Question

Required information Great Adventures Problem AP6-1 [The following information applies to the questions displayed below.] Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $510 each. Jul. 17 Purchased 60 watches for $9,600 Jul. 31 Sold 50 watches for $25,500 cash Aug. 12 Purchased 50 watches for $8,500 ($170 per watch) cash Aug. 22 Sold 40 watches for $20, 400 on account Sep. 19 Paid for watches purchased on July 17 Sep. 27 Receive cash of $15,000 for watches sold on account on August 22 Oct. 27 Purchased 90 watches for $16, 200 ($180 per watch) cash Nov. 20 Sold 100 watches for $51, 000 cash $160 per watch) on account 4 Purchased 120 watches for $22,800 ($190 per watch) on account 8 Sold 50 watches for $25,500 on account. Dec Dec

Answer 1

1-a) Calculation of cost of goods available for sale

Date		Units	Unit cost	Total costs
Jul 17	Purchases	60	$160	$9600
Aug 12	Purchases	50	$170	8500
Oct 27	Purchases	90	$180	16200
Dec 4	Purchases	120	$190	22800
	Total	320		$57100

Sales units= 50+40+100+50= 240 units

Sales= 240*$510= $122400

Ending inventory units= Total units-Sales units

= 320-240= 80 units

Ending inventory= 80*$190= $15200

Cost of goods sold= Cost of goods available for sale-Ending inventory

= $57100-15200= $41900

Sales	$122400
Cost of goods sold	$41900
Ending inventory	$15200

1-b)

GREAT ADVENTURES, INC.
Partial Income Statement
For the Year Ended December 31, 2022
Sales	$122400
Cost of goods sold	(41900)
Gross profit	$80500