Cortez Company sells chairs that are used at computer stations. Its beginning Inventory of chairs was 150 units at $42per unit. During the year, Cortez made two batch purchases of this chair. The first was a 305-unit purchase at $47 perunit; the second was a 400-unit purchase at $49 per unit. During the period, it sold 495 chairs.RequiredDetermine the amount of product costs that would be allocated to cost of goods sold and ending Inventory, assumingthat Cortez usesa. FIFO.b. LIFO.c. Weighted average.Do not round Intermediate calculations. Round your final answers to nearest whole dollar amount.FIFOWeightedLIFOAverageCost of goods soldEnding inventory$ 22,595 $ 24,235$23,275$ 17,640 $ 16,909$16,909

1. FIFO (First-In, First-Out)Beginning Inventory:150 units at $42 each = $6,300PurchasesFirst Batch:…

Answered: Cortez Company sells chairs that are…

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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Late in the year, Software City began carrying WordCrafter, a new word processing software program. At December 31, Software City's perpetual Inventory records included the following cost layers in its Inventory of WordCrafter programs. Purchase Date Nov. 14 Dec. 12 Total available for sale at Dec. 31 Quantity 10 28 38 Unit Cost $ 400 320 $ Total Cost $ 4,000 8,960 $12,960 a. At December 31, Software City takes a physical Inventory and finds that all 38 units of WordCrafter are on hand. However, the current replacement cost (wholesale price) of this product is only $250 per unit. 1. Prepare the entries to record this write-down of the Inventory to the lower-of-cost-or-market at December 31. (Company policy is to charge LCM adjustments of less than $2,000 to Cost of Goods Sold and larger amounts to a separate loss account.) 2. Prepare the entries to record the cash sale of 32 WordCrafter programs on January 9, at a retail price of $380 each. Assume that Software City uses the FIFO flow…
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