Question
In: Accounting
ABC COMPANY is a distributor of linseed oil which is used in the manufacture of paint....
ABC COMPANY is a distributor of linseed oil which is used in the manufacture of paint. The company buys linseed oil in bulk from a number of different linseed crushing plants. At the beginning of month of September the company had 25,000 gallons of linseed oil stored in its tank farm. The linseed oil was purchased from one crushing plant at a cost of $3.00. During the month of September the company purchased additional linseed oil and sold a linseed oil as follows.
9/3/XX purchased 10,000 gallons of linseed oil at $3.25 per gallon.
9/8/XX purchased 15,000 gallons of linseed oil at $3.50 per gallon
9/10/XX purchased 5,000 gallons of linseed oil at $3.60 per gallon.
9/11/XX sold 22,000 gallons to a paint manufacture for $5.00 per gallon.
9/12/XX purchased 20,000 gallons of linseed oil at $3.75 per gallon.
9/22/XX purchased 5,000 gallons of linseed oil at $3.80 per gallon.
9/30/XX sold 28,000 gallons of linseed oil for $5.20.
Required:
a. Complete the perpetual inventory record (provided) for the above transactions
using FIFO
b. Make the required journal entry on 9/8/XX for the FIFO method.
c. Make the required journal entry on 9/11/XX for the FIFO method.
d. Complete the perpetual inventory record (provided) for the above transactions
using LIFO
| Date | Account | DR | CR | |
PURCHASED SOLD BALANCE
|
Solutions
Expert Solution
|
PURCHASED SOLD BALANCE |
|||||||||
| opening balance | Purchase / (Sold) | Closing balance | |||||||
| UTS | COST | TOT | UTS | COST | TOTAL | UTS | COST | TOT | |
| 9/1/XX - opening bal | 25,000.00 | 3.00 | 75,000.00 | - | 25,000.00 | 3.00 | 75,000.00 | ||
| 25,000.00 | 75,000.00 | - | - | 25,000.00 | 75,000.00 | ||||
| 9/3/XX | 25,000.00 | 3.00 | 75,000.00 | 10,000.00 | 3.25 | 32,500.00 | 25,000.00 | 3.00 | 75,000.00 |
| 10,000.00 | 3.25 | 32,500.00 | |||||||
| 25,000.00 | 75,000.00 | 10,000.00 | 32,500.00 | 35,000.00 | 107,500.00 | ||||
| 9/8/XX | 25,000.00 | 3.00 | 75,000.00 | 15,000.00 | 3.50 | 52,500.00 | 25,000.00 | 3.00 | 75,000.00 |
| 10,000.00 | 3.25 | 32,500.00 | 10,000.00 | 3.25 | 32,500.00 | ||||
| 15,000.00 | 3.50 | 52,500.00 | |||||||
| 35,000.00 | 107,500.00 | 15,000.00 | 52,500.00 | 50,000.00 | 160,000.00 | ||||
| 9/10/XX | 25,000.00 | 3.00 | 75,000.00 | 5,000.00 | 3.60 | 18,000.00 | 25,000.00 | 3.00 | 75,000.00 |
| 10,000.00 | 3.25 | 32,500.00 | 10,000.00 | 3.25 | 32,500.00 | ||||
| 15,000.00 | 3.50 | 52,500.00 | 15,000.00 | 3.50 | 52,500.00 | ||||
| 5,000.00 | 3.60 | 18,000.00 | |||||||
| 50,000.00 | 160,000.00 | 5,000.00 | 18,000.00 | 55,000.00 | 178,000.00 | ||||
| 9/11/XX | 25,000.00 | 3.00 | 75,000.00 | (22,000.00) | 3.00 | (66,000.00) | 3,000.00 | 3.00 | 9,000.00 |
| 10,000.00 | 3.25 | 32,500.00 | 10,000.00 | 3.25 | 32,500.00 | ||||
| 15,000.00 | 3.50 | 52,500.00 | 15,000.00 | 3.50 | 52,500.00 | ||||
| 5,000.00 | 3.60 | 18,000.00 | 5,000.00 | 3.60 | 18,000.00 | ||||
| 55,000.00 | 178,000.00 | (22,000.00) | (66,000.00) | 33,000.00 | 112,000.00 | ||||
| 9/12/XX | 3,000.00 | 3.00 | 9,000.00 | 20,000.00 | 3.75 | 75,000.00 | 3,000.00 | 3.00 | 9,000.00 |
