The Department of Roads for a large Canadian city has several depots throughout the city where they store rock- salt. The rock-salt is used during the winter. The fiscal year starts on April 1 and ends on the following March 31. At April 1 2021, they had an inventory of 2,000 tons of rock-salt worth $800,000. The following are transactions occurred during the fiscal year:< Summer and Fall 2021: Purchased 68,000 tons at an average price of $300/ton< Months of December 2021 and January 2022: used 62,000 tons February 1 2022: purchased 40,000 tons at $505/ton Month of February 2022: used 20,000 tons March 12 2022: helped a neighbouring city that had run out of salt by giving them 20,000 tons in exchange for equipment worth $12.2 million Required: 1. Calculate the value of the rock salt in the remaining inventory at March 31 2022 based on: FIFO • Weighted average - Periodic 2. Which method of inventory valuation do you recommend they use? Explain your response.<

The Department of Roads for a large Canadian city has several depots throughout the city where they store rock- salt. The rock-salt is used during the winter. The fiscal year starts on April 1 and ends on the following March 31. At April 1 2021, they had an inventory of 2,000 tons of rock-salt worth $800,000. The following are transactions occurred during the fiscal year:< Summer and Fall 2021: Purchased 68,000 tons at an average price of $300/ton< Months of December 2021 and January 2022: used 62,000 tons February 1 2022: purchased 40,000 tons at $505/ton Month of February 2022: used 20,000 tons March 12 2022: helped a neighbouring city that had run out of salt by giving them 20,000 tons in exchange for equipment worth $12.2 million Required: 1. Calculate the value of the rock salt in the remaining inventory at March 31 2022 based on: FIFO • Weighted average - Periodic 2. Which method of inventory valuation do you recommend they use? Explain your response.<

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On June 1, 2013, COG Company in Baguio established a sales agency in La Trinidad, Benguet.Upon the establishment of the sales agency, the home office sent merchandise samples costingP8,000 and a cash working fund of P3,000 to be maintained on the imprest basis.During the month of June, the sales agency reported to the home office sales orders. These werebilled at P70,000, of which P40,000 was collected. The sales agency paid expenses of P2,800 but wasreimbursed by the home office. On June 30, 2013, the sales agency samples were valued at P6,000.It was estimated that the gross profit on goods shipped to fill sales agency sales orders averaged40% of cost. What is the net income of the sales agency for the month of June 30, 2013?
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Listed below are selected transactions of Baileys’ Department Store for the current year ending December 31. 1. On December 5, the store received $500 from the Jackson Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15. 2. During December, cash sales totaled $798,000, which includes the 5% sales tax that must be remitted to the state by the fifteenth day of the following month. 3. On December 10, the store purchased for cash three delivery trucks for $120,000. The trucks were purchased in a state that applies a 5% sales tax. 4. The store determined it will cost $100,000 to restore the area (considered a land improvement) surrounding one of its store parking lots, when the store is closed in 2 years. Baileys’ estimates the fair value of the obligation at December 31 is $84,000. 5. As a result of uninsured accidents during the year, personal injury suits for $350,000 and $60,000 have been filed against the…
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