Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff Inventory and purchases are as follows: Inventory, January 1, 20X7 Purchases during 20x7 Inventory, December 31, 20X7 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: Fourth quarter of 20X6 January 1, 20X7 Average during 20x7 Fourth quarter of 20x7 December 31, 20X7 € 226,000 866,000 194,000 €1-$1.29015 €1-$1.32030 €151.39655 €1-$1.45000 € 1$ 1.47280 Required: a. Show the remeasur ent of cost of goods sold for 20X7, assuming that the U.S. dollar is the functional currency. Note: Round your intermediate calculations and final answer to nearest dollar amount. b. Show the translation of cost of goods sold for 20X7, assuming that the euro is the functional currency. Note: Round your final answer to nearest dollar amount. a. Cost of goods sold b. Cost of goods sold Answer is complete but not entirely correct. $ 1,254,102 $ 1,219,686

Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff Inventory and purchases are as follows: Inventory, January 1, 20X7 Purchases during 20x7 Inventory, December 31, 20X7 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: Fourth quarter of 20X6 January 1, 20X7 Average during 20x7 Fourth quarter of 20x7 December 31, 20X7 € 226,000 866,000 194,000 €1-$1.29015 €1-$1.32030 €151.39655 €1-$1.45000 € 1$ 1.47280 Required: a. Show the remeasur ent of cost of goods sold for 20X7, assuming that the U.S. dollar is the functional currency. Note: Round your intermediate calculations and final answer to nearest dollar amount. b. Show the translation of cost of goods sold for 20X7, assuming that the euro is the functional currency. Note: Round your final answer to nearest dollar amount. a. Cost of goods sold b. Cost of goods sold Answer is complete but not entirely correct. $ 1,254,102 $ 1,219,686

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff’s inventory and purchases are as follows: Inventory, January 1, 20X7 € 230,000 Purchases during 20X7 858,000 Inventory, December 31, 20X7 183,000 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: Fourth quarter of 20X6 € 1 = $ 1.29015 January 1, 20X7 € 1 = $ 1.32030 Average during 20X7 € 1 = $ 1.39655 Fourth quarter of 20X7 € 1 = $ 1.45000 December 31, 20X7 € 1 = $ 1.47280 Required: Show the remeasurement of cost of goods sold for 20X7, assuming that the U.S. dollar is the functional currency. Note: Round your intermediate calculations and final answer to nearest dollar amount. Show the translation of cost of goods sold for 20X7, assuming that the euro is the…
Austin Powers plc, the British subsidiary of a U.S. company reported cost of goods sold in Great Britain Pounds for the current year ended December 31. The beginning inventory was £18300, and the ending inventory was £15100. Purchases of £22600 were made evenly throughout the year. Spot rates for various dates are as follows: Date the beginning inventory was acquired Rate at the start of the year £1 = $1.11 £1 = $1.11 £1 = $1.14 £1 = $1.18 Average rate for the year Date the ending inventory was acquired Assume that the U.S.dollar is the functional currency of the British subsidiary. Given the facts above, the amount of cost of goods sold, restated in US $, that should appear in the consolidated income statement is: BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. Your Answer:
On June 1 of the current year, Zeta Corp. recorded purchases of inventory of P 800,000 and P 1,000,000 under credit terms 2/15, net 30. The payment due on the P 800,000 purchase was remitted on June 16. The payment due on the P 1,000,000 purchase was remitted on June 31. Under the net method and the gross method, these purchases should be included at what respective amounts in the determination of cost of goods available for sale? Net Method P 1,784,000 1,764,000 Gross Method P 1,764,000 А. В. 1,800,000 С. 1,764,000 1,800,000 1,784,000 1,764,000 D.
