Question

1. Morris Company had the following information for the year ending December 31:

Additional Resources

		Units	Unit Cost
Beginning inventory		200	$40
Purchase:	April 6	460	42
Sale:	May 4	260
Purchase:	July 19	500	44
Sale:	September 9	470
Purchase:	October 10	120	45

Morris uses the perpetual inventory system and the FIFO method.

Required:

Using FIFO

2. On December 31, 2017, Tiffany Company issued $1,420,000 of 9% bonds. The market interest rate at the time of issuance was 12%. The bonds pay interest on June 30 and December 31 and mature in 10 years.

Required:

Compute the selling price of the bonds on December 31, 2017.

Note: Round all intermediate calculations to three decimal places, and round your final answer to the nearest cent.

Selling price of bonds: $

3. On December 31, 2017, $120,000 of 9% bonds were issued. The market interest rate at the time of issuance was 11%. The bonds pay interest on June 30 and December 31 and mature in 10 years.

Required:

Compute the selling price of a single $1,000 bond on December 31, 2017.

Note: Round all intermediate calculations to three decimal places, and round your final answer to the nearest cent.

Selling Price of bonds?__

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD
	RECIEPTS	COST OF GOODS SOLD	BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Beg. Inv.							200	40	8000
06-Apr	460	42	19320				200	40	8000
							460	42	19320
04-May				200	40	8000
				60	42	2520	400	42	16800
19-Jul	500	44	22000				400	42	16800
							500	44	22000
09-Sep				400	42	16800
				70	44	3080	430	44	18920
10-Oct	120	45	5400				430	44	18920
							120	45	5400
TOTAL	1080		46720	730		30400	550		24320
Cost of goods sold		30400
Ending inventory		24320
req 2.
Semi annual cash interest = 1420,000*9%*6/12 =	63900
n = 20
I = 6%
Cash flows		Amount	PVF at 6%	Amount
Semi annual cash interest	63900	11.46992	732927.9
Maturity value		14,20,000	0.311805	442763.1
Price of bonds				1175691
Selling price - 1175,691
Req 3.
Semi annual cash interest = 120,000*9%*6/12 =	5400
n = 20
I = 5.50%
Cash flows		Amount	PVF	Amount
Semi annual cash interest	5400	11.95038	64532.05
Maturity value		1,20,000	0.342729	41127.48
Price of bonds				105659.5
Selling price = 105,660