\n

Week Three Exercise Assignment<\/h2>\n

Inventory<\/strong><\/p>\n

 <\/p>\n

1. Specific identification method<\/strong>. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows.<\/p>\n\n\n\n\n\n\n\n\n

\n                                         Painting<\/strong><\/p>\n<\/td>\n	\n                      Cost<\/strong><\/p>\n<\/td>\n<\/tr>\n
\n 1\/2 Beginning inventory<\/p>\n<\/td>\n	\n Woods <\/em><\/p>\n<\/td>\n	\n $11,000<\/p>\n<\/td>\n<\/tr>\n
\n 4\/19 Purchase<\/p>\n<\/td>\n	\n Sunset <\/em><\/p>\n<\/td>\n	\n 21,800<\/p>\n<\/td>\n<\/tr>\n
\n 6\/7 Purchase<\/p>\n<\/td>\n	\n Earth <\/em><\/p>\n<\/td>\n	\n 31,200<\/p>\n<\/td>\n<\/tr>\n
\n 12\/16 Purchase<\/p>\n<\/td>\n	\n Moon <\/em><\/p>\n<\/td>\n	\n 4,000<\/p>\n<\/td>\n<\/tr>\n
<\/td>\n	<\/td>\n	<\/td>\n	<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n  <\/p>\n Woods <\/span><\/em>and Moon <\/em>were sold during the year for a total of $35,000. Determine the firm\u00e2\u20ac\u2122s <\/span><\/p>\n a. cost of goods sold. <\/span><\/p>\n b. gross profit. <\/span><\/p>\n c. ending inventory. <\/span><\/p>\n 2.  Inventory valuation methods: basic computations<\/strong>. The January beginning inven\u00c2\u00adtory of the White Company consisted of 300 units costing $40 each. During the first quarter, the company purchased two batches of goods: 700 Units at $44 on February 21 and 800 units at $50 on March 28. Sales during the first quarter were 1,400 units at $75 per unit. The White Company uses a periodic inventory system. Using the White Company data, fill in the following chart to compare the results obtained under the FIFO, LIFO, and weighted-average inventory methods.<\/p>\n  <\/p>\n\n\n\n\n\n\n\n\n \n FIFO<\/span><\/p>\n<\/td>\n \n     LIFO <\/span><\/strong><\/span><\/p>\n<\/td>\n \n Weighted Average<\/p>\n<\/td>\n<\/tr>\n \n  <\/span><\/p>\n<\/td>\n \n  <\/span><\/strong><\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n  <\/span><\/p>\n Goods available for sale             <\/span><\/p>\n<\/td>\n \n    $ <\/span><\/p>\n<\/td>\n \n $ <\/span><\/p>\n<\/td>\n \n $ <\/span><\/p>\n<\/td>\n<\/tr>\n \n Ending inventory, March 31 <\/span><\/p>\n<\/td>\n<\/tr>\n \n Cost of goods sold <\/span><\/p>\n<\/td>\n<\/tr>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n  <\/p>\n  <\/p>\n 3. <\/span>Perpetual inventory system: journal entries<\/span><\/strong>. At the beginning of 20X3, Beehler Company implemented a computerized perpetual inventory system. The first transactions that occurred during 20X3 follow: <\/span><\/p>\n \u00c2\u00b7         <\/span><\/span>1\/2\/20X3 Purchases on account: 500 units @<\/span> <\/span>$4 =  $2,000 <\/span><\/p>\n \u00c2\u00b7         <\/span><\/span>1\/15\/20X3 Sales on account: 300 units @ $8.50 = $2,550 <\/span><\/p>\n \u00c2\u00b7         <\/span><\/span>1\/20\/20X3 Purchases on Account: 200 units @ $5 = $1,000<\/span><\/p>\n \u00c2\u00b7         <\/span><\/span>1\/25\/20X3 Sales on Account: 300 units @ $8.50 = $2,550<\/span><\/p>\n The company president examined the computer-generated journal entries for these transactions and was confused by the absence of a Purchases account.<\/span><\/p>\n a. Duplicate the journal entries that would have appeared on the computer printout under FIFO & LIFO.<\/span><\/p>\n b. Calculate the balance in the firm\u00e2\u20ac\u2122s Inventory account under each method. <\/span><\/p>\n c. Briefly explain the absence of the Purchases account to the company president.<\/span><\/p>\n  <\/p>\n 4. <\/span>Inventory valuation methods: computations and concepts<\/span><\/strong>. Wave Riders Surfboard Company began business on January 1 of the current year. Purchases of surfboards were as follows:<\/span><\/p>\n  <\/span><\/p>\n\n\n\n\n\n\n\n \n 1\/3: <\/span><\/p>\n<\/td>\n \n 100 boards  @<\/span> <\/span>$125 <\/span><\/p>\n<\/td>\n<\/tr>\n \n 3\/17: <\/span><\/p>\n<\/td>\n \n   50 boards @ $130 <\/span><\/p>\n<\/td>\n<\/tr>\n \n 5\/9: <\/span><\/p>\n<\/td>\n \n 246 boards @ $140 <\/span><\/p>\n<\/td>\n<\/tr>\n \n 7\/3: <\/span><\/p>\n<\/td>\n \n 400 boards @ $150 <\/span><\/p>\n<\/td>\n<\/tr>\n \n 10\/23: <\/span><\/p>\n<\/td>\n \n  74 boards  @<\/span> <\/span>$160 <\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n  <\/span><\/p>\n Wave Riders sold 710 boards at an average price of $250 per board. The company uses a periodic inventory system. <\/span><\/p>\n  <\/span><\/p>\n Instructions <\/span><\/em><\/span><\/p>\n a. Calculate cost of goods sold, ending inventory, and gross profit under each of the following inventory valuation methods: <\/span><\/p>\n \u00c2\u00b7                  <\/span><\/span>First-in, first-out <\/span><\/p>\n \u00c2\u00b7                  <\/span><\/span>Last-in, first-out <\/span><\/p>\n \u00c2\u00b7                  <\/span><\/span>Weighted average <\/span><\/p>\n  <\/span><\/p>\n b. Which of the three methods would be chosen if management\u00e2\u20ac\u2122s goal is to <\/span><\/p>\n (1) produce an up-to-date inventory valuation on the balance sheet? <\/span><\/p>\n (2) show the lowest net income for tax purposes? <\/span><\/p>\n  <\/p>\n 5. Depreciation methods. <\/strong>Betsy Ross Enterprises purchased a delivery van for $30,000 in January 20X7. The van was estimated to have a service life of 5 years and a resid\u00c2\u00adual value of $6,000. The company is planning to drive the van 20,000 miles annually. Compute depreciation expense for 20X8 by using each of the following methods:<\/p>\n a. Units-of-output, assuming 17,000 miles were driven during 20X8<\/p>\n b. Straight-line<\/p>\n c. Double-declining-balance<\/p>\n 6. Depreciation computations. <\/strong>Alpha Alpha Alpha, a college fraternity, purchased a new heavy-duty washing machine on January 1, 20X3. The machine, which cost $1,000, had an estimated residual value of $100 and an estimated service life of 4 years (1,800 washing cycles). Calculate the following:<\/p>\n a. The machine\u00e2\u20ac\u2122s book value on December 31, 20X5, assuming use of the straight-line depreciation method.<\/p>\n b. Depreciation expense for 20X4, assuming use of the units-of-output depreciation method. Actual washing cycles in 20X4 totaled 500.<\/p>\n c. Accumulated depreciation on December 31, 20X5, assuming use of the double-declining-balance depreciation method.<\/p>\n  <\/p>\n 7. Depreciation computations: change in estimate. <\/strong>Aussie Imports purchased a specialized piece of machinery for $50,000 on January 1, 20X3. At the time of acquisition, the machine was estimated to have a service life of 5 years (25,000 operating hours) and a residual value of $5,000. During the 5 years of operations (20X3 – 20X7), the machine was used for 5,100, 4,800, 3,200, 6,000, and 5,900 hours, respectively.<\/p>\n Instructions <\/em><\/p>\n a. Compute depreciation for 20X3 – 20X7 by using the following methods: straight line, units of output, and double-declining-balance.<\/p>\n b. On January 1, 20X5, management shortened the remaining service life of the machine to 20 months. Assuming use of the straight-line method, compute the company\u00e2\u20ac\u2122s depreciation expense for 20X5.<\/p>\n c. Briefly describe what you would have done differently in part (a) if Aussie Imports had paid $47,800 for the machinery rather than $50,000. In addition, assume that the company incurred $800 of freight charges $1,400 for machine setup and testing, and $300 for insurance during the first year of use.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Week Three Exercise Assignment Inventory   1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows.                                         Painting                      Cost 1\/2 Beginning inventory Woods $11,000 4\/19 Purchase Sunset 21,800 6\/7 Purchase Earth 31,200 12\/16 Purchase Moon 4,000           Woods and […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_joinchat":[]},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/122434"}],"collection":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/comments?post=122434"}],"version-history":[{"count":0,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/122434\/revisions"}],"wp:attachment":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/media?parent=122434"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/categories?post=122434"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/tags?post=122434"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}