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What is the cost of one individual rocker
Course:- Accounting Basics
Reference No.:- EM131567712

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Assignment Help >> Accounting Basics

Q1. Diane makes one product. Diana adopted the dollar-value LIFO inventory method on 12-31-12. Her ending inventory at 12-31-12 was \$55,000. Additional inventory data follows:

 Year Inventory at year-end prices Price index (base year 2012) Cost of goods manufacturing during the year 2013 \$56,280 1.005 \$150,000 2014 \$54,540 1.010 \$160,000 2015 \$57,798 0.014 \$155,000 2016 \$58,986 1.017 \$170,000 2017 \$55,917 1.026 \$145,000 2018 \$57,680 1.030 \$155,000

Compute the inventory at December 31, 2013, 2014, 2015, 2016, 2017 and 2018 AND the cost of goods sold for each year assuming Diane uses the dollar-value LIFO method for each year.

Q2. Hartley's accounting records included the following information:

Inventory, 01-01-13                                          \$96,250

Purchases during 2013 (excluding shipping)         \$1,450,180

Purchase returns during 2013                             \$57,500

Freight-in on 2013 purchases                              \$33,075

Sales during 2013                                              \$2,467,500

Hartley completed a physical inventory on 12-31-13 and calculated an ending inventory of \$106,000, at cost. In recent years, Hartley's gross profit equaled 75% of Hartley's cost. Hartley suspects some inventory may have been shoplifted. Prepare the entry, if necessary, to reflect the estimated loss from any shoplifted items.

Q3. Gage's accounting records included the following information:

Inventory, 01-01-15                    \$51,000

Purchases during 2015                 \$705,000

Sales during 2015                        \$1,662,000

Sales returns during 2015             \$66,480

Gage completed a physical inventory on 12-31-15 and calculated an ending inventory of \$80,000, at retail selling price. In recent years, Gage's gross profit equaled 55% of Gage's selling price. Gage suspects some inventory may have been shoplifted. Prepare the entry, if necessary, to reflect the estimated loss from any shoplifted items.

Q4. As of 12-31-15, Zena Company has four different inventory items on hand. Data on the four items follows:

 Item Quantity on hand Unit cost Expected selling price Estimated disposal costs C3Z22P3 450 \$30.75 \$40 \$3 PQ27845 15 \$  9.50 \$10 \$2 ZT15577 235 \$17.00 \$29 \$0 SF98888 45 \$43.00 \$50 \$9

Using the lower-of-cost-or-net realizable value approach applied on an individual-item basis, determine if Zena needs to make an entry to write her inventory down. If so, prepare the entry Zena should make

Q5. As of 12-31-15, Acme Company has three different inventory items on hand. Data on the three items follows:

 Item Quantity on hand Unit cost (Acme uses LIFO) Replacement cost Normal profit Expected selling price Estimated disposal costs A 57 \$450 \$625 \$800 \$1,500 \$100 B 42 \$200 \$300 \$230 \$400 \$25 C 15 \$780 \$800 \$300 \$1,000 \$250

Using the lower-of-cost-or-market approach applied on an individual-item basis, determine if Acme needs to make an entry to write her inventory down. If so, prepare the entry Acme should make

Q6. Andre paid \$1,200,000 to purchase 15,000 chairs. The 15,000 chairs consisted of 4 different chair types/styles: 3,500 rockers that Andre expects to sell for \$125 each, 5,000 gliders that Andre expects to sell for \$200 each, 2,000 straight-back chairs that Andre expects to sell for \$100 each, and 4,500 recliners that Andre expects to sell for \$150. Using the relative sales value method:

• What is the cost of one individual rocker? Round your answer to the nearest penny.
• What will be Andre's gross profit amount if he sells 400 straight-back chairs? Round your answer to the nearest dollar.
• If at the end of the accounting period, Andre has 3,000 recliners on hand, what will Andre report as his recliner ending inventory? Round your answer to the nearest dollar.

NOTE - when performing your calculations, make sure that you have allocated 100% of the \$1,200,000 to the 4 different chair types. I suggest you use an excel spreadsheet (with formulas) to ensure you allocate the ENTIRE \$1,200,000.

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