Managerial Accounting Assignment
Exercise I -
|
January 2016
|
Initial stock
|
5000 units at $5 each
|
|
February 2016: Out
|
600 units.
|
|
April 2016
|
In
|
3700 units unit at $8 each
|
|
June 2016 : Out
|
9 000 units
|
|
August2016 In
|
600 units
|
|
October 2016 : Out
|
1960 units.
|
|
December 2016 : Out
|
430 units
|
|
|
|
|
January 2017
|
In
|
: 8 000 units at $10 each
|
|
February 2017 : Out
|
900 units
|
|
July 2017 : Out
|
1800 units.
|
|
September 2017 Out
|
6500 units
|
|
November 2017 : Out
|
2000 units
|
|
December 2017
|
: In
|
: 50000 units at $5
|
1- Please prepare the inventory statements for the years 2016 and 2017 based on the FIFO and WAC methods?
2- Calculate the ending inventory and the COST OF GOODS SOLD for year 2016 and 2017 based on the FIFO and WAC methods? What would be the gross margin if the selling price is $10.00?
3- In which economic and fiscal situation the LIFO method is the best?
Exercise II - The Sun Yoga Company Inc decided to invest in some short term instruments. Its CFO decided to invest in a listed company named Spoon Inc.
1. On 1st January, the company bought 300,000 shares of Salt Inc at $9.50
2. On 15th of October, the company received a cash dividend of $5.00 per share
3. On 30th of November, the price of Salt Inc shares rose to $17.00 per share.
4. On 30th of December , the company decided to sell off all its shares of Salt Inc
a) Please post the account entries of each transaction
b) What would happen if instead of rising, the price of the shares dropped to $8.00 per share and the company sold all of its shares?
Exercise III - During the monthly closing of it's A/R accounts, Dove Inc, posted its uncollected received classified by their age.
The company has a beginning allowance balance of USD $75000. Please post the appropriate entries to write off the uncollectible,
|
Age of Accounts
|
|
1 - 30 Days
|
31 - 60 Days
|
61 - 90 Days
|
Over 90 Days
|
|
sales
|
$ 1,000,000
|
$ 850,000
|
$ 90,000
|
$ 25,000
|
|
%uncollectible
|
1.5%
|
2%
|
50%
|
30%
|