| 10,000.00 | 3.25 | 32,500.00 | 10,000.00 | 3.25 | 32,500.00 | ||||
| 15,000.00 | 3.50 | 52,500.00 | 15,000.00 | 3.50 | 52,500.00 | ||||
| 5,000.00 | 3.60 | 18,000.00 | 5,000.00 | 3.60 | 18,000.00 | ||||
| 20,000.00 | 3.75 | 75,000.00 | |||||||
| 33,000.00 | 112,000.00 | 20,000.00 | 75,000.00 | 53,000.00 | 187,000.00 | ||||
| 9/22/XX | 3,000.00 | 3.00 | 9,000.00 | 5,000.00 | 3.80 | 19,000.00 | 3,000.00 | 3.00 | 9,000.00 |
| 10,000.00 | 3.25 | 32,500.00 | 10,000.00 | 3.25 | 32,500.00 | ||||
| 15,000.00 | 3.50 | 52,500.00 | 15,000.00 | 3.50 | 52,500.00 | ||||
| 5,000.00 | 3.60 | 18,000.00 | 5,000.00 | 3.60 | 18,000.00 | ||||
| 20,000.00 | 3.75 | 75,000.00 | 20,000.00 | 3.75 | 75,000.00 | ||||
| 5,000.00 | 3.80 | 19,000.00 | |||||||
| 53,000.00 | 187,000.00 | 5,000.00 | 19,000.00 | 58,000.00 | 206,000.00 | ||||
| 9/30/XX | 3,000.00 | 3.00 | 9,000.00 | (3,000.00) | 3.00 | (9,000.00) | 5,000.00 | 3.60 | 18,000.00 |
| 10,000.00 | 3.25 | 32,500.00 | (10,000.00) | 3.25 | (32,500.00) | 20,000.00 | 3.75 | 75,000.00 | |
| 15,000.00 | 3.50 | 52,500.00 | (15,000.00) | 3.50 | (52,500.00) | 5,000.00 | 3.80 | 19,000.00 | |
| 5,000.00 | 3.60 | 18,000.00 | |||||||
| 20,000.00 | 3.75 | 75,000.00 | |||||||
| 5,000.00 | 3.80 | 19,000.00 | |||||||
| 58,000.00 | 206,000.00 | (28,000.00) | (94,000.00) | 30,000.00 | 112,000.00 | ||||
| 9/8/XX - Journal Entry | |||||||||
| Inventory | DR | 52500 | |||||||
| Accounts Payable / CASH | CR | 52500 | |||||||
| 9/11/XX - Journal Entry | Cost of Good Sold | DR | 66000 | ||||||
| Inventory | CR | 66000 | |||||||
ekkarill92 answered 2 years agoRelated Solutions
WX Company produced an oil based chemical product which it sells to paint manufacturers.
WX Company produced an oil based chemical product which it sells to paint manufacturers.Because of the unique nature of the chemical product, price is not driven by the market.In year 2020 with good market condition, it incurred total cost of $412,000 to produce thechemical. The invested asset is $1,487,500. The cost per unit to manufacture a gallon of thechemical is presented as belowDirect Labor $2Direct Material $5Apart from this, the variable manufacturing overhead is incurred at a rate of 40%...
WX Company produced an oil based chemical product which it sells to paint manufacturers. Because of...
WX Company produced an oil based chemical product which it sells
to paint manufacturers. Because of the unique nature of the
chemical product, price is not driven by the market. In year 2020
with good market condition, it incurred total cost of $412,000 to
produce the chemical. The invested asset is $1,487,500. The cost
per unit to manufacture a gallon of the chemical is presented as
below
Direct Labor $2
Direct Material $5
Apart from this, the variable manufacturing overhead...
WX Company produced an oil based chemical product which it sells to paint manufacturers. Because of...
WX Company produced an oil based chemical product which it sells
to paint manufacturers. Because of the unique nature of the
chemical product, price is not driven by the market.
In year 2020 with good market condition, it incurred total cost
of $412,000 to produce the chemical. The invested asset is
$1,487,500. The cost per unit to manufacture a gallon of the
chemical is presented as below
Direct Labor $2
Direct Material $5
Apart from this, the variable manufacturing overhead...
WX Company produced an oil based chemical product which it sells to paint manufacturers. Because of...
WX Company produced an oil based chemical product which it sells
to paint manufacturers. Because of the unique nature of the
chemical product, price is not driven by the market. In year 2020
with good market condition, it incurred total cost of $412,000 to
produce the chemical. The invested asset is $1,487,500. The cost
per unit to manufacture a gallon of the chemical is presented as
belowDirect Labor $2 Direct Material $5 Apart from this, the
variable manufacturing overhead is...
ABC Company is the regional sales dealer/distributor of XYZ Company., which is a big tyre producer...
ABC Company is the regional sales dealer/distributor of XYZ
Company., which is a big tyre producer
- It was established in 2009 as a partnership of two brothers
- XYZ Company is the only supplier of tyre products for the ABC
Company.
- ABC Ltd. has two types of sales channel : Retail (to
end-consumers through its retail shop – B2C) and Commercial (to
several companies in different sectors - B2B sales)
- Payment terms to XYZ AS. is 60...
Freedom Oil Company is a fuel oil distributor in New England. Freedom purchases fuel oil from...
Freedom Oil Company is a fuel oil distributor in New England.
Freedom purchases fuel oil from
large wholesalers and distributes the oil to its customers,
primarily in single-family houses, within 20
miles of its home offices. The company owns a number of
medium-sized delivery trucks and four
storage tanks. The tanks, when full, represent about 4 months’
worth of normal winter deliveries.
Freedom makes deliveries year-round, since many customers heat
their water with oil. Most of
Freedom’s business, however, occurs...
ABC Co, a large stock-exchange-listed company, is evaluating an investment proposal to manufacture Product WWW, which...
ABC Co, a large stock-exchange-listed company, is evaluating an
investment proposal to manufacture Product WWW, which has performed
well in test marketing trials conducted recently by the company’s
research and development division. Product WWW will be manufactured
using a fully-automated process which would significantly increase
noise levels from ABC Co’s factory. The following information
relating to this investment proposal has now been prepared: PAGE 10
OF 13 Initial investment RM 2 million Selling price (current price
terms) RM 20 per...
A company receives shipments of a component used in the manufacture of a component for a...
A company receives shipments of a component used in the
manufacture of a component for a high-end acoustic speaker system.
When the components arrive, the company selects a random sample
from the shipment and subjects the selected components to a
rigorous set of tests to determine if the components in the
shipments conform to their specifications. From a recent large
shipment, a random sample of 250 of the components was tested, and
24 units failed one or more of the...
uxguard Home Paint Company produces exterior latex paint, which it sells in one gallon containers. The...
uxguard Home Paint Company produces exterior latex paint, which
it sells in one gallon containers. The company has two processing
departments – Base Fab and Finishing. White paint which is used as
a base for all the company’s paints, is mixed from raw ingredients
in the Base Fab Department. Pigments are then added to the basic
white paint, the pigmented paint is squirted under pressure into
one gallon containers, and the containers are labeled and packed
for shipping in the...
The I. Kruger Paint and Wallpaper Store is a large retail distributor of the Supertrex brand...
The I. Kruger Paint
and Wallpaper Store is a large retail distributor of the Supertrex
brand of vinyl wallcoverings. Kruger will enhance its citywide
image in Miami if it can sell more rolls of Supertrex next year
than other local stores. It is able to estimate the demand function
as follows:
Number of rolls of
Supertrex sold = 20 X Dollars spent on advertising + 6.8 X Dollars
spent on in-store displays + 12 X Dollars invested in on-hand
wallpaper...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What are the accounts that make up Shareholder’s Equity on the Balance Sheet?
- Problem 18-5 Beta and Leverage North Pole Fishing Equipment Corporation and South Pole Fishing Equipment Corporation...
- Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the...
- Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $41per unit...
- Write an overview of common concerns about adolescent development. Cite any sources.
- When a company has positive net income, does that also mean they have positive cash flows?...
- Consider a project with an initial investment of $60,000, a 6 year usefule life (and study...
ADVERTISEMENT