Best Tractors, Inc. Manufacturers high quality tractors for farmers. On April 1, a merchandizer purchased two tractors, A and B. The cost of unit A was $650, cost of unit B was $625. On April 30, the company hadn't sold the inventory. The net realizable value of unit A was now $685 while the net realizable of unit B was $550. The adjustment associated with the lower of cost and net realizable value on April 30 will be? 1. Debit costs of good sold: 40 Credit inventory: 40 2. Debit inventory: 40 Credit cost of goods sold: 40 3. Debit cost of goods sold: 75 Credit inventory: 75 4. Debit inventory: 75 Credit Cost of Goods Sold: 75

Q: Company XYZ is a smart phone merchant. The company purchases smart phones directly from the…

A: The questions are multiple choice questions Required  Chooze the Correct Option.

Q: Madison Ironworks made 400 defective units last month. Fortunately, the units were identified as…

A: Relevant cost : It is a cost that is relevant to a particular decision and differs between…

Q: lberg Associates, antique dealers, purchased goods for $38,700. Terms of the purchase were FOB…

A: Solution: Cost of inventory includes all those costs which are incurred to bring the inventory in…

Q: Sheffield, Inc. has 8 computers which have been part of the inventory for over two years. Each…

A: Cost of computer      =    $550 Selling price             =   $940 Replacement cost =     $350…

Q: Walberg Associates, antique dealers, purchased goods for $38,100. Terms of the purchase were FOB…

A: Cost of inventory includes the cost of purchase material/goods, freight, and any taxes paid by the…

Q: A woodland furniture trading company sells furniture to its customers. A table that cost the company…

A: Net relizable value = Expected sales price - cost to sell = OMR 1950 - OMR 35 = OMR 1915

Q: Blue Barns sold 136 gallons of paint at P31 per gallon on July 6 to a customer with a cost of P19…

A: Credit terms 2/15, n/45 means that 25 discount will be allowed to customer if payment is being made…

Q: A distributor of artistic iron-based fixtures acquires a piece for $1,000, terms FOB shipping point.…

A: Cost of Inventory: It can be defined as the cost of buying the merchandise, deducting any discount…

Q: ABC LTD sold 3000 bread loafs to XYZ Bakers in the year 2011 costing R1 each. XYZ Bakers has the…

A: Revenue - Revenue is the income earned during the financial year. It should be credited in the…

Q: [The following information applies to the questions displayed below.]   Hult Games buys electronic…

A: Effective price refers to the price that should b come after deducting the discount. It is simply…

Q: Walberg Associates, antique dealers, purchased goods for $39,500. Terms of the purchase were FOB…

A: Solution: Cost of inventory includes purchase price, transit insurance, freight and all other cost…

Q: U-Save Automotive Group purchased 10 vehicles during the current month. Two trucks were purchased…

A: Specific identification method can be applied in situations where different purchases can be…

Q: A car dealer acquires a used car for $12,000, with terms FOB shipping point. Compute total inventory…

A: The inventory cost is the cost incurred in bringing a product to sale and making it available for…

Q: Crane, Inc. has 8 computers which have been part of the inventory for over two years. Each computer…

A: Inventory is reported as the lower cost or market value under GAAP, and market value is specified as…

Q: Company XYZ is a smart phone merchant. The company purchases smart phones directly from the…

A: Gross margin of the business means sales revenue after deducting cost of goods sold from sales…

Q: Varto Company has 12.200 units of its product in inventory that it produced last year at a cost of…

A: Solution: In order to perform Sell as is or process further analysis, we should compare incremental…

Q: Bashful Ltd. began business on January 1 and sells high performance motor scooters. The company…

A: The inventory can be valued using various methods as average method, LIFO and FIFO.

Q: Great Harvest Bakery purchased bread ovens from New Morning Bakery. New Morning Bakery was closing…

A:

Q: Prepare journal entries, including adjustments to record the above transactions assuming the company…

A: Journal entry under both system as well as calculation of cost of goods sold are as follows.

