Question

In: Accounting

Widget Tek’s original accountant accepted a position with another firm and left in early March. You...

Widget Tek’s original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Tek’s main product for March.

Date

Inventory
Quantity Unit Cost Total Cost
Mar. 1 850 $98.00 $83,300
1,275 $95.00 $121,125
Mar. 8 650 $98.00 $63,700
Mar. 11 325 $98.00 $31,850
Mar. 14 325 $98.00 $31,850
780 $103.00 $80,340
Mar. 22 260 $98.00 $25,480
Mar. 25 260 $98.00 $25,480
1,600 $99.00 $158,400

Study the inventory record for March and answer the questions that follow.

1. Assuming that the product sells for $165 and that 70% of sales are on account, determine the gross profit from sales for March. _____?
2. Making the same assumptions as in (1), determine the ending inventory cost for March. $183,880
3. Which inventory method is being used? LIFO

Solutions

Expert Solution

Units Purchased 6325
Units Sold 4465
Ending Units 1860
Calculation of Cost of Goods Sold
Date Quantity Unit Cost Total Cost
Mar. 1 850 $     98.00 $    83,300.00
1275 $     95.00 $ 121,125.00
Mar. 8 650 $     98.00 $    63,700.00
Mar. 11 325 $     98.00 $    31,850.00
Mar. 14 325 $     98.00 $    31,850.00
780 $ 103.00 $    80,340.00
Mar. 22 260 $     98.00 $    25,480.00
4465 $ 437,645.00

a)

Calculation of Gross Profit
Units Rate Amount
Sale 4465 $ 165.00 $ 736,725.00
Less: Cost of Goods Sold $ 437,645.00
Gross Profit $ 299,080.00

b)

Calculation of Ending inventory
Mar. 25 260 $     98.00 $    25,480.00
1600 $     99.00 $ 158,400.00
1860 $ 183,880.00

c) FIFO method


Dear Student,

Best effort has been made to give quality and correct answer. But if you find any issues please comment your concern. I will definitely resolve your query.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Chapter 6 - MP06-01 iNVENTORY rECORDS Widget Tek Inc.’s original accountant accepted a position with another...
Chapter 6 - MP06-01 iNVENTORY rECORDS Widget Tek Inc.’s original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Tek Inc.’s main product for March. Date Inventory Quantity Unit Cost Total Cost Mar. 1 850 $98.00 $83,300 1,275 $95.00 $121,125 Mar. 8 650 $98.00 $63,700 Mar. 11 325 $98.00 $31,850 Mar. 14 325 $98.00 $31,850 780 $103.00 $80,340 Mar. 22 260 $98.00 $25,480 Mar....
Q 1       A MANUFACTURING FIRM PRODUCES LEFT AND RIGHT WIDGETS. THE LEFT WIDGET FREQUENCY DISTRIBUTION...
Q 1       A MANUFACTURING FIRM PRODUCES LEFT AND RIGHT WIDGETS. THE LEFT WIDGET FREQUENCY DISTRIBUTION IS SHOWN HEREIN, AS IS THE RIGHT WIDGET FREQUENCY DISTRIBITON IS ALSO INCLUDED.                                                                                                                    CLASSES ARE PROVIDED, FREQENCIES ARE SHOWN , SOLVE EACH FOR THE FOLLOWING: MEAN, MEDIAN CLASS, MODAL CLASS, POPULATION AND SAMPLE STANDARD DEVIATIONS....
The widget market is currently monopolized by Widgets R Us (or simply Widgets), but another firm...
The widget market is currently monopolized by Widgets R Us (or simply Widgets), but another firm (Wadgets) is deciding whether to enter that market. If Wadgets stays out of the market, Widgets will earn $100 million profit. However, if Wadgets enters, Widgets can either share the market, in which case the two companies enjoy a total $20 million in profit, or wage a ruinous price war, in which case both companies lose big and go bankrupt (call this $0 profit...
(Accountant Trainee Position) QUESTIONS Please explain why you are interested in this position, including what you...
(Accountant Trainee Position) QUESTIONS Please explain why you are interested in this position, including what you can contribute to the team and what you hope to gain from this experience. This position involves communication with other staff, management, other agencies and vendors. Please describe your oral and written communication abilities. Please describe your knowledge, skills, and experience using accounting software/systems
In a Word document, you will type a response letter to the position of manager, accountant,...
In a Word document, you will type a response letter to the position of manager, accountant, administrative/medical assistant, or health professional. The position requires an associate's degree or higher, at least one year of work experience, and proficiency with Microsoft Office. Excellent communication skills are required. Second language a plus. Be sure to include an inside address and salutation. You are typing a letter to a company that you have made up. I am not asking you to look up...
3) Suppose that you work for a firm that produces a particular kind of widget. In...
3) Suppose that you work for a firm that produces a particular kind of widget. In the past, assembly-line workers were compensated according to a piece rate scheme in which they were paid according to the number of pieces that moved through their station in a shift. Unfortunately, under this scheme, the costs of reworking poorly assembled pieces increased considerably. In a meeting, a colleague proposes changing to a scheme in which every worker on a line is paid according...
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product....
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product. During your first week on the job, the vice president has been favorably impressed with your work. She has been so impressed, in fact, that yesterday she called you into her office and asked you to attend the executive committee meeting this morning for the purpose of leading a discussion on the variances reported for last period. Anxious to favorably impress the executive committee,...
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product....
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product. During your first week on the job, the vice president has been favorably impressed with your work. She has been so impressed, in fact, that yesterday she called you into her office and asked you to attend the executive committee meeting this morning for the purpose of leading a discussion on the variances reported for last period. Anxious to favorably impress the executive committee,...
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product....
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product. During your first week on the job, the vice president has been favorably impressed with your work. She has been so impressed, in fact, that yesterday she called you into her office and asked you to attend the executive committee meeting this morning for the purpose of leading a discussion on the variances reported for last period. Anxious to favorably impress the executive committee,...
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product....
You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product. During your first week on the job, the vice president has been favorably impressed with your work. She has been so impressed, in fact, that yesterday she called you into her office and asked you to attend the executive committee meeting this morning for the purpose of leading a discussion on the variances reported for last period. Anxious to favorably impress the executive committee,...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT