Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 10, Problem 17E
a.
To determine
Whether the new inventory system that is available to Person L is approximate or pure just in the time system.
b.
To determine
Calculate the amount of inventory holding cost that would be eliminated by Person L.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question 6
An Accountant must design inventory ordering systems for two new raw material items - A31 and B31. The
company operates 50 weeks a year. The accountant has gathered the following information about the two
items:
A31
B35
80 units
60 units
Average weekly demand
Unit purchase price
$20
$30
Annual holding cost
20% on purchase
30% on purchase
price
price
Ordering cost
$80 per order
$30 per order
Lead time
2 weeks
2 weeks
Current order size
300 units
80 units
250 units
90 units
Maximum weekly demand
Required:
(i)
Determine the optimal order quantity for material items - A31 and B35 using the economic
order quantity (EOQ) model. Show your calculations.
QUESTION 1
An animal shelter plans to sell T-shirts bearing their logo at an upcoming crafts
fair. They find a supplier who charges $2.85 a piece for orange T-shirts. Printing
the logo on the shirt requires an additional $0.70 per shirt. The group places an
order for 300 T-shirts and pays a shipping fee of $22 upon receiving the T-shirts.
The journal entry on the receipt date should include:
a. A credit to inventory of $877
O b. A děbit to inventory of $855
O c. A credit to inventory of $1,065
O d. A debit to inventory of $1,087
Problem #11
Transportation Costs
On June 16, 2021, llano sold merchandise to Pascual for P6,000, terms 2/10, n/30.
Shipping costs were P600. Pascual received the goods and llano's invoice on June 17.
On June 24, Pascual sent the payment to llano, which llano received on June 25. Both
lano and Pascual use the periodic inventory system. The following are several
arrangements regarding the shipping costs:
a. Shipping terms are F.O.B. shipping point, freight collect. Pascual paid the shipping
costs on June 17 and remitted P5,880 on June 24.
Required:
1. Prepare the entries for llano to record the sale and the cash receipt.
2. Prepare the entries for Pascual to record the purchase, the payment of shipping
costs, and the cash remittance.
b. Shipping terms are F.O.B. destination, freight prepaid. llano paid the shipping
costs on June 16. Pascual remitted P5,880 on June 24.
Required:
1. Prepare the entries for llano to record the sale, the payment of shipping costs, and
the cash receipt.
2.…
Chapter 10 Solutions
Survey Of Accounting
Ch. 10 - 1. What are some differences between financial and...Ch. 10 - 2. What does the value-added principle mean as it...Ch. 10 - 4. How does product costing used in financial...Ch. 10 - 5. What does the statement costs can be assets or...Ch. 10 - 6. Why are the salaries of production workers...Ch. 10 - 7. How do product costs affect the financial...Ch. 10 - 8. What is an indirect cost? Provide examples of...Ch. 10 - 9. How does a product cost differ from a selling,...Ch. 10 - 10. Why is cost classification important to...Ch. 10 - 11. What is cost allocation? Give an example of a...
Ch. 10 - 13. What are some of the common ethical conflicts...Ch. 10 - 14. What costs should be considered in determining...Ch. 10 - 15. What is a just-in-time (JIT) inventory system?...Ch. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - Prob. 19QCh. 10 - Prob. 1ECh. 10 - Exercise 1-2A Identifying product versus selling,...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Exercise 1-6A Identifying product versus SGA costs...Ch. 10 - LO 1-3 Exercise 1-7A Recording product versus SGA...Ch. 10 - Prob. 8ECh. 10 - LO 1-4 Exercise 1-9A Upstream, midstream, and...Ch. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Cost of goods manufactured and sold The following...Ch. 10 - Prob. 15ECh. 10 - Exercise 1-14A Using JIT to minimize waste and...Ch. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Problem 1-19A Characteristics of financial versus...Ch. 10 - Prob. 22PCh. 10 - Problem 1-21A Effect of product versus period...Ch. 10 - Problem 1-22A Product versus SGA costs The...Ch. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 1ATCCh. 10 - Prob. 2ATCCh. 10 - Prob. 3ATCCh. 10 - Prob. 4ATCCh. 10 - Ethical Dilemma Product cost versus selling and...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- PROBLEM 2 Buenaflor Bed and Bath uses a continuous review inventory system for a particular brand and size of organic material. A bag of this organic material costs P110.00. It operates 365 days a year and uses 5,000 bags per year on a continuous basis. The cost of ordering is P50.00 per order and the cost of carrying per bag is P3. It takes 14 days to receive a shipment after an order is placed. Required: 1. What is the EOQ? Round your answer to whole number. Example 100. 2. If EOQ is used, how many orders should be placed per year? Round your answer to two decimal places. Example 100.05 3. What is the reorder point? Round your answer to whole number. Example 100. 4. If the firm wishes to hold 10 days' usage in inventory as safety stock, compute the reorder point. Round your answer to whole number. Example 100.arrow_forwardSaved O Homework Baird Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory: April $105,000 June May $125,000 Required purchases (on account) $137,000 Baird Books' accountant prepared the following schedule of cash payments for inventory purchases. Baird Books' suppliers require that 90 percent of purchases on account be paid in the month of purchase; the remaining 10 percent are paid in the month following the month of purchase. Required a. Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. b. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarte Complete this question by entering your answers in the tabs below. Required A Required B Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. Schedule of Cash Payments for…arrow_forwardView Policies Current Attempt in Progress The Sunland Hat Shop Limited counted the entire inventory in its store on August 31 and arrived at a total inventory cost of $100,400. The count included $6,900 of inventory held on consignment for a local designer; $490 of inventory that was being held for customers who were deciding if they actually wanted to purchase the merchandise: and $1,100 of inventory that had been sold to customers but was being held for alterations. There were two shipments of inventory received on September 1. The first shipment cost $4,800. It had been shipped on August 29, terms FOB destination. The second shipment cost $5,150. plus freight charges of $240. It had been shipped on August 28, terms FOB shipping point. Neither of these shipments was included in the August 31 count. Calculate the correct cost of the inventory on August 31. Inventory cost eTextbook and Media Attempts: 0 of 2 used Submit Arswer Save fur Laterarrow_forward
- Exercise 2 (Cost Estimation; Account Classification) Black's Compact Disk Store expanded the size of its store in Mandaluyong City, two months ago. The owner. Manuel Black, has asked you to analyze the cost structure in his store, as a basis for assessing the profitability of his business. He provides you with account data for the most recent month, wnch he explains is representative of what these costs are in most months of the year; there is not much seasonality in his business. Last month 8,900 compact disks were sold. Атоunt Ассоunt Salespersons' wages Compact disk purchases Rent P17,800 66,750 10,250 400 Depreciation Shopping bags Insurance 180 750 Advertising Utilities Black's salary 650 1,250 18,500arrow_forwardView Policies Current Attempt in Progress Vaughn Manufacturing uses the perpetual inventory and the gross method. On March 1, it purchased $74000 of inventory, terms 2/10, n/30.bn March 3, Vaughn returned goods that cost $9000. On March 9, Vaughn paid the supplier. On March 9, Vaughn should credit O purchase discounts for $1300. O purchase discounts for $1480. O inventory for $1300. O inventory for $1480. Save for Later Attempts: 0 of 2 used Submit Answerarrow_forward226 CHAPTER 5 Accounting for Merchandising Activities Mountain Mabel's is a simali general store located just outside of Yeilowstone National Park store uses a periodic inventory system. Every January 1. Mabel and her husband close the e and take a complete physical inventory while watching the Rose Parade on television. Las e the inventory amounted to $5.200; this year it totaled $3,800. During the current year, the bus ness recorded sales of S125.000 and purchases of $62,000. PROBLEM 5.4 The Periodic Inventory System LO 4, 5 Instructions n. Compute the cost of goods sold for the current year. b. Explain why a small business such as this might use the periodic inventory system. C. Explain some of the disadvantages of the periodic system to a larger business, such as a Sears store.arrow_forward
