Question

In: Accounting

On December 31, 2014, Cruise Company has 11,000 units of an inventory item, which cost $39...

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.

Expert Solution

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

ekkarill92 answered 2 years ago

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