Question
In: Accounting
The following information is obtained from Rapid Corporation’s financial records:
The following information is obtained from Rapid Corporation’s financial records:
Units Unit Cost Total Cost
Jan. 1 Beginning inventory 100 $10 $ 1,000
Mar. 1 Purchased 400 $12 $ 4,800
Mar. 5 Sold (250)
May 2 Purchased 100 $15 $ 1,500
Aug. 1 Sold (150)
Oct. 3 Purchased 100 $25 $ 2,500
Dec 31 Ending inventory 300 ? ?
(Per physical count)
Required:
- Calculate the cost of the ending inventory, under the assumption that the company uses a perpetual inventory system and the moving-average method for costing inventory. (Calculate the unit price to two decimal places).
- Calculate the cost of the ending inventory, under the assumption that the company uses a periodic inventory system and the FIFO method for costing inventory.
(3) Using the answer to part (2):
- Prepare the necessary year-end adjusting entries (you should have two entries) to account for the fact that the ending inventory had a total Market Value of $4,000. The company uses the allowance (indirect) method to apply the Lower of Cost and NRV model and the opening inventory had a NRV of $1,200.
- Prepare an income statement for the company for the year ended December 31, 2019 assuming a selling price of $30 per unit and operating expenses of $4,500. Remember to use proper financial statement format!
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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315,000
35,000
Accounts receivable
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755,000
35,000
Inventory
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800,000
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Capital assets
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Accumulated depreciation
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Net capital assets
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75,000
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2019
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Accounts receivable
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183,000
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Income tax expense
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Cash
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Sales
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Equipment
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Selling, general, and
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Common stock (9,100 shares)
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Accounts payable
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