Travel Warehouse Ltd distributes suitcases to retail stores

At the #8578
Travel Warehouse Ltd distributes suitcases to retail stores At the

Travel Warehouse Ltd. distributes suitcases to retail stores. At the end of June, Travel
Warehouse's inventory consisted of 60 suitcases purchased at $50 each. Travel Warehouse
uses a perpetual inventory system. During the month of July, the following merchandising
transactions occurred:

July 2 Purchased 75 suitcases on account for $60 each from Trunk Manufacturers Ltd., terms
2/10, n/30.

3 Received a $240 credit from Trunk Manufacturers after returning four suitcases because they
were damaged.

6 Sold 55 suitcases on account to Satchel World Inc. for $90 each, with an average cost of $50,
terms 2/15, n/45.

7 Issued a $270 credit for three suitcases returned by Satchel World because they were the
wrong model. The suitcases were returned to inventory.

9 Sold three suitcases-this time the right model number-on account to Satchel World Inc. for
$100 each, with an average cost of $60, terms 2/15, n/45.

11 Paid Trunk Manufacturers the balance owing.

13 Sold 25 suitcases on account to The Going Concern Limited for $100 each, with an average
cost of $60, terms 2/15, n/45.

16 Purchased 70 suitcases on account for $4,340 from Holiday Manufacturers, terms n/45.

17 Issued a $500 credit for five suitcases returned by The Going Concern because they were
damaged. These suitcases were not restored to inventory.

20 Received payment in full from Satchel World for all transactions.

27 Received payment in full from The Going Concern.

Instructions

(a) Is Travel Warehouse a retailer or a wholesaler? Explain.

(b) Record the July transactions. (Record transactions to the nearest dollar.)
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 (c) Set up a T account for the Inventory account. Enter the opening balance, post the
transactions related to inventory prepared in part (b), and determine the ending balance in the
account.

(d) Determine the number of suitcases Travel Warehouse has on hand on July 31. What is the
average cost of these suitcases on July 31? (Hint: Divide the ending balance in the Inventory
account calculated in part (c) and divide it by the number of suitcases on hand at July 31.
Round your answer to the nearest dollar.)

Travel Warehouse Ltd distributes suitcases to retail stores At the

ANSWER
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