walberg de alers, purchased goods for $38,700. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $1,800. Walberg Associates insured the shipment at a cost of $270. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of ca

walberg de alers, purchased goods for $38,700. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $1,800. Walberg Associates insured the shipment at a cost of $270. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of ca

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 4C

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Inventory Costing Methods On June 1, Welding Products Company had a beginning inventory of 210 cases of welding rods that had been purchased for S88 per case. Welding Products purchased 1,150 cases at a cost of $95 per case on June 3. On June 19, the company purchased another 950 cases at a cost of $112 per case. Sales data for the welding rods are: Welding Products uses a perpetual inventory system, and the sales price of the welding rods was $130 per case. Required: 1. Compute the cost of ending inventory and cost of goods sold using the FIFO method. 2. Compute the cost of ending inventory and cost of goods sold using the LIFO method. 3. Compute the cost of ending inventory and cost of goods sold using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 4. CONCEPTUAL CONNECTION Assume that operating expenses are $21,600 and Welding Products has a 30% tax rate. How much will the cash paid for income taxes differ among the three inventory methods? 5. CONCEPTUAL CONNECTION Compute Welding Products' gross profit ratio (rounded to two decimal places) and inventory turnover ratio (rounded to three decimal places) under each of the three inventory costing methods. How would the choice of inventory costing method affect these ratios?
ences Mc Graw Hill Exercise 5-2 (Algo) Inventory costs LO C1 Walberg Associates, antique dealers, purchased goods for $38,100. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $1,500. Walberg Associates insured the shipment at a cost of $210. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of $550. Determine the cost of inventory. Cost of inventory Total cost of inventory $ 0 SOBOT
Brief Exercise 6-5 (Algo) Calculate ending inventory and cost of goods sold using FIFO (LO6-3) During the year, Wright Company sells 520 remote-control airplanes for $120 each. The company has the following inventory purchase transactions for the year. Date January 1 May 5 November 3 FIFO Beginning Inventory Purchases: May 5 November 3 Transaction Beginning inventory Purchase Purchase Total Calculate ending inventory and cost of goods sold for the year, assuming the company uses FIFO. Number of units Cost of Goods Available for Sale 40 300 250 590 Cost per unit $ 62 65 70 Number of Units 40 300 250 590 $ Cost of Goods Available for Sale 2,480 $ Unit Cost $62 65 70 19,500 17,500 39,480 Total Cost $2,480 19,500 17,500 $39,480 Number of units Cost of Goods Sold Cost per Cost of Goods unit Sold Ending Inventory Number Cost per of units Ending unit Inventory
Corinthian Inc., a new tile supply company, purchased three merchandise inventory items as follows: 1. first purchase $1,750 2. second purchase $1,630 3. third purchase $1,845 Using FIFO costing, calculate the gross profit for the period if the company sells two units for $4,800. O $425 O $1,845 O $1,420 O $1,325 Save for Later
Brief Exercise 6-6 (Algo) Calculate ending inventory and cost of goods sold using LIFO (LO6-3) During the year, Wright Company sells 535 remote-control airplanes for $120 each. The company has the following inventory purchase transactions for the year. Date January 1 May 5 November 3 LIFO Beginning Inventory Purchases: Calculate ending inventory and cost of goods sold for the year, assuming the company uses LIFO. May 5 November 3 Transaction Beginning inventory Purchase Purchase Total Cost of Goods Available for Sale Number of units 40 Cost per unit $ 285 $ 235 $ 560 65 68 73 Number of Unit Units Cost 40 $65 285 68 235 73 560 Cost of Goods Available for Sale $ $ 2,600 Total Cost $2,600 19,380 17,155 $39,135 19,380 17,155 39,135 Number of units Cost of Goods Sold Cost per Cost of Goods Sold unit 0 $ $ 0 0 0 0 Ending Inventory Number of units 0 Cost per Ending unit Inventory $ 0
r 个 O any purchased inventory for $2,500 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid the shipper $100 cash for freight in. The company then returned damaged goods worth $500. The invoice was then paid eight days after the invoice date. Assuming that there was no beginning inventory balance, the cost of inventory would be (Assume a perpetual inventory system.) OA. $1,960 B. $2,060 OC. $2.400 S
Costs of $14,500 were incurred to acquire goods and make them ready for sale. The goods were shipped to the buyer (FOB shipping point) for a cost of $1,150. Additional necessary costs of $2,300 were incurred to acquire the goods. No other incentives or discounts were available. Compute the buyer's total cost of merchandise inventory. Multiple Choice $14,500 $17,950 $16,800 $15,650
Recording an Inventory Purchase FSET Shields Company has purchased inventories incurring the following costs (a) the invoice amount of $660, financed through a $550 note with the remainder paid in cash, (b) shipping charges of $33 on account, (c) interest of $11 accrued on the $550 borrowed to finance the purchase, and (d) 59 on account for the cost of moving the inventory to the company's warehouse a. Determine the cost to be assigned to the inventory. b. Record the transactions using the financial statement effects template Note: Use negative signs with your answers, when appropriate Transaction Purchase inventory D. Shipping charges Interest on note d. Cost of moving inventory Cash Asset .... *995 OU Noncash Asset *>* Balance Sheet Liabilities **** Contributed Capital SSSS Earned Capital Revenues AAAA Income Statement Expenses ARAK Net Income
Recording Purchases Compass Inc. purchased 1,250 bags of insulation from Glassco Corp. The bags of insulation cost $5.50 each. Compass paid Tremblay Trucking $320 to have the bags of insulation shipped to its warehouse. Compass returned 50 bags that were defective and paid for the remainder. Assume that Compass uses the perpetual inventory system and that Glassco did not offer a purchase discount. (Note: You are doing the accounting for Compass Inc.) Required: 1. Prepare the journal entry to record the purchase of the bags of insulation. 2. Prepare the entry to record the payment for shipping. 3. Prepare the entry for the return of the defective bags. 4. Prepare the entry to record the payment for the bags kept by Compass. 5. What is the total cost of this purchase?
Instructions Long Horn Music Store uses a perpetual inventory system and had the following transactions during July. 1 Sold merchandise on account for $1,475. The cost of inventory sold was $785. 4 Purchased $1,500 of inventory, paying $1,000 cash with the remainder on account. 7 Sold equipment that cost $1,900 for $2,300. The equipment was fully depreciated and had no salvage value. 10 Paid wages of $1,250 and salaries of $3,250. Neither had been previously accrued. 12 Sold merchandise for $4,450 cash and for $3,250 on account. The cost of inventory sold was $4,050. 18 Purchased new equipment for $3,780, paying $1,780 cash and signing a 90-day note for the remainder. 24 Sold merchandise for $1,235 cash. The cost of inventory sold was $650. Paid wages of $1,470 and salaries of $3,250. Neither had been previously accrued. 29 Paid the July 4 invoice on account. Required: Record the preceding transactions in a general journal. Chart of Accounts
A company purchased inventory for $2,500 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid the shipper $200 cash for freight in. The company then returned damaged goods worth $500. The invoice was then paid eight days after the invoice date. Assuming that there was no beginning inventory balance, the cost of inventory would be (Assume a perpetual inventory system.) OA. $1,960 B. $2,160 OC. $2,450 OD. $2,300
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