COST ACC.. CH2 .. DR.Z.

Solutions for Exercises

Exercise 2.1 Reorder Point
8,000 lbs. x 12 days lead time = 96,000 lbs.
8,000 lbs. x 3 days safety stock = 24,000 lbs.
120,000 lbs.

Exercise 2.2 Economic Order Quantity

2 x 8,000 x $5 10,000 = 100 couplings

$8

Exercise 2.3 Ending Balance of Materials

Beginning Balance 183
Plus: Received 225
Less: Issued (159)
Units Available 249 x $12.50 per unit = $3,112.50

Exercise 2.4 Gross Amount of Disbursement Voucher

Purchase Invoice $25,840
Less: Debit Memorandum (1,100)
Gross Amount of Voucher $24,740

Exercise 2.5 Net Amount of Disbursement Vouchers

(a) Purchase Invoice $25,730.00
Less: Debit Memorandum (1,380.00)
Gross Amount of Voucher $24,350.00
Less: Discount (730.50) ($24,350 x .03)
Net Amount of Disbursement Voucher $23,619.50
(b) Purchase Invoice $125,703.00
Less: Debit Memorandum (5,460.00)
Gross Amount of Voucher $120,243.00
Less: Discount (4,809.72) ($120,243 x .04)
Net Amount of Disbursement Voucher $115,433.28

Exercise 2.6 Responsible Departments

(a) Storeroom Supervisor
(b) Purchasing Department
(c) Accounting Department (Voucher Clerk)
(d) Treasurers Department or Accounting Department
(e) Storeroom (Receiving Clerk)

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Problem 2-2A

GENERAL JOURNAL Page 10

POST.
DATE DESCRIPTION OF ENTRY REF. DEBIT CREDIT
200
6
Oct. 2 Raw materials 9 2 2 3 50
4 Vouchers Payable 0 9 2 2 3 50
Recorded voucher to Westmoreland County 0
corporation
on invoice of October 21 for 4,800 units, of which
510 were
2 returned
Vouchers Payable 9 2 2 3 50
5 Purchases Discounts 0 9223
Cash 913125
6
Recorded payment of Voucher 10-141 5
Note: No journal entries are needed
for
the transactions on October 4, 5, and
21.

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Problem 2-4A

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Problem 2-2B

GENERAL JOURNAL Page 10

DATE DESCRIPTION OF ENTRY POST.REF. DEBIT CREDIT
200
6
June 2 Raw Materials 9 5 1 60
. 4 Vouchers Payable 0 9 5 1 60
Recorded voucher to Scaliece Associates on invoice of June 23 0
for 1850 units of which 20 were
2 returned.
Vouchers Payable 9 5 1 60
5 Purchases Discounts 0 1903
Cash 2
93256
Recorded payment of Voucher 6-62 8
Note: No journal entries are needed for the transactions
on
June 3, 4, and
23.

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Problem 2-4B