Expert answer:ACC 205: need help with Inventory assignment
Answer & Explanation:Attached is the instructions for the assignment Inventory.docx
inventory.docx
Unformatted Attachment Preview
B
Week Three Exercise Assignment
Inventory
1. Specific identification method. Boston Galleries uses the specific identification method for inventory
valuation. Inventory information for several oil paintings follows.
Painting
Cost
1/2 Beginning inventory
Woods
$21,000
4/19 Purchase
Sunset
21,800
6/7 Purchase
Earth
31,200
12/16 Purchase
Moon
4,000
Woods and Moon were sold during the year for a total of $35,000. Determine the firm’s
a. cost of goods sold.
b. gross profit.
c. ending inventory.
2. Inventory valuation methods: basic computations. The January beginning inventory of the White
Company consisted of 300 units costing $40 each. During the first quarter, the company purchased two
batches of goods: 700 Units at $44 on February 21 and 800 units at $50 on March 28. Sales during the
first quarter were 1,400 units at $75 per unit. The White Company uses a periodic inventory system.
Using the White Company data, fill in the following chart to compare the results obtained under the
FIFO, LIFO, and weighted-average inventory methods.
FIFO
$
Goods available for sale
Ending inventory, March 31
LIFO
$
Weighted Average
$
B
Cost of goods sold
3. Perpetual inventory system: journal entries. At the beginning of 20X3, Beehler Company
implemented a computerized perpetual inventory system. The first transactions that occurred
during 20X3 follow:
•
1/2/20X3 Purchases on account: 500 units @ $6 = $3,000
•
1/15/20X3 Sales on account: 300 units @ $8.50 = $2,550
•
1/20/20X3 Purchases on Account: 200 units @ 5 = $1,000
•
1/25/20X3
Sales on Account: 300 units @ $8.50 = $2,550
The company president examined the computer-generated journal entries for these transactions
and was confused by the absence of a Purchases account.
a. Duplicate the journal entries that would have appeared on the computer printout under FIFO
& LIFO
b. Calculate the balance in the firm’s Inventory account under each method.
c. Briefly explain the absence of the Purchases account to the company president.
4. Inventory valuation methods: computations and concepts.
Wild Riders Surfboard Company began business on January 1 of the current year.
Purchases of surfboards were as follows:
Date
1/3
4/3
6/3
7/3
Total
Quantity
Unit Cost
Total Cost
100
$125
$12,500
200
$135
$27,000
100
$145
$14,500
100
$155
$15,500
500
$69,500
B
Wild Riders sold 400 boards at $250 per board on the dates listed below. The company
uses a perpetual inventory system.
Date
3/17
5/17
8/10
Total
Quantity Sold
Unit Price Total Sales
50
$250
$12,500
75
$250
$18,750
275
$250
$68,750
400
$100,000
Instructions
a. Calculate cost of goods sold, ending inventory, and gross profit under each of the
following inventory valuation methods:
•
•
•
First-in, first-out
Last-in, first-out
Weighted average
b. Which of the three methods would be chosen if management’s goal is to
(1) produce an up-to-date inventory valuation on the balance sheet?
(2) show the lowest net income for tax purposes?
5. Depreciation methods. Mike Davis Enterprises purchased a delivery van for $40,000 in January 20X7.
The van was estimated to have a service life of 5 years and a residual value of $6,000. The company is
planning to drive the van 20,000 miles annually. Compute depreciation expense for 20X8 by using each
of the following methods:
a. Units-of-output, assuming 17,000 miles were driven during 20X8
b. Straight-line
c. Double-declining-balance
6. Depreciation computations. Alpha Alpha Alpha, a college fraternity, purchased a new heavy-duty
washing machine on January 1, 20X3. The machine, which cost $2,000, had an estimated residual value
of $100 and an estimated service life of 4 years (1,800 washing cycles). Calculate the following:
B
a. The machine’s book value on December 31, 20X5, assuming use of the straight-line
depreciation method
b. Depreciation expense for 20X4, assuming use of the units-of-output depreciation method.
Actual washing cycles in 20X4 totaled 500.
c. Accumulated depreciation on December 31, 20X5, assuming use of the double-decliningbalance depreciation method.
7. Depreciation computations: change in estimate. Aussie Imports purchased a specialized piece of
machinery for $50,000 on January 1, 20X3. At the time of acquisition, the machine was estimated to
have a service life of 5 years (25,000 operating hours) and a residual value of $5,000. During the 5 years
of operations (20X3 – 20X7), the machine was used for 5,100, 4,800, 3,200, 6,000, and 5,900 hours,
respectively.
Instructions
a. Compute depreciation for 20X3 – 20X7 by using the following methods: straight line, units of
output, and double-declining-balance.
b. On January 1, 20X5, management shortened the remaining service life of the machine to 15
months. Assuming use of the straight-line method, compute the company’s depreciation
expense for 20X5.
c. Briefly describe what you would have done differently in part (a) if Aussie Imports had paid
$47,800 for the machinery rather than $50,000 In addition, assume that the company incurred
$800 of freight charges $1,400 for machine setup and testing, and $300 for insurance during the
first year of use.
…
Purchase answer to see full
attachment
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assignment to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades