5a. A company with a perpetual inventory system purchases 2,000 items of inventory for $50 per...
5a. A company with a perpetual inventory system purchases 2,000 items of inventory for $50 per item. The goods are shipped to the company as FOB destination. The freight cost is $1,000. The company then sells 1,100 items for $70 per item. These goods are shipped FOB destination to the customer at a cost of $450. Assuming that these are the only events that take place during this accounting period, what is the cost of inventory on hand at the end of the accounting period?
-
$46,000
-
$45,550
-
$24,000
-
$45,000
5b. What is Cost of Goods Sold? Gross margin? Operating income?
Homework Answers
Cost of goods purchased = Number of units purchased x Cost per unit
= 2,000 x 50
= $100,000
Since the goods are shipped to the company as FOB destination, freight cost of $1000 will be borne by the seller.
Ending inventory units = Number of units purchased - Number of units sold
= 2,000 - 1,100
= 900
Cost of ending inventory = Ending inventory units x Cost per unit
= 900 x 50
= $45,000
Fourth option is correct.
Sales = Number of units sold x Selling price per unit
= 1,100 x 70
= $77,000
Cost of goods sold = Number of units sold x Cost per unit
= 1,100 x 50
= $55,000
Gross margin = Sales - Cost of goods sold
= 77,000 - 55,000
= $22,000
Operating income = Gross margin - Freight out
= 22,000 - 450
= $21,550
Kindly give a positive rating if you are satisfied with the answer. Feel free to ask if you have any doubt. Thanks.
Add Answer to:
5a. A company with a perpetual inventory system
purchases 2,000 items of inventory for $50 per...
Accounting questions A) Cash os coating 53.000 or 55.000 with Using perpetual inventory, the entry to record a credit s...
Accounting questions
A) Cash os coating 53.000 or 55.000 with Using perpetual inventory, the entry to record a credit sale of S5000 Sales Revenue Inventory Cost of Goods Sold S3,000 B) Cash Service Revenue C) Accounts Receivable S5,000 $3.000 $5,000 $3.000 $3,000 D) Service Revenue S5,000 Accounts Receivable S5,000 Sales Revenue Cost of Goods Sold S3,000 Inventory $3,000 $5,000 29. Waggy Company identi Indicate whether each item should each item should be included or excluded from the inventory taking ems...
F. INVENTORY ERRORS AND ESTIMATION (10 Marks) For each of the independent events listed below. using...
F. INVENTORY ERRORS AND ESTIMATION (10 Marks) For each of the independent events listed below. using a perpetual inventory system, analyze the mos on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item. Code: o item is overstated U = item is understated NA item is not affected Owner's Cost of Net Assets Equity Goods Sold Income Events O M O The ending inventory in the previous...
Peete Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each...
Peete Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking. (a) 900 units of inventory shipped on consignment by Peete to another company. (b) 3,000 units of inventory in transit from a supplier shipped FOB destination. (c) 1,200 units of inventory sold but being held for customer pickup. (d) 500 units of inventory held on consignment from another company. We were unable to transcribe...
2. For each of the independent events listed below, analyze the impact on the indicated items...
2. For each of the independent events listed below, analyze the impact on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item. (20%) Code: 0 = item is overstated U = item is understated NA = item is not affected Items Cost of Goods Sold Net Income Assets Equity Events 1. A physical count of goods on hand at the end of the current year resulted in...
Question 2 (3 points) A company that uses the perpetual inventory method purchases inventory of $2,000...
Question 2 (3 points) A company that uses the perpetual inventory method purchases inventory of $2,000 on account FOB shipping point with terms of 2/10 net/30. Which of the following entries would be made to record full payment to the seller the payment is made within 10 days? OA) The accounting entry would be a $2,060 debit to Accounts Payable, a $40 debit to Inventory and a $2,100 credit to Cash. OB) The accounting entry would be a $1,100 debit...
P7-1 (Algo) Analyzing Items to Be Included in Inventory L07-1 Travis Company has just completed a...
P7-1 (Algo) Analyzing Items to Be Included in Inventory L07-1 Travis Company has just completed a physical inventory count at year-end, December 31 of the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to $67,000. During the audit, the independent CPA developed the following additional information: a. Goods costing $810 were being used by a customer on a trial basis and were...
Powell Company uses the gross method and a perpetual inventory system. Assuming the following entries, compute...
Powell Company uses the gross method and a perpetual inventory system. Assuming the following entries, compute the amount that Powell Company received on November 20. November 9 Sold goods costing $5,400 to Alexander Company on account, $9,000, terms 4/10, n/30. The goods are shipped FOB Shipping Point, Freight Prepaid by Seller, $50. November 15 Alexander Company returned undamaged merchandise previously purchased on account, $1,100. November 20 Received the amount due from Alexander Company.
