Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 5, Problem 18E
a.
To determine
Ascertain the amount of product costs that would be allocated to cost of goods sold and ending inventory under FIFO method.
b.
To determine
Ascertain the amount of product costs that would be allocated to cost of goods sold and ending inventory under LIFO method.
c.
To determine
Ascertain the amount of product costs that would be allocated to cost of goods sold and ending inventory under weighted average method.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Exercise 5-3A (Algo) Allocating product cost between cost of goods sold and ending inventory: multiple
purchases LO 5-1
Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 110 units at $105 per unit. During
the year, Cortez made two batch purchases of this chair. The first was a 222-unit purchase at $119 per unit; the second was a 260-unit
purchase at $126 per unit. During the period, it sold 366 chairs.
Required
a-1. Determine the amount of product costs that would be allocated to cost of goods sold, assuming that Cortez uses FIFO.
a-2. Determine the amount of product costs that would be allocated to ending inventory, assuming that Cortez uses FIFO.
b-1. Determine the amount of product costs that would be allocated to cost of goods sold, assuming that Cortez uses LIFO.
b-2 Determine the amount of product costs that would be allocated to ending inventory, assuming that Cortez uses LIFO.
c. Determine the amount of product costs that…
Problem 3
Prime Company manufactures and sells four products, the inventories of which are priced at
cost or net realizable value, whichever is lower. A normal profit of 30% is usually maintained on
each product
The following information is compiled on December 31:
Appliances
Units on hand
Unit cost
Net realizable
value
Product A
500
2,500
2,700
Product B
300
3,700
3,600
Car Accessories
Product C
600
1,400
2,000
Required: Determine the ending inventory assuming the entity applies LCNRV.
Product D
800
2,100
2,000
Question Content Area
Recording Purchases and Sales
Printer Supply Company sells computer printers and printer supplies. One of its products is a toner cartridge for laser printers. At the beginning of the year, there were 225 cartridges on hand that cost $62 each. During the year, Printer Supply purchased 1,475 cartridges at $62 each. After inspection, Printer Supply determined that 15 cartridges were defective and returned them to the supplier. Printer Supply also sold 830 cartridges at $95 each and sold an additional 710 cartridges at $102 each after a midyear selling price increase. Customers returned 20 of the cartridges that were purchased at $102 to Printer Supply for miscellaneous reasons. Assume that Printer Supply uses a perpetual inventory system.
Required:
1. Prepare summary journal entries to record the purchases, sales, and return of inventory. Assume that all purchases and sales are on credit but no discounts were offered.
Question Content Area
Record the entry…
Chapter 5 Solutions
Survey Of Accounting
Ch. 5 - 1. What is the difference between accounts...Ch. 5 - Prob. 2QCh. 5 - 3. What type of account is the Allowance for...Ch. 5 - 4. What are two ways in which estimating...Ch. 5 - 5. When using the allowance method, why is...Ch. 5 - 6. What is the most common format for reporting...Ch. 5 - 7. Why is it necessary to mate an entry to...Ch. 5 - 8. What are some factors considered in estimating...Ch. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - 14. What is an advantage of using the percent of...Ch. 5 - 15. What is aging of accounts receivable?Ch. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Prob. 18QCh. 5 - 21. What is accrued interest?Ch. 5 - How does the accrual of interest revenue or...Ch. 5 - Prob. 21QCh. 5 - Prob. 22QCh. 5 - Prob. 23QCh. 5 - Prob. 24QCh. 5 - Prob. 25QCh. 5 - 26. What types of costs do businesses avoid when...Ch. 5 - 1. Name and describe the four cost flow methods...Ch. 5 - 2. What are some advantages and disadvantages of...Ch. 5 - Prob. 29QCh. 5 - Prob. 30QCh. 5 - 5. In an inflationary period, which inventory cost...Ch. 5 - 6. In an inflationary period, which inventory cost...Ch. 5 - 7. What is the difference between the flow of...Ch. 5 - Prob. 34QCh. 5 - Prob. 35QCh. 5 - Prob. 36QCh. 5 - Prob. 37QCh. 5 - Prob. 38QCh. 5 - Prob. 39QCh. 5 - Prob. 1ECh. 5 - Exercise 7-1A Analysis of financial statement...Ch. 5 - Prob. 3ECh. 5 - Effect of recognizing uncollectible accounts...Ch. 5 - Analyzing financial statement effects of...Ch. 5 - Effect of recovering a receivable previously...Ch. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Roth Service Co. experienced the following...Ch. 5 - Prob. 11ECh. 5 - On May 1, 2018, Benzs Sandwich Shop loaned 10,000...Ch. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Luna Company accepted credit cards in payment for...Ch. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - The Shirt Shop had the following transactions for...Ch. 5 - Prob. 21ECh. 5 - Accounting for uncollectible accountstwo cycles...Ch. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Sage Inc. experienced the following transactions...Ch. 5 - The following transactions apply to Hooper Co. for...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - The following trial balance was prepared for Tile,...Ch. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 1ATCCh. 5 - Prob. 3ATCCh. 5 - Prob. 4ATCCh. 5 - Alonzo Saunders owns a small training services...
