Connect Access Card for Financial Accounting: Information and Decisions
8th Edition
ISBN: 9781259662966
Author: John J Wild
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 2QS
Summary Introduction
Concept introduction:
A purchase can be made on two different types of shipping terms. FOB shipping point and FOB destination. Under the FOB shipping point term, the seller delivers the goods to the buyer at the shipping point and under the FOB destination; the seller delivers the goods to the buyer at the buyer’s place.
To calculate: the cost assigned to the used car.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Applying the Cost of Goods Sold Model
Charest Company has the following data for 2022:
Item
Units
Cost
Inventory, 12/31/2021
980
$10,780
Purchases
4,480
49,280
Inventory, 12/31/2022
750
8,250
Required:
1. How many units were sold?
2. Using the cost of goods sold model, determine the cost of goods sold.
What is the correct Cost of Goods Sold under the FIFO method given the following information? Beginning Inventory: 50
units @€10, Purchase 1: 15 units @€13, Purchase 2: 15 units @€15, Ending Inventory: 12 units. Assume that the sale
occurs after all inventory purchases.
Answer:
X
Using the FIFO method, calculate the cost of ending inventory and cost of goods sold for Carden
Corporation
Beginning
inventory
Purchases
Goods available for
sale
Ending inventory
Cost of goods sold
The cost of ending
inventory is
The cost of goods
sold is
Unit
Quantity Cost
70
130
200
50
$
150
S
Total
$3.00 $210
$7.00
$910
Chapter 5 Solutions
Connect Access Card for Financial Accounting: Information and Decisions
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Why are incidental costs sometimes ignored in...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Prob. 10DQ
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Prob. 14DQCh. 5 - Prob. 15DQCh. 5 - Prob. 16DQCh. 5 - Prob. 17DQCh. 5 - Prob. 1QSCh. 5 - Prob. 2QSCh. 5 - Prob. 3QSCh. 5 - Prob. 4QSCh. 5 - Prob. 6QSCh. 5 - Prob. 7QSCh. 5 - Prob. 8QSCh. 5 - Prob. 9QSCh. 5 - Prob. 10QSCh. 5 - Prob. 11QSCh. 5 - Refer to the information in QS 5-10 and assume the...Ch. 5 - Prob. 13QSCh. 5 - Prob. 14QSCh. 5 - Prob. 15QSCh. 5 - Prob. 16QSCh. 5 - Prob. 17QSCh. 5 - Identify the inventory costing method best...Ch. 5 - Prob. 19QSCh. 5 - Prob. 20QSCh. 5 - Prob. 21QSCh. 5 - Prob. 22QSCh. 5 - International accounting standards C1 C2 P2 Answer...Ch. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Laker Company reported following January purchases...Ch. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Prob. 10ECh. 5 - Prob. 11ECh. 5 - Inventory turnover and days sales in inventory A3...Ch. 5 - Periodic: Cost flow assumptions P1 Lopez Company...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Estimating ending inventory—gross profit method...Ch. 5 - Prob. 1PSACh. 5 - Prob. 2PSACh. 5 - Prob. 3PSACh. 5 - Prob. 5PSACh. 5 - Prob. 6PSACh. 5 - Prob. 7PSACh. 5 - QP Corp. sold 4,000 units of its product at $50...Ch. 5 - Prob. 9PSACh. 5 - Prob. 10PSACh. 5 - Prob. 1PSBCh. 5 - Prob. 2PSBCh. 5 - Prob. 3PSBCh. 5 - Prob. 4PSBCh. 5 - Prob. 5PSBCh. 5 - Prob. 6PSBCh. 5 - Prob. 7PSBCh. 5 - Prob. 8PSBCh. 5 - Prob. 9PSBCh. 5 - Prob. 10PSBCh. 5 - Santana Rey of Business Solutions is evaluating...Ch. 5 - Prob. 5.2SPCh. 5 - Prob. 2BTNCh. 5 - Golf Challenge Corp. is a retail sports store...Ch. 5 - Prob. 4BTNCh. 5 - Prob. 7BTNCh. 5 - Prob. 8BTNCh. 5 - Prob. 9BTN
Knowledge Booster
Similar questions
- Applying the Cost of Goods Sold Model Hempstead Company has the following data for 2019: Item Units Cost Inventory, 12/31/2018 990 $10,890 Purchases 4,510 49,610 Inventory, 12/31/2019 720 8,040 Required: 1. How many units were sold? ________1 units 2. Using the cost of goods sold model, determine the cost of goods sold.$ ___________arrow_forwardUsed Cars Inc. has the following inventory of vehicles: Cost NRV Vehicle A $ 25,000 $ 25,500 Vehicle B 50,000 40,000 Vehicle C 16,000 18,000 Vehicle D 22,000 21,500 $113,000 $105,000 In applying the lower of cost and net realizable value rule, by how much would Used Cars need to adjust its inventory?arrow_forwardSarah furniture Materials inventory Details, beginning P80,000.00, Purchases P55,000.00, Freight In P5,000.00, Freight out P2,000.00, Purchase discount P1,000.00 and Ending Materials inventory ending P38,000.00. How much is the material used in the production?arrow_forward
- REQUIRED: Determine the cost assigned to ending inventory and to cost of goods sold using LIFO. Each yellow cell must include a formula using cell references, EVEN IF THE FORMULA RESULT IS ZERO. Date Jan. 1 Beginning inventory Jan. 11: Sales Jan. 15 Purchase Jan. 17: Sales Jan, 21:Purchase Jan. 23: Sales Totals Units purchased Cost of Goods Sold - Perpetual LIFO: 560 840 890: Ending Inventory-Perpetual LIFO: 2,290 Calculate cost of goods sold for the January 11 sale of 450 units. Calculate cost of goods sold for the January 17 sale of 670 units. Cost per unit $14 17 19 Units Sold 450 Total Cost of Goods Sold for January - 1,920 units Units in Ending Inventory Total Cost Units Sold Selling Price Total Sales of Purchase per unit Total Ending Inventory for January - 370 units $7,840 14,280 16,910 $39,030 units @ units units@ 450 670 800 1,920 Cost per unit $14 $14 Cost per unit $40: $40 $40 per unit= units @ units $18,000 26,800 32,000 $76,800 Cost of Goods Sold $6,300 Inventory Balancearrow_forwardQ: Find out the following missing values Purchase price of the inventory Rs=1,200,000, + Freight-in Rs=8,000, Purchase returns Rs= 50,000, Purchase allowances Rs=10,000, Purchase discounts Rs= 28,000.Net purchases of inventory? Cost of Purchases Rs=15000, Cost of Goods available for sales Rs= 25000, Cost of beginning inventory Rs=? Cost of Goods available for sales Rs= 50,000, Cost of Goods sold Rs= 43000, Cost of Ending inventory Rs=? Sales Rs= 10,000, Gross Profit Rs= 3,000, Cost of Goods Sold Rs=? Gross profit Rs= 5,000, Gross Profit Percentage= 20%, Sales/Sales Revenue Rs=?arrow_forwardRecording an Inventory Purchase FSET Shields Company has purchased inventories incurring the following costs (a) the invoice amount of $660, financed through a $550 note with the remainder paid in cash, (b) shipping charges of $33 on account, (c) interest of $11 accrued on the $550 borrowed to finance the purchase, and (d) 59 on account for the cost of moving the inventory to the company's warehouse a. Determine the cost to be assigned to the inventory. b. Record the transactions using the financial statement effects template Note: Use negative signs with your answers, when appropriate Transaction Purchase inventory D. Shipping charges Interest on note d. Cost of moving inventory Cash Asset .... *995 OU Noncash Asset *>* Balance Sheet Liabilities **** Contributed Capital SSSS Earned Capital Revenues AAAA Income Statement Expenses ARAK Net Incomearrow_forward
- 1.c. Specific identification Goods Purchased Cost of Goods Sold Balance in Inventory Date Units Unit Cost Total $ Units Unit Cost Total $ Units Unit Cost Total $ Jan. 1 200 $2 3 400 $3 8 400 $5 10 15 300 $7 20 27 400 $7 Total COGS Required: Northgate Products Corp. sells gadgets and uses the perpetual inventory system. During the month of January 2019, the number of gadgets purchased and sold was as follows: Purchased Sold Balance in inventory Date Units Unit cost Total $ Units Unit cost Total $ Units Unit cost Total $ Jan. 1 200 $2 3 400 $3…arrow_forward( Appendices 6A and 6B) Inventory Costing Methods Edwards Company began operations in February 2019. Edwards accounting records provide the following data for the remainder of 2019 for one of the items the company sells: Â Edwards uses a periodic inventory system. All purchases and sales were for cash. Required: 1. Compute cost of goods sold and the cost of ending inventory using FIFO. 2. Compute cost of goods sold and the cost of ending inventory using LIFO. 3. Compute cost of goods sold and the cost of ending inventory using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 4. Prepare the journal entries to record these transactions assuming Edwards chooses to use the FIFO method. 5. CONCEPTUAL CONNECTION Which method would result in the lowest amount paid for taxes? 6. CONCEPTUAL CONNECTION Refer to Problem 6-67B and compare your results. What are the differences? Be sure to explain why the differences occurred.arrow_forwardEffects of Inventory Costing Methods Jefferson Enterprises has the following income statement data available for 2019: Jefferson uses a perpetual inventory accounting system and the average cost method. Jefferson is considering adopting the FIFO or LIFO method for costing inventory. Jeffersons accountant prepared the following data: Required: 1. Compute income before taxes, income taxes expense, and net income for each of the three inventory costing methods. (Round to the nearest dollar.) 2. CONCEPTUAL CONNECTION Why are the cost of goods sold and ending inventory amounts different for each of the three methods? What do these amounts tell us about the purchase price of inventory during the year? 3. CONCEPTUAL CONNECTION Which method produces the most realistic amount for net income? For inventory? Explain your answer.arrow_forward
- Inventory Costing Methods Andersons Department Store has the following data for inventory, purchases, and sales of merchandise for December. Andersons uses a perpetual inventory system. All purchases and sales were for cash. Required: 1. Compute cost of goods sold and the cost of ending inventory using FIFO. 2. Compute cost of goods sold and the cost of ending inventory using LIFO. 3. Compute cost of goods sold and the cost of ending inventory using the average cost method. ( Note: Use four decimal places for per-unit calculations.) 4. Prepare the journal entries to record these transactions assuming Anderson chooses to use the FIFO method. 5. CONCEPTUAL CONNECTION Which method would result in the lowest amount paid for taxes?arrow_forwardGoods in Transit Gravais Company made two purchases on December 29, 2019. One purchase for 3,000 was shipped FOB destination, and the second for 4,000 was shipped FOB shipping point. Neither purchase had been received nor paid for on December 31, 2019. Required: Which of these purchases, if either, does Gravais include in inventory on December 31, 2019? What is the cost?arrow_forwardUncle Butchs Hunting Supply Shop reports the following information related to inventory: Calculate Uncle Butchs ending inventory using the retail inventory method under the FIFO cost flow assumption. Round the cost-to-retail ratio to 3 decimal places.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning