Quiz 6 & 7
List the 4 inventory cost flow methods:
1-
2-
3-
4-
Digital enterprises uses a perpetual inventory system and has the following data available from inventory, purchases, and sales for the month of January:
Date Activity Units Purchase Price Sale price
Jan. 01 Beg. Inventory 110 8.40
Jan. 07 Purchase 1 640 9.10
Jan. 16 Sale 1 530 9.45
Jan. 24 Purchase 2 850 9.90
Jan. 30 Sale 2 920 11.00
Using the FIFO inventory method calculate the total cost of goods sold for the month, and the cost of ending inventory after the last sale including the number of
units in the ending inventory
Cost of gold sold = 13678
Cost of ending inventory = 1485
Number of units in ending INV = 150
Using the weighted average inventory method calculate te total cost of goods sold for the month, and the cost of ending inventory after he last sale including the
number of units in the ending inventory.
(*note: for calculations, round average cost out to four decimal places and total cost to nearest whole dollar)
Cost of goods sold = 13,702
Cost of ending inventory = 1,457
Number of units in ending INV = 150
Using Lifo inventory method calculate the total cost of goods sold for the month, and the cost of ending inventory after the last sale including the number of units
in the ending inventory
Cost of goods sold : 13,875
Cost of ending inventory: 1,288
Number of units in ending Inv: 150
Explain the Lifo conformity rule:
Suppose a company purchased land and a building for 19000000$ cash. The appraised value of the building was 13000000$ and the land wass appraised at 8000000$.
(note: for calculations round the nearst whole precentag before caucting the allocation of the purchase price)
What dolar amount o the purchase price will be allocated to the building account ?
11780000
What dollar amount o the purchase price will be allocated to the land account ?
7220000
At the beginning of 2013, Apu purchases a new squishee machine for the Kwik-E-Mart with a cost of 2000000$. The new machine has an estimated life of 10 years or 100000
units. The estimated salvage value is 20000$. During 2013, 11225 units were made with the new machine and during 2014, 13,500 units were made.
Calcualte the accumulated depreciation on December 31,2014 using units of production depreciation?
44505
What is the net book value at the end of 2015, using straight line depreciation?
146000
The galactic Federation purchases a new X-wing at the beginging of 2014 for 280000. The federation decided to depreciate the X-wing over a 5 yearr period using the
double-declining-balance method. The federation estimated the X-wing’s salvage value at 50000.
What is the depreciation xpense for December 31, 2015?
67200
The Empire is in desperate need of cash to fund the continuing war with the Rebellion so the Emperor and imperial officers decide to sell the death star and they put
it on Craiglist.com. The death star has a fair market value of 375 millins and they are able to find a buyer who pays them 400$ million. At the time of sale, the death
star is listed on the emppire’s balance sheet for 418$ millions. The empire had purchased the death star for 550$ millions and was depreciating it over 25 years using
the straight line method.
Record the Journal entry for the sale of the death star on December 18.2015.
Date Account description Debi Credit
Death star 550
Accum dep 132
cash 400
loss on sale 18
Quiz 1
Ute company reported the following items in its statement of cash flows presentd using the indirect method. Indicate whether each item should be classified as cash
flow from operating activities, a cash flow from investing activities,, or cash flow from financing activites?
Issuance of common stock: Cash flow from financing activities.
Sold equipment for cash: I
Receipit of cash dividend on investment: O
Repayment of principal on long term debt: F
Loss on disposal of equipment: O
Decrease in inventory: O
Paid a cash dividend to stockholders: F
Purchased equipment for cash: I
Issued long term debt: F
Depreciaton expense: F
Proceeds from sale of building: I
Interest paid on long term note payable: O
Increase in accounts payable: O
Taxes paid to the deeral government: O
An analysis of the balance sheet and income statement of Bacca Company revealed the following: net income $12750, Depreciation expense 32600$, Decrease in accounts
receivable 21500$, increase in inventory 18300$, increase in accounts payable 19800, A decrease in wages payable of 1200, and an increase in common stock 50000$
Calculate the net cash flow from operating activities using the indirect method?
12750
32600
+21500
-18300
19800
-1200
= 67150
So its 67150
Record the following activities into the journal entry format:
Your company has just made a sale for 375000$. The gross margin on this sale was 40%. The customer is paying you $200000 now and the rest at some later date.
Date Description Deit Credit
Cash 200000
375000
Revenune 175000
COGS 225000
Inventory 225000
You have purchased a building for 675000, and you paid cash
Date Description Debit Credit
Cash 675000
Purchase a buliding 675000
Pay an attorney for work that she will do at some later date. Pay her $50000
Date Description Debit Credit
Prepaid legal or attorney service 50000
cash 50000
Your ustomers are paying you $500000 for work that you will do at some later date.
Date Description Debit Credit
Cash 500000
Unearned Revenune 500000
Your customers that owed you are now paying you, $300000
Date Description Debit Credit
Cash 300000
Account recievable 300000