- QUESTION 16 Bahrain Specialist Hospital has recently hired you to improve their inventory management for some of the mostly costly medicines they use. You decide that the best method to use is the EOQ. After some analysis and research you gather the following information Yearly sales 2,279 Cost of placing order 401 Carrying costs per order 30 Based on this calculate the EOQarrow_forwardProblem 5-20A (Algo) Allocating product costs between cost of goods sold and ending inventory: intermittent purchases and sales of merchandise LO 5-1 Skip to question [The following information applies to the questions displayed below.] Pam’s Creations had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 230 items at $99 each. The company uses the FIFO cost flow assumption and keeps perpetual inventory records. Date Transaction Description March 5 Purchased 290 items @ $109 April 10 Sold 165 items @ $213 June 19 Sold 305 items @ $213 September 16 Purchased 240 items @ $114 November 28 Sold 155 items @ $218 Problem 5-20A (Algo) Part b b. Calculate the gross margin Pam’s Creations would report on the Year 2 income statement. Sales Cost of goods sold Gross margin c. Determine the ending inventory balance Pam’s Creations would report on the December 31, Year 2, balance sheet. Ending inventoryarrow_forwardPurchases and freight cost B-05.05 Gunnison Creamery produces a variety of specialty ice creams and buys ingredients from many suppliers. Each supplier seems to have unique policies about discounts and freight terms. Gunnison Creamery records all purchases "gross" and uses a periodic inventory system. Gunnison recently hired a new bookkeeper and needs your help to develop a template of sample journa! entries for different scenarios. For purposes of preparing the template, assume that the purchase is $1,000 and freight is $100. Cash Discount Discount Condition Freight Terms F.O.B. Shipping point/freight prepaid Scenario 2/10, n/30 taken 2 2/10, n/30 FO.B. Shipping point/freight prepaid missed 3. 2/10, n/30 F.O.B. Destination/freight prepaid taken 4 2/10, n/30 F.O.B. Destination/freight prepaid missed F.O.B. Shipping point/freight collect F.O.B. Shipping point/freight collect 2/10, n/30 taken 2/10, n/30 missed The first scenario is done as an example on the preprinted worksheet, and the…arrow_forward
- 16 Mario’s Home System has sale of $2,820, costs of goods sold of $2,160, inventory of $504, and accounts receivable of $430. How many days, on average, does it take Mario’s to sell its inventory? a. 88.00 days b. 72.66 days c. 65.23 days d. 85.17 days e. 55.66 daysarrow_forward! 1 Check my work Required information SB Exercise E8-5 to E8-10 [The following information applies to the questions displayed below.] Shadee Corporation expects to sell 600 sun shades in May and 410 in June. Each shade sells for $152. Shadee's beginning and ending finished goods inventories for May are 80 and 45 shades, respectively. Ending finished goods inventory for June will be 65 shades. E8-8 (Algo) Preparing Cost of Goods Sold Budget [LO 8-3f] Each shade requires a total of $45.00 in direct materials that includes 4 adjustable poles that cost $5.00 each. Shadee expects to have 130 in direct materials inventory on May 1, 90 poles in inventory on May 31, and 110 poles in inventory on June 30. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $15 per hour. Additionally, Shadee's fixed manufacturing overhead is $10,000 per month, and variable manufacturing overhead is $15 per unit produced. Use the information and solutions presented to…arrow_forwardQUESTION 1 a) The annual demand for Praise Limited’s inventory is 10,500 units. The item costs GH¢400 a unit to purchase. The holding cost for one unit for one year is 12% of the unit cost and ordering costs are GH¢450 per order. The supplier offers a 2% discount for orders of 700 units or more and a discount of 3% for orders of 950 units or more. Required: Determine the cost minimising order size of the company. b) Kwame after his National Service and with no hope of securing a job in the formal sector has decided to run a taxi service. The following forecast has been made for the operation of a service between Abisim and Sunyani. i) Revenue totaling GH¢300 a week for 52 weeks in a year. This is net of fuel and other variable costs. ii) Tyres; four pieces for a year at GH¢120 per unit. iii) Maintenance and servicing; GH¢120 per month. iv) Salaries GH¢3,000 per year v) Insurance GH¢350 per year The net cash flow will increase at 5% per annum for the next five years due to inflation.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Inventory management; Author: The Finance Storyteller;https://www.youtube.com/watch?v=DZhHSR4_9B4;License: Standard Youtube License