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
- LO 5-1 Exercise 5-3A Allocating product cost between cost of goods sold and ending inventory: multiple purchases Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 100 units at $60 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 150-unit purchase at $68 per unit; the second was a 200-unit purchase at $72 per unit. During the period, it sold 270 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses: a. FIFO. b. LIFO. c. Weighted average. Rogo 200arrow_forwardPROBLEM 6.8A: CPI sells computer peripherals. At December 31, 2011, CPI's inventory amounted to $500,000. During the first week in January 2012, the company made only one purchase and one sale. These transactions were as follows: Jan. 2 Purchased 20 modems and 80 printers from Sharp. The total cost of these machines was $25,000, terms 3/10, n/60. Jan. 6 Sold 30 different types of products on account to Pace Corporation. The total sales price was $10,000, terms 5/10, n/90. The total cost of these 30 units to CPI was $6,100 (net of the purchase discount). CPI has a full-time accountant and a computer-based accounting system. It records sales at the gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receivable, inventory, and accounts payable. Instructions a. Briefly describe the operating cycle of a merchandising company b. Prepare journal entries to record these transactions, assuming that CPI uses a perpetual inventory system. c. Compute the gross…arrow_forwardDate March 1 March 5 March 9 March 18 March 25 March 29 Problem 5-1A (Algo) Part 4 Activities Beginning inventory Purchase Sales Purchase Purchase Sales Totals Gross Margin Sales Less: Cost of goods sold Gross profit FIFO Units Acquired at Cost @ $52.60 per unit @ $57.60 per unit LIFO 180 units 265 units 125 units 230 units 800 units 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, units sold include 105 units from beginning inventory, 235 units from the March 5 purchase, units from the March 18 purchase, and 125 units from the March 25 purchase. Note: Round weighted average cost per unit to two decimals and final answers to nearest whole dollar. @ $62.60 per unit @ $64.60 per unit Weighted Average Units Sold at Retail Specific ID 340 units @ $87.60 per unit 210 units @ $97.60 per unit 550 unitsarrow_forward
- Question 2. Required information Skip to question [The following information applies to the questions displayed below.]Ferris Company began January with 4,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 3,000 $ 9 $ 27,000 Jan. 18 4,000 10 40,000 Totals 7,000 67,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 2,000 Jan. 12 1,000 Jan. 20 3,000 Total 6,000 5,000 units were on hand at the end of the month.arrow_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_forwardQuestion 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.arrow_forward
- Cost flow methods The following three identical units of Item P401C are purchased during April: Apr. 2 Apr. 15 Apr. 20 Total Average cost per unit ($348 ÷ 3 units) Item Beta Units Cost Purchase 1 $114 Purchase 1 116 Purchase 1 118 3 $348 $116 Assume that one unit is sold on April 27 for $159. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-ou and (c) weighted average cost method. a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost Gross Profit Ending Inventory $ $ $arrow_forwardCommunication Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Date Units Purchased Unit Cost Total Cost April 6 31,000 36.60 1,134,600 May 18 33,000 39.00 1,287,000 June 6 40,000 39.60 1,584,000 July 10 40,000 42.00 1,680,000 August 10 27,200 42.75 1,162,800 October 25 12,800 43.50 556,800 November 4 8,000 44.85 358,800 December 10 8,000 48.00 384,000 200,000 8,148,000 Sales: April 16,000 units May 16,000 June 20,000 July 24,000 August 28,000 September 28,000 October 18,000 November 10,000 December 8,000 Total Units 168,000 Total sales 10,000,000 The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.arrow_forwardENDING INVENTORY COSTS Danny Steele owns a small specialty store, named Steeles Storeroom, whose year-end is June 30. Determine the total amount that should be included in Steeles Storerooms year-end inventory. A physical inventory taken on June 30 reveals the following: Cost of merchandise on the showroom floor and in the warehouse 42,600 Goods held on consignment (consignor is Quality Manufacturer) 7,600 Goods that Steeles Storeroom, as the consignor, has for sale at the location of Midtown Galleria 8,300 Sales invoices indicate that merchandise was shipped on June 28, terms FOB shipping point, delivered at buyers receiving dock on July 6 4,350 Sales invoices indicate that merchandise was shipped on June 26, terms FOB destination, delivered at buyers receiving dock on July 1 2,800arrow_forward
- Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Sales: The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.arrow_forwardCost Flow Methods The following three identical units of Item K113 are purchased during April: Item Beta Units Cost April 2 April 15 April 20 Total Purchase Purchase Purchase a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost 1 1 1 3 Average cost per unit ($837+ 3 units) Assume that one unit is sold on April 27 for $374. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last- in, first-out (LIFO); and (c) weighted average cost method. $276 279 282 $837 $279 Gross Profit Ending Inventoryarrow_forwardCost Flow Methods The following three identical units of Item K113 are purchased during April: Cost April 2 April 15 April 20 Total Item Beta a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost Purchase Purchase Purchase Units 1 1 1 3 $ $504 Average cost per unit $168 ($504 + 3 units) Assume that one unit is sold on April 27 for $210. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit $165 168 171 Ending Inventory $arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Corporate Financial AccountingAccountingISBN:9781337398169Author:Carl Warren, Jeff JonesPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781337398169
Author:Carl Warren, Jeff Jones
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Chapter 6 Merchandise Inventory; Author: Vicki Stewart;https://www.youtube.com/watch?v=DnrcQLD2yKU;License: Standard YouTube License, CC-BY
Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License