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




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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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