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Category > Accounting Posted 23 Jun 2017 My Price 10.00

ACC 308 1-3 Homework Chapter 9

1)

Herman Company has three products in its ending inventory. Specific per unit data for each of the products are as follows:

 

 

Product 1

Product 2

Product 3

  Cost

$

30

 

$

100

 

$

60

 

  Replacement cost

 

28

 

 

115

 

 

50

 

  Selling price

 

70

 

 

150

 

 

100

 

  Disposal costs

 

10

 

 

60

 

 

20

 

  Normal profit margin

 

9

 

 

50

 

 

22

 

 

Required:

What unit values should Herman use for each of its products when applying the LCM rule to ending inventory?

2)

The inventory of Royal Decking consisted of five products. Information about the December 31, 2013, inventory is as follows:

 

 

Per Unit

  

Product

Cost

Replacement Cost

Selling Price

A

$

170

 

$

100

 

$

190

 

B

 

210

 

 

135

 

 

230

 

C

 

150

 

 

165

 

 

210

 

D

 

130

 

 

100

 

 

210

 

E

 

80

 

 

105

 

 

110

 

 

Disposal costs consist only of a sales commission equal to 10% of selling price and shipping costs equal to 10% of cost. The normal gross profit percentage is 30% of selling price.

 

Required:

What unit value should Royal Decking use for each of its products when applying the LCM rule to units of inventory?

3)

Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $59,700. The following information for the month of November was available from company records:

 

  

  Purchases

$

122,000

 

  Freight-in

 

4,200

 

  Sales

 

240,000

 

  Sales returns

 

5,500

 

  Purchases returns

 

4,500

 

 

In addition, the controller is aware of $5,500 of inventory that was stolen during November from one of the company’s warehouses.

 

Required:

1.

Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 35%.

2-Calculate the estimated inventory at the end of November, assuming a markup on cost of 100%.

4)

San Lorenzo General Store uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of October 2013:

 

 

Cost

Retail

  Beginning inventory

$

44,000

 

$

59,000

 

  Net purchases

 

11,410

 

 

32,500

 

  Net markups

 

 

 

 

2,100

 

  Net markdowns

 

 

 

 

1,250

 

  Net sales

 

 

 

 

41,000

 

 

Required:

Calculate the table to estimate the average cost of ending inventory and cost of goods sold for October. Do not approximate LCM.

5)

LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2013:


 

 

Cost

Retail

  Beginning inventory

$

42,000

 

$

62,000

 

  Purchases

 

209,000

 

 

402,000

 

  Freight-in

 

13,280

 

 

 

 

  Purchase returns

 

5,000

 

 

7,000

 

  Net markups

 

 

 

 

6,000

 

  Net markdowns

 

 

 

 

3,700

 

  Normal breakage

 

 

 

 

7,000

 

  Net sales

 

 

 

 

282,000

 

  Employee discounts

 

 

 

 

2,000

 


 

Sales are recorded net of employee discounts.


 

Required:

1.

Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method (average, LCM). (Negative amounts should be indicated by a minus sign.)

 

 

Answers

SmartExpert
(118)
Status NEW Posted 23 Jun 2017 10:06 AM My Price 10.00

ACC----------- 30-----------8 1------------3 -----------Hom-----------ewo-----------rk -----------Cha-----------pte-----------r 9-----------

Attachments

file 1498216150-ACC 308 1-3 Homework Chapter 9.docx preview (556 words )
A-----------CC -----------308----------- 1------------3 H-----------ome-----------wor-----------k C-----------hap-----------ter----------- 9 ----------- 1)----------- H-----------erm-----------an -----------Com-----------pan-----------y h-----------as -----------thr-----------ee -----------pro-----------duc-----------ts -----------in -----------its----------- en-----------din-----------g i-----------nve-----------nto-----------ry.----------- Sp-----------eci-----------fic----------- pe-----------r u-----------nit----------- da-----------ta -----------for----------- ea-----------ch -----------of -----------the----------- pr-----------odu-----------cts----------- ar-----------e a-----------s f-----------oll-----------ows-----------: -----------  -----------Pro-----------duc-----------t 1----------- Pr-----------odu-----------ct -----------2 P-----------rod-----------uct----------- 3 -----------  ----------- C-----------ost----------- $ -----------30 -----------  -----------$ 1-----------00 -----------  -----------$ 6-----------0 Â-----------  ----------- Â----------- Re-----------pla-----------cem-----------ent----------- co-----------st -----------  -----------28 -----------  -----------  -----------115-----------  -----------  ----------- 50-----------  ----------- Â----------- Â -----------Sel-----------lin-----------g p-----------ric-----------e Â-----------  7-----------0 Â-----------  Â-----------  1-----------50 -----------  -----------  -----------100-----------  ----------- Â----------- Â -----------Dis-----------pos-----------al -----------cos-----------ts -----------  -----------10 -----------  -----------  -----------60 -----------  -----------  -----------20 -----------  -----------  ----------- N-----------orm-----------al -----------pro-----------fit----------- ma-----------rgi-----------n Â-----------  9-----------  -----------  ----------- 50-----------  -----------  ----------- 22-----------  ----------- ----------- Re-----------qui-----------red-----------:
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