Details of this Paper

Ashford ACC 205 Week Three Exercise Assignment

Description

solution

Question

Question;1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows.Painting Cost1/2 Beginning inventory Woods \$11,0004/19 Purchase Sunset 21,8006/7 Purchase Earth 31,20012/16 Purchase Moon 4,000Woods and Moon were sold during the year for a total of \$35,000. Determine the firm?sa. cost of goods sold.b. gross profit.c. ending inventory.2. Inventory valuation methods: basic computations. The January beginning inven?tory 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 LIFO Weighted AverageGoods available for sale \$ \$ \$Ending inventory, March 31Cost of goods sold3. 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 @ \$4 = \$2,000? 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 = \$2,550The 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. Wave Riders Surfboard Company began business on January 1 of the current year. Purchases of surfboards were as follows:1/3: 100 boards @ \$1253/17: 50 boards @ \$1305/9: 246 boards @ \$1407/3: 400 boards @ \$15010/23: 74 boards @ \$160Wave Riders sold 710 boards at an average price of \$250 per board. The company uses a periodic inventory system.Instructionsa. 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 averageb. 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. Betsy Ross Enterprises purchased a delivery van for \$30,000 in January 20X7. The van was estimated to have a service life of 5 years and a resid?ual 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 20X8b. Straight-linec. Double-declining-balance6. Depreciation computations. Alpha Alpha Alpha, a college fraternity, purchased a new heavy-duty washing machine on January 1, 20X3. The machine, which cost \$1,000, had an estimated residual value of \$100 and an estimated service life of 4 years (1,800 washing cycles). Calculate the following: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-declining-balance 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.Instructionsa. 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 20 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.Due July: 12, 2013

Paper#38736 | Written in 18-Jul-2015

Price : \$29