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Category > Accounting Posted 19 Apr 2017 My Price 12.00

ACC 201 Chapter 6 Problem set A

Problem 6-1A

Columbus Limited is trying to determine the value of its ending inventory at February 28, 2014, the company’s year-end. The accountant counted everything that was in the warehouse as of February 28, which resulted in an ending inventory valuation of $48,000. However, she didn’t know how to treat the following transactions so she didn’t record them.

For each of the below transactions, specify whether the item in question should be included in ending inventory, and if so, at what amount.

(a)

  

On February 26, Columbus shipped to a customer goods costing $800. The goods were shipped FOB shipping point, and the receiving report indicates that the customer received the goods on March 2.

  

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$

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(b)

  

On February 26, Shira Inc. shipped goods to Columbus FOB destination. The invoice price was $350. The receiving report indicates that the goods were received by Columbus on March 2.

  

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$

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(c)

  

Columbus had $620 of inventory at a customer’s warehouse “on approval.” The customer was going to let Columbus know whether it wanted the merchandise by the end of the week, March 4.

  

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$

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(d)

  

Columbus also had $400 of inventory on consignment at a Palletine craft shop.

  

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$

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(e)

  

On February 26, Columbus ordered goods costing $750. The goods were shipped FOB shipping point on February 27. Columbus received the goods on March 1.

  

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$

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(f)

  

On February 28, Columbus packaged goods and had them ready for shipping to a customer FOB destination. The invoice price was $350; the cost of the items was $220. The receiving report indicates that the goods were received by the customer on March 2.

  

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$

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(g)

  

Columbus had damaged goods set aside in the warehouse because they are no longer saleable. These goods cost $400 and, originally, Columbus expected to sell these items for $600.

  

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$

 

Problem 6-2A (Part Level Submission)

Dyna Distribution markets CDs of the performing artist King James. At the beginning of March, Dyna had in beginning inventory 1,500 King James CDs with a unit cost of $7 During March, Dyna made the following purchases of King James CDs.

March 5

  

3,500

  

 @ 

  

$8

  

March 21

  

2,000

  

 @ 

  

$10

March 13

  

4,000

  

 @ 

  

$9

  

March 26

  

2,000

  

 @ 

  

$11


During March, 10,000 units were sold. Dyna uses a periodic inventory system.

 

Problem 6-3A (Part Level Submission)

Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit. During the year, purchases were:

Feb. 20

  

300

  

 @ 

  

$9

  

Aug. 12

  

600

  

 @ 

  

$11

May 5

  

500

  

 @ 

  

$10

  

Dec. 8

  

200

  

 @ 

  

$12


Milo Company uses a periodic inventory system. Sales totaled 1,500 units.

 

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(a)

 

Determine the cost of goods available for sale.

The cost of goods available for sale

  

$

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Problem 6-4A

The management of Red Robin Co. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. They request your help in determining the results of operations for 2014 if either the FIFO method or the LIFO method had been used. For 2014, the accounting records show the following data.

Inventories

  

Purchases and Sales

Beginning (10,000 units)

  

$22,800

  

Total net sales (225,000 units)

  

$865,000

Ending (15,000 units)

      

Total cost of goods purchased (230,000 units)

  

578,500


Purchases were made quarterly as follows.

Quarter

  

Units

  

Unit Cost

  

Total Cost

1

  

60,000

  

$2.3

  

$138,000

2

  

50,000

  

2.50

  

125,000

3

  

50,000

  

2.60

  

130,000

4

  

70,000

  

2.65

  

185,500
   

230,000

      

$578,500


Operating expenses were $147,000, and the company’s income tax rate is 32%.

Prepare comparative condensed income statements for 2014 under FIFO and LIFO. (Round answers to 0 decimal places, e.g. 1,520.)

 

Problem 6-5A (Part Level Submission)

You are provided with the following information for Matthew Inc. for the month ended October 31, 2014. Matthew uses a periodic method for inventory.

Date

  

Description

  

Units

  

Unit Cost or Selling Price

October 1

  

Beginning inventory

  

60

  

$24

October 9

  

Purchase

  

120

  

26

October 11

  

Sale

  

100

  

35

October 17

  

Purchase

  

70

  

27

October 22

  

Sale

  

65

  

40

October 25

  

Purchase

  

80

  

28

October 29

  

Sale

  

120

  

40
 

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Collapse question part

(a)

 

Calculate weighted-average cost per unit. (Round answers to 3 decimal places, e.g. $5.250.)

Weighted-average cost per unit

  

$

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Problem 6-7A

The management of Mumba Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2014, the accounting records show these data.

Inventory, January 1 (10,000 units)

  

$35,000

Cost of 120,000 units purchased

  

501,000

Selling price of 100,000 units sold

  

665,000

Operating expenses

  

130,000


Units purchased consisted of 40,000 units at $4 on May 10; 60,000 units at $4.20 on August 15; and 20,000 units at $4.45 on November 20. Income taxes are 28%.

Prepare comparative condensed income statements for 2014 under FIFO and LIFO. (Round answers to 0 decimal places, e.g. 1,520.)

 

 

 

Answers

SmartExpert
(118)
Status NEW Posted 19 Apr 2017 08:04 AM My Price 12.00

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Attachments

file 1492590110-ACC 201 Chapter 6 Problem set A Answers.docx preview (1215 words )
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