Difference in profit-accepting offer and scrapping calendars

Assignment Help Accounting Basics

Reference no: EM131816734

Question: Obsolete Inventory The New York bookstore bought more "Jets Champs" calendars than it could sell. It was nearly June and 220 calendars remained in stock. The store paid $4.25 each for the calendars and normally sold them for $8.85. Since February, they had been on sale for $6.20, and 2 weeks ago the price was dropped to $4.95. Still, few calendars were being sold. The bookstore manager thought it was no longer worthwhile using shelf space for the calendars. The proprietor of Old Orchard Collectibles offered to buy all 220 calendars for $88. He intended to store them until the 2013 football season was over and then sell them as novelty items. The bookstore manager was not sure she wanted to sell for $.40 calendars that cost $4.25. The only alternative, however, was to scrap them because the publisher would not take them back.

1. Compute the difference in profit between accepting the $88 offer and scrapping the calendars.

2. Describe how the $4.25 * 220 = $935 paid for the calendars affects your decision.

Reference no: EM131816734

Questions Cloud

Calculating the unit production cost : Joint Products, Multiple Choice From a particular joint process, Demoulas company produces three products, A, B, and C. Each product may be sold at the point.

Sketch the equipment and lines required for each alternative : Sketch the equipment and lines required for each alternative.Explain the actions you need to take to create each alternative.

How the cash flow statement relates the balance sheet : Explain how the statement of retained earnings relats to the balance sheet. Explain how the cash flow statement relates the balance sheet

Prepare a corrected trial balance on the trial balance : A $360 collection of an account receivable was recorded as $630. Prepare a corrected trial balance on the Trial Balance form in document sharing

Difference in profit-accepting offer and scrapping calendars : Obsolete Inventory The New York bookstore bought more "Jets Champs" calendars than it could sell. It was nearly June and 220 calendars remained in stock.

How many switches the fraternity house might need : Considering the connection to the Internet, would you recommend that the fraternity house use a DSL modem, a cable modem, or WAN wireless?

How is this likely to affect the value of the brazilian real : How is this likely to affect the value of the Brazilian real? The Brazilian current-account balance

What is likely to happen to the huge global capital flows : What is likely to happen to the huge global capital flows of the 1980s? What is the link between the trade imbalances and the global movement of capital

Should parents talk to their dying children about death : CBS reported on its website in September 2004: "Should Parents Talk to Their Dying Children About Death? A Swedish study found that parents

User Account

All Pages