In: Accounting
On December 31, 2014, Cruise Company has 11,000 units of an inventory item, which cost $39 per unit when purchased on June 15, 2014. The selling price was $72 per unit. On December 30, 2014, the replacement cost was $41 per unit. At what amount should the 11,000 units of inventory be reported at on the December 31, 2014 balance sheet?
$429,000.
$341,000.
$792,000.
$451,000.
2)
RJ Corporation has provided the following information about one of its inventory items: |
Date | Transaction | Number of Units | Cost per Unit |
1/1 | Beginning Inventory | 408 | $3,240 |
6/6 | Purchase | 808 | $3,640 |
9/10 | Purchase | 1,240 | $4,040 |
11/15 | Purchase | 808 | $4,280 |
During the year, RJ sold 3,040 units. |
What was cost of goods sold using the FIFO cost flow assumption under a periodic inventory system? |
$11,857,192.
$11,772,160.
$12,005,120.
$11,882,160.
3)
Carp Corporation has provided the following information for its most recent month of operation: sales $16,250; ending inventory $4,100, purchases $8,250 and gross profit $10,500. How much was Carp’s beginning inventory? |
$5,750.
$1,600.
$18,750.
$12,100.
Answer 1 is $429,000
Cost per unit = $39
Replacement Cost per unit = $41
Number of units = 11,000
Cost per unit is less than its replacement cost. So, ending inventory should be reported at cost per unit.
Inventory reported in Balance Sheet = Cost per unit * Number of
units
Inventory reported in Balance Sheet = $39 * 11,000
Inventory reported in Balance Sheet = $429,000
Answer 2 is $11,772,160
Number of units sold = 3,040
Number of units sold includes 408 units from beginning inventory, 808 units from 6/6 purchase, 1,240 units from 9/10 purchase and 584 units from 11/15 purchase.
Cost of Goods Sold = 408 * $3,240 + 808 * $3,640 + 1,240 *
$4,040 + 584 * $4,280
Cost of Goods Sold = $11,772,160
Answer 3 is $1,600
Gross Profit = Sales - Cost of Goods Sold
$10,500 = $16,250 - Cost of Goods Sold
Cost of Goods Sold = $5,750
Cost of Goods Sold = Beginning Inventory + Purchases - Ending
Inventory
$5,750 = Beginning Inventory + $8,250 - $4,100
Beginning Inventory = $1,600