on account at $1,000 each.Credit terms were 2/10,net 30.
b.On November 2,Steven returned two snow blowers due to damage incurred in shipping.
c.On November 3,the supplier granted Steven an allowance of $100 on the snow blowers because one of the snow blowers was missing an attachment.
d.On November 10,Steven sold three of the snow blowers on account at $1,500 each.The credit terms were 2/10,net 30.
e.On November 12,Steven paid for the snow blowers.
f.On November 13,one customer returned a snow blower because it did not start.
g.On November 30,Steven paid wages of $2,000 for his assistant.
Required:
1.Journalize the above transactions for Steve's Hardware Store.Explanations are not required.

Explain the process of testing goodwill for impairment under FASB ASC and the simplified procedures available for private companies.

Recognize the adjustments required for consolidations, such as adjusting subsidiary's book values to fair values, and the consolidation entries related to these adjustments.

Understand the concept and accounting treatment of goodwill in a business combination.

Comprehend the consolidation process for intercompany transactions, including loans.

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Definitions:

Perpetual Inventory Accounts

An inventory system that continuously keeps track of inventory levels and costs, updating the accounts after each purchase or sale.

Subsidiary Ledgers

Detailed records that support summaries contained in the general ledger, often used for accounts receivable and payable.

Job Order

A request or instruction to perform a specific task, often used in manufacturing or service industries to track costs and work.

Equivalent Units

Equivalent units are a concept in cost accounting used to allocate costs to partially completed goods, treating them as if they were a certain number of fully completed units.