The ABC sole proprietorship deals with the trade of IT items and the provision of related services. Carry out the adjustment entries of the accounts for the fiscal year 20X6 as well as those for the determination of the gross profit taking into account the following information: For the accounting of inventories, the company applies a periodic inventory and evaluates the inventories using the weighted average cost method. The company trades the kind P. The initial inventory consists of 20 units with a purchase price of € 50 per unit. In the fiscal year, 20X6 bought 80 units for € 55 per unit and 80 units for € 60 per unit. In the inventory of 31/12/20X6, the stocks in the warehouse consist of 30 units whose liquidation price amounts to € 55 per unit. Total gross merchandise sales amounted to €45,000 and sales returns to €400. During the 20x6 fiscal year, the company had purchased $1,000 at a $200 exchange rate= € 1. On 31/12/20X6, the current USD exchange rate is $1 =€ 1.2. The…
Basil plc, the British subsidiary of a U.S. company reported cost of goods sold in Great Britain Pounds for the current year ended December 31. The beginning inventory was £18800, and the ending inventory was £13100. Purchases of £27600 were made evenly throughout the year. Spot rates for various dates are as follows: Date the beginning inventory was acquired Rate at the start of the year £1 = $1.11 £1 = $1.10 £1 = $1.14 £1 = $1.19 Average rate for the year Date the ending inventory was acquired Assume that the Great Britain Pound is the functional currency of the British subsidiary. Given the facts above, the amount of cost of goods sold, restated in US $, that should appear in the consolidated income statement is: BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. Vour Answer:
The following selected transactions were completed during August between Summit Company and Beartooth Co. Both companies use the net method under a perpetual inventory system. 1 Summit Company sold merchandise on account to Beartooth Co., $49,050, terms FOB destination. 2/15, n/eom. The cost of the goods sold was $28,370. Summit Company paid freight of $1,160 for delivery of merchandise sold to Beartooth Co. on August 1. Summit Company sold merchandise on account to Beartooth Co., $68,590, terms FOB shipping.point, Aug. 2 5 n/eom. The cost of the goods sold was $43,250. 9 Beartooth Co. paid freight of $2,440 on August 5 purchase from Summit Company. 15 Summit Company sold merchandise on account to Beartooth Co., $59,500, terms FOB shipping point, n/45. Summit paid freight of $1,755, which was added to the invoice. The cost of the goods sold was $31,720. 16 Beartooth Co. paid Summit Company for purchase of August 1. 20 Summit Company paid Beartooth Co. a cash refund of $1,100 for…
Presented below is a list of items that may or may not be reported as inventory in a company’s December 31 balance sheet. 1. Goods out on consignment at another company’s store: 800,0002. Goods sold on installment basis: 100,000 3. Goods purchased F.O.B. shipping point that are in transit on December 31: 120,0004. Goods purchased F.O.B. destination that are in transit on December 31: 200,000 5. Goods sold to another company, for which our company has signed an agreement to repurchase at a set price that covers all costs related to the inventory: 300,000 How much of these items would typically be reported as inventory in the financial statements? A. 1,520,000 B. 800,000 C. 1,100,000 D. 1,220,000
Fall Company began operations in the current year. The entity used perpetual inventory system.1. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n/30, FOB destination.2. Fall Company paid freight charge of P50,000.3. During the year, Fall Company paid for 80% of the merchandise within the discount period.4. The remaining 20% was paid beyond the discount period.5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required:Prepare journal entries to record the transactions using gross method and net method.
Fall Company began operations in the current year. The entity used perpetual inventory system. 1. During the year, Fall Company purchased merchandise having a gross invoice cost of P1,000,000. All purchases were made under the terms 2/10, n/30, FOB destination. 2. Fall Company paid freight charge of P50,000. 3. During the year, Fall Company paid for 80% of the merchandise within the discount period. 4. The remaining 20% was paid beyond the discount period. 5. Fall Company sold 70% of the merchandise it acquired for cash of P1,200,000. The other 30% remained in inventory at year-end. Required: Prepare journal entries to record the transacions using gross method and net method.
The following selected transactions were completed during August between Summit Company and Beartooth Co. Both companies use the net method under a perpetual inventory system. Aug. 1 Summit Company sold merchandise on account to Beartooth Co., $48,000, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $28,800. 2 Summit Company paid freight of $1,150 for delivery of merchandise sold to Beartooth Co. on August 1. 5 Summit Company sold merchandise on account to Beartooth Co., $66,000, terms FOB shipping point, n/eom. The cost of the goods sold was $40,000. 9 Beartooth Co. paid freight of $2,300 on August 5 purchase from Summit Company. 15 Summit Company sold merchandise on account to Beartooth Co., $58,700, terms FOB shipping point, n/45. Summit paid freight of $1,675, which was added to the invoice. The cost of the goods sold was $35,000. 16 Beartooth Co. paid Summit Company for purchase of August 1. 20 Summit Company paid Beartooth Co. a…
Presented below is a list of items that may or may not be reported as inventory in a company’s December 31 balance sheet. 1. Goods out on consignment at another company’s store- P800,0002. Goods sold on installment basis- P100,000 3. Goods purchased F.O.B. shipping point that are in transit on December 31- P120,0004. Goods purchased F.O.B. destination that are in transit on December 31- P200,000 5. Goods sold to another company, for which our company has signed an agreement to repurchase at a set price that covers all costs related to the inventory- P300,000 How much of these items would typically be reported as inventory in the financial statements?
The following selected transactions were completed by Betz Company during July of the current year. Betz Company uses the net method under a perpetual inventory system. July 1 Purchased merchandise from Sabol Imports Co., $13,377, terms FOB destination, n/30. 3 Purchased merchandise from Saxon Co., $10,650, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $230 was added to the invoice. 5 Purchased merchandise from Schnee Co., $14,350, terms FOB destination, 2/10, n/30. 6 Issued debit memo to Schnee Co. for merchandise with an invoice amount of $5,000 returned from purchase on July 5. 13 Paid Saxon Co. for invoice of July 3. 14 Paid Schnee Co. for invoice of July 5, less debit memo of July 6. 19 Purchased merchandise from Southmont Co., $25,850, terms FOB shipping point, n/eom. 19 Paid freight of $430 on July 19 purchase from Southmont Co. 20 Purchased merchandise from Stevens Co., $23,000, terms FOB destination, 1/10, n/30. 30 Paid…