Acc308 Financial Accounting: Exam #2 (5 Problems)

Acc308 Financial Accounting
EXAM #2

Use the following information for problems #1, 2 and 3
Beginning Balance January 1 80 units @ $50 each $4,000
Purchase January 18 40 units @ $51 each
Purchase January 28 40 units at $52 each
Sales January 12 30 units
Sales January 22 30 units
Sales January 31 45 units

1. 15 Points
Compute the ending inventory and cost of goods sold assuming LIFO perpetual inventory system.

2. 15 Points
Compute the ending inventory and cost of goods sold assuming LIFO periodic inventory system.

3. 15 Points
Compute the ending inventory and cost of goods sold assuming average cost (or weighted average) perpetual inventory system.

4. Dymek Sports, Inc. has four products in its inventory. Information about the December 31, 2014 inventory is as follows:
Product Total Total Total Net
Cost Replacement Realizable
Cost Value
Gloves $360,000 $330,000 $300,000
Bats 260,000 240,000 320,000
Balls 150,000 110,000 125,000
Uniforms 600,000 560,000 950,000
The normal gross profit percentage is 20% of cost.

a. 30 Points
Determine the balance sheet inventory carrying value at December 31, 2014, assuming the LCM rule is applied to individual products.

b. 10 Points
Assuming that Dymek recognizes an inventory write-down as a separate income statement item, determine the amount of the loss, and present the journal entry.

5. 15 Points
Joel Company purchased the assets of Amy, Inc. at auction for $1,560,000. An independent appraisal of the market value of the assets is listed below:
Land $171,600
Building 514,800
Equipment 600,600
Inventories 429,000

Prepare the journal entry to record the purchase of the assets. Assume a 25% cash down payment with a mortgage for the balance.
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