York Co. sells one product, which it purchases from various suppliers. York's trial balance at December 31, 2021, included the following accounts: Sales (33,000 units @ $16) S 528,000 Sales discounts 7,500 Purchases 380,600 Purchase discounts 18,000 Freight-in 5,000 Freight-out 11,000 York Co.'s inventory purchases during 2021 were as follows: Total Units Cost per Unit Cost Beginning inventory 7,000 s 7.70 $ 53,900 Purchases, quarter ended March 31 13,000 7.50 97,500 Purchases, quarter ended June 30 15,000 7.9 118,500 Purchases, quarter ended September 30 12,000 8.25 99,000 Purchases, quarter ended December 31 8,000 8.20 65,600 55,000 $ 434,500 Additional Information: a. York's accounting policy is to report inventory in its financial statements at the lower of cost or net realizable va applied to total inventory. Cost is determined under the first-in, first-out (FIFO) method. b. York has determined that, at December 31, 2021, the net realizable value was $8.00 per unit. Required: la. Prepare York's schedule of cost of goods sold. York includes inventory write-down losses in cost of goods sold. 1b. Prepare York's schedule of ending inventory. 2. Determine whether inventory should be reported at cost or net realizable value.
York Co. sells one product, which it purchases from various suppliers. York's trial balance at December 31, 2021, included the following accounts: Sales (33,000 units @ $16) S 528,000 Sales discounts 7,500 Purchases 380,600 Purchase discounts 18,000 Freight-in 5,000 Freight-out 11,000 York Co.'s inventory purchases during 2021 were as follows: Total Units Cost per Unit Cost Beginning inventory 7,000 s 7.70 $ 53,900 Purchases, quarter ended March 31 13,000 7.50 97,500 Purchases, quarter ended June 30 15,000 7.9 118,500 Purchases, quarter ended September 30 12,000 8.25 99,000 Purchases, quarter ended December 31 8,000 8.20 65,600 55,000 $ 434,500 Additional Information: a. York's accounting policy is to report inventory in its financial statements at the lower of cost or net realizable va applied to total inventory. Cost is determined under the first-in, first-out (FIFO) method. b. York has determined that, at December 31, 2021, the net realizable value was $8.00 per unit. Required: la. Prepare York's schedule of cost of goods sold. York includes inventory write-down losses in cost of goods sold. 1b. Prepare York's schedule of ending inventory. 2. Determine whether inventory should be reported at cost or net realizable value.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter13: Accounting For Merchandise Inventory
Section: Chapter Questions
Problem 1MP: Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2,...
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Transcribed Image Text:York Co. sells one product, which it purchases from various suppliers. York's trial balance at December 31, 2021,
included the following accounts:
Sales (33,000 units @ $16) $ 528,000
Sales discounts
7,500
Purchases
380,600
Purchase discounts
18,000
Freight-in
5,000
Freight-out
11,000
York Co.'s inventory purchases during 2021 were as follows:
Total
Units
Cost per Unit
Cost
Beginning inventory
7,000
7.70
$ 53,900
Purchases, quarter ended March 31
13,000
7.50
97,500
Purchases, quarter ended June 30
15,000
7.90
118,500
Purchases, quarter ended September 30 12,000o
8.25
99,000
Purchases, quarter ended December 31 8,000
8.20
65,600
55,000
$ 434,500
Additional Information:
a. York's accounting policy is to report inventory in its financial statements at the lower of cost or net realizable value,
applied to total inventory. Cost is determined under the first-in, first-out (FIFO) method.
b. York has determined that, at December 31, 2021, the net realizable value was $8.00 per unit.
Required:
la. Prepare York's schedule of cost of goods sold. York includes inventory write-down losses in cost of goods sold.
1b. Prepare York's schedule of ending inventory.
2. Determine whether inventory should be reported at cost or net realizable value.
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