Gladstone Company tracks the number of units purchased and sold
throughout each accounting period but applies its inventory costing
method at the end of each period, as if it uses a periodic
inventory system. Assume its accounting records provided the
following information at the end of the annual accounting period,
December 31.
| Transactions | Units | Unit Cost | |||||||
| Beginning inventory, January 1 | 3,200 | $ | 45 | ||||||
| Transactions during the year: | |||||||||
| a. | Purchase, January 30 | 4,550 | 55 | ||||||
| b. | Sale, March 14 ($100 each) | (2,850 | ) | ||||||
| c. | Purchase, May 1 | 3,250 | 75 | ||||||
| d. | Sale, August 31 ($100 each) | (3,300 | ) | ||||||
Assuming that for Specific identification method (item 1d) the
March 14 sale was selected two-fifths from the beginning inventory
and three-fifths from the purchase of January 30. Assume that the
sale of August 31 was selected from the remainder of the beginning
inventory, with the balance from the purchase of May 1.
Required:
| Amount of Goods Available for Sale | Ending Inventory | Cost of Goods Sold | |
| Last-in, first-out | |||
| Weighted average cost | |||
| First-in, first-out | |||
| Specific identification |
In: Accounting
LIFO Perpetual Inventory
The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period are as follows:
| Date | Transaction | Number of Units |
Per Unit | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Apr. 3 | Inventory | 90 | $450 | $40,500 | ||||
| 8 | Purchase | 180 | 540 | 97,200 | ||||
| 11 | Sale | 121 | 1,500 | 181,500 | ||||
| 30 | Sale | 76 | 1,500 | 114,000 | ||||
| May 8 | Purchase | 150 | 600 | 90,000 | ||||
| 10 | Sale | 90 | 1,500 | 135,000 | ||||
| 19 | Sale | 45 | 1,500 | 67,500 | ||||
| 28 | Purchase | 150 | 660 | 99,000 | ||||
| June 5 | Sale | 90 | 1,575 | 141,750 | ||||
| 16 | Sale | 120 | 1,575 | 189,000 | ||||
| 21 | Purchase | 270 | 720 | 194,400 | ||||
| 28 | Sale | 135 | 1,575 | 212,625 | ||||
Required:
1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.
2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.
| Total sales | $ |
| Total cost of goods sold | $ |
| Gross profit from sales | $ |
3. Determine the ending inventory cost as of
June 30.
$
In: Accounting
Exercise 8-5 Manufacturing Overhead Budget [LO8-6]
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
| Budgeted direct labor-hours | 10,000 | 9,200 | 9,500 | 10,300 |
The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $4.50 per direct labor-hour and its total fixed manufacturing overhead is $68,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $17,000 per quarter.
Required:
1. Prepare the company’s manufacturing overhead budget for the upcoming fiscal year.
2. Compute the company’s predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
In: Accounting
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||
| Total cash receipts | $ | 270,000 | $ | 420,000 | $ | 300,000 | $ | 320,000 |
| Total cash disbursements | $ | 323,000 | $ | 293,000 | $ | 283,000 | $ | 303,000 |
The company’s beginning cash balance for the upcoming fiscal year
will be $38,000. The company requires a minimum cash balance of
$10,000 and may borrow any amount needed from a local bank at a
quarterly interest rate of 3%. The company may borrow any amount at
the beginning of any quarter and may repay its loans, or any part
of its loans, at the end of any quarter. Interest payments are due
on any principal at the time it is repaid. For simplicity, assume
that interest is not compounded.
Required:
Prepare the company’s cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)
In: Accounting
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||
| Total cash receipts | $ | 230,000 | $ | 380,000 | $ | 260,000 | $ | 280,000 |
| Total cash disbursements | $ | 295,000 | $ | 265,000 | $ | 255,000 | $ | 275,000 |
The company’s beginning cash balance for the upcoming fiscal year
will be $30,000. The company requires a minimum cash balance of
$10,000 and may borrow any amount needed from a local bank at a
quarterly interest rate of 3%. The company may borrow any amount at
the beginning of any quarter and may repay its loans, or any part
of its loans, at the end of any quarter. Interest payments are due
on any principal at the time it is repaid. For simplicity, assume
that interest is not compounded.
