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accounting problems with all solutions

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solution


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Question;1. The following data concerns inventory and purchases at Davenport Company:Inventory, January 1 90 units at $103Purchases:January 6 60 units at $102January 15 45 units at $102January 22 35 units at $96Inventory, January 31 88 unitsINSTRUCTIONSDetermine the cost of the ending inventory on January 31 under each of the following methods:(a) average cost method, (b) first in, first out (FIFO) method, and (c) last in, first out (LIFO) method.When using the average cost method, compute the unit cost to two decimal places.2. The following data pertains to Smart Investment Accounting software packages in the inventory ofComputer Program Smart Outlets:Inventory, January 1 170 units at $107Purchases:May 10 110 units at $105August 18 180 units at $104October 1 170 units at $105Inventory, December 31 175 unitsINSTRUCTIONS1. Determine the cost of the inventory on December 31 and the cost of goods sold for theyear ending on that date under each of the following valuation methods: (a) FIFO,(b) LIFO, and (c) average cost. When using the average cost method, compute the unitcost to the nearest cent.2. Assume that the replacement cost of each unit on December 31 is $105.25. Using thelower of cost or market rule, find the inventory amount under each of the methods given ininstruction 1.3. Printer CartridgesItem 119 50 $ 16.00 $ 16.50Item 120 60 17.25 17.10Item 121 90 23.00 23.50Fax MachinesItem 210 15 86.00 89.00Item 211 10 192.00 186.00Item 212 9 225.00 210.00Determine the amount to be reported as the inventory valuation at cost or market, whichever islower, under each of these methods:1. Lower of cost or market for each item separately.2. Lower of total cost or total market.3. Lower of total cost or total market by group.4. Over the past several years, Haven Forrest Company has had an average gross profit of 30 percent.At the end of 2013, the income statement of the company included the following information:Sales $1,668,750Cost of GoodsInventory, January 1, 2013 $ 117,000Purchases 1,170,000Total Merchandise Available for Sale 1,287,000Less Inventory, December 31, 2013 136,875Cost of Goods Sold 1,150,125Gross Profit on Sales $ 518,625Investigation revealed that employees of the company had not taken an actual physical count of theinventory on December 31. Instead, they had merely estimated the inventoryUsing the gross profit method of inventory estimation, verify the reasonableness (or lack of reason-ableness) of the ending inventory shown on the income statement.If a physical inventory count on December 31, 2013, revealed an ending inventory of$135,563, calculate the gross profit percentage to the nearest one-tenth of 1 percent.

 

Paper#43769 | Written in 18-Jul-2015

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