Reference no: EM131264888
Bridgeport Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2017. Jim Alcide, controller for Bridgeport, has gathered the following data concerning inventory. At May 31, 2017, the balance in Bridgeport’s Raw Materials Inventory account was $469,200, and Allowance to Reduce Inventory to NRV had a credit balance of $27,400. Alcide summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below.
Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Bridgeport’s May 31, 2017, financial statements for inventory under the LCNRV rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle.
Cost Sales Price Net Realizable Value Aluminum siding $80,500 $73,600 $64,400 Cedar shake siding 98,900 108,100 97,520 Louvered glass doors 128,800 214,360 193,545 Thermal windows 161,000 178,020 161,000 Total $469,200 $574,080 $516,465
Determine the proper balance in Allowance to Reduce Inventory to NRV at May 31, 2017.
Balance in the Allowance to Reduce Inventory to NRV $ Link to Text Link to Text
For the fiscal year ended May 31, 2017, determine the amount of the gain or loss that would be recorded (using the loss method) due to the change in Allowance to Reduce Inventory to NRV. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
The amount of the gain (loss)
|
What will be the projected benefit obligation
: On January 1, 20X2, Paul Co.’s defined benefit pension plan had plan assets with a fair value of $750,000, and a projected plan obligation of $875,000. Assume that pension expense is $80,000, what will be the projected benefit obligation at December ..
|
|
Major investment in specialized equipment
: You are in charge of procuring a machine for your factory. The process will take about a year to complete and is a major investment in specialized equipment that will make or break the profitability of the company. It is expected the equipment will o..
|
|
What are arguments for prorating production-volume variance
: What are the arguments for prorating a production-volume variance that has been deemed to be material among work-in-process, finished goods, cost and cost of goods sold as opposed to writing it all off to cost of goods sold?
|
|
Process of purchasing several large pieces of equipment
: Harding Company is in the process of purchasing several large pieces of equipment from Danning Machine Corporation. Several financing alternatives have been offered by Danning: Make one lump-sum payment of $1,630,000 five years from date of purchase...
|
|
Preparing its annual financial statements for fiscal year
: Bridgeport Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended..
|
|
Amortization schedules remaining principal balance
: Assume the following: Payment #1 totals $1,600 ($1,200 principal and $400 interest expense); Payment #2 totals $1,600 ($1,300 principal and $300 interest expense); and the remaining principal balance before these two payments is $50,000. If the amort..
|
|
Uncollectible account using percentage of credit sale method
: At the end of the year a company reports a balance in its allowance for uncolletible accounts of $1,400 (credit) before any year-end adjustment. The company esitmates future uncollectible accounts to be 4% of creid sales for the year. Credit sales fo..
|
|
Must bank reconciliation always balance
: The following data were accumulated for use in reconciling the bank account of Western Co. for March: Prepare a bank reconciliation, using the format shown in Exhibit 7 in the textbook. If the balance sheet were prepared for Western Co. on March 31,..
|
|
Method of accounting for uncollectible receivables
: Journalize the following transactions in the accounts of Adams Food Service Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: Reinstated the account of Wings Co. that had been written off..
|