Homework Help is Here – Start Your Trial Now!
Business
Accounting
part a and b

part a and b

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 8P: Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning...
See similar textbooks
icon
Related questions
Question
Solve part a and b
When Mercator Manufacturing Inc. checked its stores, it had the following inventory on hand as at December 31, 2020: (i) 5,000 litres of lubricating oil that had cost $2.50 per litre: As at December 31, the selling price was $3.00 per litre. (ii) 50,000 kg of steel that had cost $0.50 per kg: As at December 31, the market price was $0.48 per kg. (iii) Spare parts that had cost $25,000: Mostly for production machinery that was no longer in use, so it was unlikely they could be used. They have no resale value. (iv) A replacement control unit for a customer's milling machine, which has a resale value of $10,000: The control unit was bought by the customer so that Mercator could use it to repair their milling machine. (v) $20,000 of electronic parts that were in good working order but had gone beyond their "sell by" dates on the packages. Required (a) Show how the inventory would appear in the balance sheet as at December 31, 2020. (b) If Mercartor Manufacturing's sales for 2020 totalled $500,000, cal- culate the following: • The inventory turnover ratio • The inventory holding period
Transcribed Image Text:When Mercator Manufacturing Inc. checked its stores, it had the following inventory on hand as at December 31, 2020: (i) 5,000 litres of lubricating oil that had cost $2.50 per litre: As at December 31, the selling price was $3.00 per litre. (ii) 50,000 kg of steel that had cost $0.50 per kg: As at December 31, the market price was $0.48 per kg. (iii) Spare parts that had cost $25,000: Mostly for production machinery that was no longer in use, so it was unlikely they could be used. They have no resale value. (iv) A replacement control unit for a customer's milling machine, which has a resale value of $10,000: The control unit was bought by the customer so that Mercator could use it to repair their milling machine. (v) $20,000 of electronic parts that were in good working order but had gone beyond their "sell by" dates on the packages. Required (a) Show how the inventory would appear in the balance sheet as at December 31, 2020. (b) If Mercartor Manufacturing's sales for 2020 totalled $500,000, cal- culate the following: • The inventory turnover ratio • The inventory holding period
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Double entry bookkeeping system
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
SEE MORE TEXTBOOKS