Required:
Prepare the company’s cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)
In: Accounting
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||
| Total cash receipts | $ | 320,000 | $ | 440,000 | $ | 370,000 | $ | 390,000 |
| Total cash disbursements | $ | 372,000 | $ | 342,000 | $ | 332,000 | $ | 352,000 |
The company’s beginning cash balance for the upcoming fiscal year
will be $27,000. The company requires a minimum cash balance of
$10,000 and may borrow any amount needed from a local bank at a
quarterly interest rate of 3%. The company may borrow any amount at
the beginning of any quarter and may repay its loans, or any part
of its loans, at the end of any quarter. Interest payments are due
on any principal at the time it is repaid. For simplicity, assume
that interest is not compounded.
Required:
Prepare the company’s cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)
In: Accounting
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||
| Total cash receipts | $ | 320,000 | $ | 440,000 | $ | 370,000 | $ | 390,000 |
| Total cash disbursements | $ | 372,000 | $ | 342,000 | $ | 332,000 | $ | 352,000 |
The company’s beginning cash balance for the upcoming fiscal year
will be $27,000. The company requires a minimum cash balance of
$10,000 and may borrow any amount needed from a local bank at a
quarterly interest rate of 3%. The company may borrow any amount at
the beginning of any quarter and may repay its loans, or any part
of its loans, at the end of any quarter. Interest payments are due
on any principal at the time it is repaid. For simplicity, assume
that interest is not compounded.
Required:
Prepare the company’s cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)
In: Accounting
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||
| Total cash receipts | $ | 280,000 | $ | 430,000 | $ | 310,000 | $ | 330,000 |
| Total cash disbursements | $ | 330,000 | $ | 300,000 | $ | 290,000 | $ | 310,000 |
The company’s beginning cash balance for the upcoming fiscal year
will be $40,000. The company requires a minimum cash balance of
$10,000 and may borrow any amount needed from a local bank at a
quarterly interest rate of 3%. The company may borrow any amount at
the beginning of any quarter and may repay its loans, or any part
of its loans, at the end of any quarter. Interest payments are due
on any principal at the time it is repaid. For simplicity, assume
that interest is not compounded.
Required:
Prepare the company’s cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)
In: Accounting
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||
| Total cash receipts | $ | 340,000 | $ | 460,000 | $ | 390,000 | $ | 410,000 |
| Total cash disbursements | $ | 386,000 | $ | 356,000 | $ | 346,000 | $ | 366,000 |
The company’s beginning cash balance for the upcoming fiscal year
will be $24,000. The company requires a minimum cash balance of
$10,000 and may borrow any amount needed from a local bank at a
quarterly interest rate of 3%. The company may borrow any amount at
the beginning of any quarter and may repay its loans, or any part
of its loans, at the end of any quarter. Interest payments are due
on any principal at the time it is repaid. For simplicity, assume
that interest is not compounded.
Required:
Prepare the company’s cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)
In: Accounting
Kick and Swing Inc. is a wholesaler of sporting goods equipment for retailers in a local metropolitan area. The company buys sporting goods equipment direct from manufacturers and then resells them to individual retail stores in the regional area. The raw data in Figure 14-20 illustrate some of the information required for the company’s purchase order system. As you can see, this information is characteristic of accounting purchase order systems but is not well organized. In fact, because of the repeating groups in the right-most columns, it cannot even be stored in a database.
| Purchase Order Number | Date | Customer Number | Customer Name | Customer Phone Number | Item Number | Item Description | Unit Cost | Unit | Quantity Ordered |
| 12345 | 01/03/2011 | 123-8209 | Charles Dresser, Inc. | (752)433-8733 | X32655 | Baseballs | $33.69 | dozen | 20 |
| X34598 | Footballs | 53.45 | dozen | 10 | |||||
| Z34523 | Bball Hoops | 34.95 | each | 20 | |||||
| 12346 | 01/03/2011 | 123-6733 | Patrice Schmidt’s | (673)784-4451 | X98673 | Softballs | 35.89 | dozen | 10 |
| X34598 | Footballs | 53.45 | dozen | 5 | |||||
| Sports | X67453 | Soccer balls | 45.36 | dozen | 10 |
FIGURE 14-20 Some purchasing data for Kick and Swing.
Requirements
Store this data in a spreadsheet to make it easy to manipulate. Then perform each of the following tasks in turn:
In: Accounting