Brief Exercise 1
Kraft Enterprises owns the following assets at December 31, 2014.
|
Cash in bank-savings account
|
68,000
|
Checking account balance
|
17,000
|
|
Cash on hand
|
9,300
|
Postdated checks
|
750
|
|
Cash refund due from IRS
|
31,400
|
Certificates of deposit (180-day)
|
90,000
|
What amount should be reported as cash?
Brief Exercise 2
Restin Co. uses the gross method to record sales made on credit. On June 1, 2014, it made sales of $50,000 with terms 3/15, n/45. On June 12, 2014, Restin received full payment for the June 1 sale.
Prepare the required journal entries for Restin Co
Brief Exercise 3
Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 50 units that cost $34 each. During June, (1) the company purchased 150 units at $34 each, (2) returned 6 units for credit, and (3) sold 125 units at $50 each.
Journalize the June transactions.
Brief Exercise 4
Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.
|
|
Units
|
Unit Cost
|
Total Cost
|
|
April 1 inventory
|
250
|
$10
|
$ 2,500
|
|
April 15 purchase
|
400
|
12
|
4,800
|
|
April 23 purchase
|
350
|
13
|
4,550
|
|
|
1,000
|
|
$11,850
|
Calculate weighted average cost per unit.
Compute the April 30 inventory and the April cost of goods sold using the average-cost method.
Brief Exercise 5
Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.
|
|
Units
|
Unit Cost
|
Total Cost
|
|
April 1 inventory
|
250
|
$10
|
$ 2,500
|
|
April 15 purchase
|
400
|
12
|
4,800
|
|
April 23 purchase
|
350
|
13
|
4,550
|
|
|
1,000
|
|
$11,850
|
Compute the April 30 inventory and the April cost of goods sold using the FIFO method.
Exercise 6
Shania Twain Company was formed on December 1, 2013. The following information is available from Twain's inventory records for Product BAP.
|
|
Units
|
Unit Cost
|
|
January 1, 2014 (beginning inventory)
|
600
|
$ 8
|
|
Purchases:
|
|
|
|
January 5, 2014
|
1,200
|
9
|
|
January 25, 2014
|
1,300
|
10
|
|
February 16, 2014
|
800
|
11
|
|
March 26, 2014
|
600
|
12
|
A physical inventory on March 31, 2014, shows 1,600 units on hand.
Prepare schedules to compute the ending inventory at March 31, 2014, under FIFO inventory methods.
Prepare schedules to compute the ending inventory at March 31, 2014, under LIFO inventory methods.
Calculate average-cost per unit.
Prepare schedules to compute the ending inventory at March 31, 2014, under Weighted-average inventory methods.
Brief Exercise 7
Presented below is information related to Rembrandt Inc.'s inventory.
|
(per unit)
|
Skis
|
Boots
|
Parkas
|
|
Historical cost
|
$190.00
|
$106.00
|
$53.00
|
|
Selling price
|
212.00
|
145.00
|
73.75
|
|
Cost to distribute
|
19.00
|
8.00
|
2.50
|
|
Current replacement cost
|
203.00
|
105.00
|
51.00
|
|
Normal profit margin
|
32.00
|
29.00
|
21.25
|
Determine the following:
(a) the two limits to market value (i.e., the ceiling and the floor) that should be used in the lower-of-cost-or-market computation for skis.
(b) the cost amount that should be used in the lower-of-cost-or-market comparison of boots.
(c) the market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.
Brief Exercise 8
Floyd Corporation has the following four items in its ending inventory.
|
Item
|
Cost
|
Replacement
Cost
|
Net Realizable
Value (NRV)
|
NRV less Normal
Profit Margin
|
|
Jokers
|
$2,000
|
$2,050
|
$2,100
|
$1,600
|
|
Penguins
|
5,000
|
5,100
|
4,950
|
4,100
|
|
Riddlers
|
4,400
|
4,550
|
4,625
|
3,700
|
|
Scarecrows
|
3,200
|
2,990
|
3,830
|
3,070
|
Determine the final lower-of-cost-or-market inventory value for each item.
Brief Exercise 9
Kumar Inc. uses a perpetual inventory system. At January 1, 2014, inventory was $214,000 at both cost and market value. At December 31, 2014, the inventory was $286,000 at cost and $265,000 at market value.
Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method (b) Loss method.
Brief Exercise 10
Boyne Inc. had beginning inventory of $12,000 at cost and $20,000 at retail. Net purchases were $120,000 at cost and $170,000 at retail. Net markups were $10,000; net markdowns were $7,000; and sales revenue was $147,000. Compute ending inventory at cost using the conventional retail method.