Waterway, Inc. buys 1,000 video game CDs from a distributor who is discontinuing those games. The purchase price for the lot is $16,000. Waterway will group the CDs into three price categories for resale, as indicated below. Group No. of CDs 1 200 600 2 Group 1 Determine the cost per CD for each group, using the relative sales value method. (Do not round ratios for computational purposes. Round answers to 2 decimal places, e.g. 15.25.) 2 $ 200 16 Price per CD $5 10 15 Cost per CD

Waterway, Inc. buys 1,000 video game CDs from a distributor who is discontinuing those games. The purchase price for the lot is $16,000. Waterway will group the CDs into three price categories for resale, as indicated below. Group No. of CDs 1 200 600 2 Group 1 Determine the cost per CD for each group, using the relative sales value method. (Do not round ratios for computational purposes. Round answers to 2 decimal places, e.g. 15.25.) 2 $ 200 16 Price per CD $5 10 15 Cost per CD

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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Bell, Inc. buys 1,000 computer game CDs from a distributor who is discontinuing those games. The purchase price for the lot is $8,000. Bell will group the CDs into three price categories for resale, as indicated below. Group No. of CDs Price per CD 1 100 $05 2 800 010 3 100 015 Determine the cost per CD for each group, using the relative sales value method.
Fahey Company sells Stairmasters to a retailer, Physical Fitness, Inc., for $2,000,000. Fahey has a history of providing price concessions on this product if the retailer has difficulty selling the Stairmasters to customers. Fahey has experience with sales like these in the past and estimates that the maximum amount of price concessions is $300,000. Instructions a. Determine the amount of revenue that Fahey should recognize for the sale of Stairmasters to Physical Fitness, Inc. b. According to GAAP, in some situations, the amount of revenue recognized may be constrained. Explain how the accounting for the Stairmasters sales might be affected by the revenue constraint due to variable consideration or returns. c. Some believe that revenue recognition should be constrained by collectibility. Is such a view consistent with GAAP? Explain.
(a) Burnem, Inc. manufactures blank CDs and sells them to a distributor in packs of 500 CDs. Burnem’s total cost and total revenue (in dollars) for x packs of 500 CDs are given by Total Cost= 2x+ 7920 and Total Revenue = 20x How many packs of 500 CDs must Burnem sell to breakeven?
Zonker Inc. purchases 500 units of an item at an invoicecost of $30,000. What is the cost per unit? If the goods areshipped f.o.b. shipping point and the freight bill was$1,500, what is the cost per unit if Zonker Inc. pays thefreight charges? If these items were bought on 2/10, n/30terms and the invoice and the freight bill were paid withinthe 10-day period, what would be the cost per unit?
O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary club-fitting services. A full set of clubs with the fitting services sells for $1,500. Similar club-fitting services are offered by other vendors for $110, and O’Hara generally charges approximately 10% more than do other vendors for similar services. Estimate the stand-alone selling price of the club-fitting services using the adjusted market assessment approach.
TVLand sells home entertainment systems and also offers a complementary installation service. The same service is offered by other vendors for $50 on average, and TVLand typically charges approximately 40% more than other vendors for similar services on a stand-alone basis. Using the adjusted market assessment approach, the stand-alone selling price of the installation service is:
On January 1, 2030, KKK consigned 300 units of gaming keyboards to SSS Each keyboard costs P400 and is sold at 50% above cost. After selling 200 keyboards, the remaining 200 units were repaired for some defects for P4,000. Because of this, SSS increased the selling price by P60. At the end of the month, SSS remitted P129,960 after deducting 15% commission, and reimbursable expenses of P1700 delivery expense and the P4,000 repair of the 100 units. How many consigned units were sold?
During 2009, Accent Toys Plc., which began business in October of that year, purchased 10,000 units of a toy at a cost of ₤10 per unit in October. Th e toy sold well in October. In anticipation of heavy December sales, Accent purchased 5,000 additional units in November at a cost of ₤11 per unit. During 2009, Accent sold 12,000 units at a price of ₤15 per unit. Under the fi rst in, fi rst out (FIFO) method, what is Accent’s cost of goods sold for 2009? A . ₤120,000.
During 2009, Accent Toys Plc., which began business in October of that year, purchased 10,000 units of a toy at a cost of ₤10 per unit in October. Th e toy sold well in October. In anticipation of heavy December sales, Accent purchased 5,000 additional units in November at a cost of ₤11 per unit. During 2009, Accent sold 12,000 units at a price of ₤15 per unit. Under the fi rst in, fi rst out (FIFO) method, what is Accent’s cost of goods sold for 2009? B . ₤122,000.
During 2009, Accent Toys Plc., which began business in October of that year, purchased 10,000 units of a toy at a cost of ₤10 per unit in October. Th e toy sold well in October. In anticipation of heavy December sales, Accent purchased 5,000 additional units in November at a cost of ₤11 per unit. During 2009, Accent sold 12,000 units at a price of ₤15 per unit. Under the fi rst in, fi rst out (FIFO) method, what is Accent’s cost of goods sold for 2009? C . ₤124,000.
Zonker NV purchases 500 units of an item at an invoice cost of €30,000. What is the cost per unit? If the goods are shipped f.o.b. shipping point and the freight bill was €1,500, what is the cost per unit if Zonker pays the freight charges? If these items were bought on 2/10, n/30 terms and the invoice and the freight bill were paid within the 10-day period, what would be the cost per unit?
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