Party Supply, Inc., a calendar year corporation, took a physical inventory count on November 30, Year 1 and properly valued its inventory at $4,250,000. The company will not perform another physical inventory count on December 31, Year 1. Assume the company uses FIFO inventory method. How much would you increase (decrease) the inventory account balance with each of the following situation? Put a positive number for increasing inventory balance, and a number in parenthesis for decreasing inventory balance. The company purchased goods from a European manufacturer. The cost of the goods was $750,000. The goods were shipped FOB shipping point on December 23 and were received at U.S. customs on January 2, year 2. The goods were delayed in customs until January 8, year 2, when they were finally received by Party Supply. Sales for the month of December were $5,000,000 and the company has an average gross margin of 30%. Party Supply placed goods with a selling price of $300,000 on its shipping dock on December 31, Year 1. The sale and transaction were recorded by the accounting department on December 31. The terms of the sale were FOB shipping point. The shipper did not pick up the goods the same afternoon because of inclement weather. The goods were picked up on January 2, Year 2. In response to a customer survey, Party Supply decided to start selling goods on consignment in December Year 1. An initial order of $100,000 (at cost) was delivered from the Party Supply warehouse to the consignee. The consignee sold 25% of the good in December, Year 1 and another 40% in January, Year 2. The remaining inventory was returned by the consignee in January. Party Supply started to use a public warehouse so that its products would be closer to its customer's location. $150, 000 of the total inventory was held in the public warehouse on December 31, Year 1. The cost to ship the goods from the main warehouse to the public warehouse was $20,000. The rent paid on the public warehouse for December Year 1 was $10,000. Part of the company's inventory on hand at year-end is specific to New Year's Eve. The value of that inventory decreases substantially if it is not sold before year-end. Remaining inventory of these items with an original cost of $50,000 was on hand at December 31, Year 1. In early January, Year 2, Party Supply sold these items for $10,000 and also paid $6,000 to have the inventory shipped to the buyer.
Party Supply, Inc., a calendar year corporation, took a physical inventory count on November 30, Year 1 and properly valued its inventory at $4,250,000. The company will not perform another physical inventory count on December 31, Year 1. Assume the company uses FIFO inventory method. How much would you increase (decrease) the inventory account balance with each of the following situation? Put a positive number for increasing inventory balance, and a number in parenthesis for decreasing inventory balance. The company purchased goods from a European manufacturer. The cost of the goods was $750,000. The goods were shipped FOB shipping point on December 23 and were received at U.S. customs on January 2, year 2. The goods were delayed in customs until January 8, year 2, when they were finally received by Party Supply. Sales for the month of December were $5,000,000 and the company has an average gross margin of 30%. Party Supply placed goods with a selling price of $300,000 on its shipping dock on December 31, Year 1. The sale and transaction were recorded by the accounting department on December 31. The terms of the sale were FOB shipping point. The shipper did not pick up the goods the same afternoon because of inclement weather. The goods were picked up on January 2, Year 2. In response to a customer survey, Party Supply decided to start selling goods on consignment in December Year 1. An initial order of $100,000 (at cost) was delivered from the Party Supply warehouse to the consignee. The consignee sold 25% of the good in December, Year 1 and another 40% in January, Year 2. The remaining inventory was returned by the consignee in January. Party Supply started to use a public warehouse so that its products would be closer to its customer's location. $150, 000 of the total inventory was held in the public warehouse on December 31, Year 1. The cost to ship the goods from the main warehouse to the public warehouse was $20,000. The rent paid on the public warehouse for December Year 1 was $10,000. Part of the company's inventory on hand at year-end is specific to New Year's Eve. The value of that inventory decreases substantially if it is not sold before year-end. Remaining inventory of these items with an original cost of $50,000 was on hand at December 31, Year 1. In early January, Year 2, Party Supply sold these items for $10,000 and also paid $6,000 to have the inventory shipped to the buyer.
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 3AP
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