ACC 422 FInal Exam

Presented below is information related to Rembrandt Inc.'s inventory.

(per unit)	Skis	Boots	Parkas
Historical cost	$255.93	$142.78	$71.39
Selling price	292.30	195.32	99.34
Cost to distribute	25.59	10.78	3.37
Current replacement cost	273.44	141.44	68.70
Normal profit margin	43.10	39.06	28.62

Determine the following:

(a)

the two limits to market value (e.g., the ceiling and the floor) that should be used in the lower of cost or market computation for skis; (Round answers to 2 decimal places, e.g. 20.25.)

Ceiling		$
Floor		$
(b)	the cost amount that should be used in the lower of cost or market comparison of boots; *(Round answer to 2 decimal places, e.g. 20.25.)*

Cost amount		$
(c)	the market amount that should be used to value parkas on the basis of the lower of cost or market. *(Round answer to 2 decimal places, e.g. 20.25.)*

Market amount

3. Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 55 units that cost $33 each. During June, the company purchased 166 units at $33 each, returned 7 units for credit, and sold 138 units at $55 each. Journalize the June transactions.

Description/Account

Choose One for Each

Debit

Credit

Sales,Inventory,Accounts receivable,Accounts payable,Cost of goods sold

Cost of goods sold,Accounts payable,Inventory,Accounts receivable,Sales

(To record inventory purchased.)

Inventory,Accounts receivable,Sales,Cost of goods sold,Accounts payable

Accounts receivable,Sales,Cost of goods sold,Inventory,Accounts payable

(To record inventory returned.)

Sales,Accounts receivable,Inventory,Cost of goods sold,Accounts payable

Cost of goods sold,Sales,Inventory,Accounts payable,Accounts receivable

(To record inventory sold.)

Sales,Accounts payable,Inventory,Cost of goods sold,Accounts receivable

Accounts receivable,Sales,Inventory,Cost of goods soldAccounts payable

(To record cost of goods sold.)

Question 4

Amsterdam Company uses a periodic inventory system. For April, when the company sold 700 units, the following information is available.

	Units	Unit Cost	Total Cost
April 1 inventory	250	$17	$4,250
April 15 purchase	400	20	8,000
April 23 purchase	350	22	7,700
	1,000		$19,950

Compute the April 30 inventory and the April cost of goods sold using the average cost method. (Round computations for cost per unit to 2 decimal places, e.g. 10.25 and answers to 0 decimal places, e.g. 2,250.)

Question 6

(FIFO, LIFO, Average Cost Inventory)

Esplanade Company was formed on December 1, 2011. The following information is available from Esplanade's inventory records for Product BAP.

	Units	Unit Cost
January 1, 2012 (beginning inventory)	792	$8.00
Purchases:
January 5, 2012	1,584	9.00
January 25, 2012	1,716	10.00
February 16, 2012	1,056	11.00
March 26, 2012	792	12.00

A physical inventory on March 31, 2012, shows 2,112 units on hand.

Prepare schedules to compute the ending inventory at March 31, 2012, under each of the following inventory methods. Assume Esplanade Company uses the periodic inventory method.

(a)		FIFO
	ESPLANADE COMPANY
	Computation of Inventory for Product BAP
	BAP under FIFO Inventory Method
	March 31, 2012
			Units	Unit Cost	Total Cost
	March 26, 2012			$	$
	February 16, 2012
	January 25, 2012
	March 31, 2012, inventory				$

(b)		LIFO
	ESPLANADE COMPANY
	Computation of Inventory for Product BAP
	BAP under LIFO Inventory Method
	March 31, 2012
			Units	Unit Cost	Total Cost
	Beginning inventory			$	$
	January 5, 2012
	March 31, 2012, inventory				$

(c)	Weighted average *(Round weighted average cost to 2 decimal places, e.g. 2.25 and use this rounded amount for future calculations. Round the inventory on March to 0 decimal places, e.g. 1,250.)*
		ESPLANADE COMPANY
		Computation of Inventory for Product BAP
		BAP under Weighted Average Inventory Method
		March 31, 2012
					Units	Unit Cost	Total Cost
		Beginning inventory				$	$
		January 5, 2012
		January 25, 2012
		February 16, 2012
		March 26, 2012
							$
			Weighted Average cost	$

			March 31, 2012, inventory	$

Question 5

Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.

	Units	Unit Cost	Total Cost
April 1 inventory	250	$15	$3,750
April 15 purchase	400	18	7,200
April 23 purchase	350	20	7,000
	1,000		$17,950

Compute the April 30 inventory and the April cost of goods sold using the FIFO method.

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