Q: n 2019 the company has produced 8 000 units. According to the Accountant’s calculations the unit…

A: Gross Profit is arrived at by deducting the cost of goods sold from sales. However, if the cost of…

Q: Company XYZ is a smart phone merchant. The company purchases smart phones directly from the…

A: Gross Margin = Sales- Cost of goods sold Sales : 50*1100 =  55000 Cogs : 50*800 = 40000 Gross…

Q: Tamara Company began the year with three items in beginning inventory, each costing $4. During the…

A: Total sales = no. of units sold x sales price per unit = 7 units x $9 per unit = $63

Q: The trial balance of Esplanade Company showed inventories of P164,000. The inventories include some…

A: Defective goods: Improperly packaged or faulty goods are those that do not conform to the contract.…

Q: Switzer, Inc. has 5 computers which have been part of the inventory for over two years. Each…

A: The inventory cost per unit is calculated below, Inventory cost per unit = Cost or market value,…

Q: A commercial company bought 250 units of a specific material at a price of 50,000 dinars per unit,…

A: Cost of the material purchased: All the expenses that are incurred to bring the material to the…

Q: Bramble Corp. began the year with 10 units of marine floats at a cost of $12 each. During the year,…

A: First in first out: It refers to the method of inventory valuation that calculates the balance of…

Q: Walberg Associates, antique dealers, purchased goods for $75,000. Terms of the purchase were FOB…

A: Cost of inventory = Purchases + Transportation In + Shipment insurance + Cleaned and refurbished…

Q: On March 10, 2017, Steele Company sold to Barr Hardware 200 tool sets at a price of $50 each (cost…

A: (a) Prepare journal entries for Steele to record (1) the sale on March 10, 2017, (2) the return on…

Q: December 1 Ritchie sold 14 go-karts on account. The selling price of each go-kart was $1,9003; the…

A: The question is based on the concept of Financial Accounting.

Q: Several finished products are listed in the inventory account. One such product, X444, is carried at…

A: The decision with regards to the sale or further process can be taken by estimating the net cash…

Q: .  Prepare summary journal entries to record the purchases, sales, and return of inventory. Assume…

A: Whenever a Company Perpetual method of inventory then the inventory records are maintained…

Q: PIOLO produces a main product TEDDY BEAR together with a by-product WIRE. There was no beginning…

A: The Company  produces a main product TEDDY BEAR together with a by-product WIRE. There was no…

Q: Crane, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss…

A: Introduction: A company's net income commonly refers to its net profit or net earnings. Net earnings…

Q: Leslie’s Pool Supply, a retailer, pays $285 for a diving board. The original selling price was $399,…

A: Given: Cost =$285Original selling price =$399Markdown =40%Operating expense =30% of cost

Q: Walberg Associates, antique dealers, purchased goods for $37,500. Terms of the purchase were FOB…

A: Cost of the inventory = Purchase price + Freight + Insurance during transit + Cleaned and…

Q: SUI sells presses. At December 31, 2011, SUI’s inventory amounted to $500,000. During the firstweek…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: The trial balance of Magic Shop Company showed inventories of P164,000. The inventories include some…

A: Cost of goods produced:   It is the cost incurred by the company in producing the goods. It includes…

Q: When a Mercator manufacturing Inc. checked its stores, it had the following inventory on hand as at…

A: a) Table Showing Closing Inventory Value as on date December 31:   Inventory Quantity Price…

Q: Company XYZ is a smart phone merchant. The company purchases smart phones directly from the…

A: Solution:- Calculation of gross profit margin as follows under:-

Q: year, the following events occurred: Summer Company is a wholesaler of car seatcovers. At the…

A: Inventory is the raw materials used in production as well as the goods that are available for sale.…

Q: Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list…

A: Capital costs are typically long-term (more than one year), fixed assets that are expected to…

Q: XYZ, Inc. sold 100 widgets to ABC, Inc. on 1/1/18 for $50 per widget on account. The sales agreement…

A: Solution 1- A potential return of any goods sold to a customer should be accounted for as per…

Q: Summer Company is a wholesaler of car seatcovers. At the beginning of the current year, the entity's…

A: Inventory:-  Inventory is defined as the goods or materials which is held by particular company in…

Q: I am working on a problem that involves using FIFO, LIFO and average cost.  I tried practicing the…

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.