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 1 year agoRelated Solutions
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2019
2020
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315,000
35,000
Accounts receivable
720,000
755,000
35,000
Inventory
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800,000
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Capital assets
1,720,000
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Accumulated depreciation
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Net capital assets
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240,000
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2,995,000
3,250,000
Liabilities and Stockholders’ equity
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445,000
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Interest payable
60,000
75,000
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Income taxes payable
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50,000
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900,000
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The following information was obtained from the accounting records and financial statements of Fairbanks Inc. Assets...
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2019
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Cash
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781,000
119,000
Accounts receivable
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707,000
183,000
Raw materials inventory
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521,000
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1,190,000
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1,000,000
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73,000
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2019
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Accounts receivable
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498,000
153,000
Inventory
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Net capital assets
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Accounts payable
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168,000
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Salaries payable
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456,000
89,000
Long-term debt
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192,000
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Accumulated depreciation
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Income tax expense
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Cash
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Sales
196,000
Equipment
124,000
Selling, general, and
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31,000
Common stock (9,100 shares)
95,000
Accounts payable
11,900
Retained earnings, 1/1/16
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Interest expense
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Merchandise inventory
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Long-term debt
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Allowance for Doubtful
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DEBIT R
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