Travis Company has just completed a physical Inventory count at year-end, December 31 or the current...
Travis Company has just completed a physical Inventory count at year-end, December 31 or the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to 565,700. During the audit, the independent CPA developed the following additional Information: a. Goods costing $870 were being used by a customer on a trial basis and were excluded from the inventory count at December 31 of the...
Travis Company has just completed a physical Inventory count at year-end, December 31 of the current...
Travis Company has just completed a physical Inventory count at year-end, December 31 of the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to $65,700. During the audit, the independent CPA developed the following additional Information a Goods costing $870 were being used by a customer on a trial basis and were excluded from the inventory count at December 31 of the...
E7-1 LO7-1 Analyzing Items to Be Included in Inventory Based on its physical count of inventory...
E7-1 LO7-1 Analyzing Items to Be Included in Inventory Based on its physical count of inventory in its warehouse at yearend, December 31 of the current year, Plummer Company planned to report inventory of $34,000. During the audit, the independent CPA devel oped the following additional information: a. Goods from a supplier costing $700 are in transit with UPS on December 31 of the current year. The terms are FOB shipping point (explained in the Required" section). Because these goods...
Accounting questions
A) Cash os coating 53.000 or 55.000 with Using perpetual inventory, the entry to record a credit sale of S5000 Sales Revenue Inventory Cost of Goods Sold S3,000 B) Cash Service Revenue C) Accounts Receivable S5,000 $3.000 $5,000 $3.000 $3,000 D) Service Revenue S5,000 Accounts Receivable S5,000 Sales Revenue Cost of Goods Sold S3,000 Inventory $3,000 $5,000 29. Waggy Company identi Indicate whether each item should each item should be included or excluded from the inventory taking ems...
F. INVENTORY ERRORS AND ESTIMATION (10 Marks) For each of the independent events listed below. using a perpetual inventory system, analyze the mos on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item. Code: o item is overstated U = item is understated NA item is not affected Owner's Cost of Net Assets Equity Goods Sold Income Events O M O The ending inventory in the previous...
Peete Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking. (a) 900 units of inventory shipped on consignment by Peete to another company. (b) 3,000 units of inventory in transit from a supplier shipped FOB destination. (c) 1,200 units of inventory sold but being held for customer pickup. (d) 500 units of inventory held on consignment from another company. We were unable to transcribe...
2. For each of the independent events listed below, analyze the impact on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item. (20%) Code: 0 = item is overstated U = item is understated NA = item is not affected Items Cost of Goods Sold Net Income Assets Equity Events 1. A physical count of goods on hand at the end of the current year resulted in...
Question 2 (3 points) A company that uses the perpetual inventory method purchases inventory of $2,000 on account FOB shipping point with terms of 2/10 net/30. Which of the following entries would be made to record full payment to the seller the payment is made within 10 days? OA) The accounting entry would be a $2,060 debit to Accounts Payable, a $40 debit to Inventory and a $2,100 credit to Cash. OB) The accounting entry would be a $1,100 debit...
P7-1 (Algo) Analyzing Items to Be Included in Inventory L07-1 Travis Company has just completed a physical inventory count at year-end, December 31 of the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to $67,000. During the audit, the independent CPA developed the following additional information: a. Goods costing $810 were being used by a customer on a trial basis and were...
Travis Company has just completed a physical Inventory count at year-end, December 31 or the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to 565,700. During the audit, the independent CPA developed the following additional Information: a. Goods costing $870 were being used by a customer on a trial basis and were excluded from the inventory count at December 31 of the...
Travis Company has just completed a physical Inventory count at year-end, December 31 of the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to $65,700. During the audit, the independent CPA developed the following additional Information a Goods costing $870 were being used by a customer on a trial basis and were excluded from the inventory count at December 31 of the...
E7-1 LO7-1 Analyzing Items to Be Included in Inventory Based on its physical count of inventory in its warehouse at yearend, December 31 of the current year, Plummer Company planned to report inventory of $34,000. During the audit, the independent CPA devel oped the following additional information: a. Goods from a supplier costing $700 are in transit with UPS on December 31 of the current year. The terms are FOB shipping point (explained in the Required" section). Because these goods...
Most questions answered within 3 hours.
-
On January 1, 2019, ABC Company issued $60,000,000 of 20-year,
10.5% bonds when the market rate...
asked 24 seconds from now -
39.4% of US homes continue to use a landline in addition to cell
phone service. 3...
asked 38 minutes ago -
Starting with benzene, synthesize 1-phenyl-1-butyne.
Show intermediates and reagents.
asked 1 hour ago -
Create a 32-run crossed array design with six control factors
and two noise factors such that...
asked 2 hours ago -
A 500g sample of sand from source A has the following amounts
retained on each sieve....
asked 2 hours ago -
In
your own words, please explain the essay by John Keynes wrote "The
End of Laissez...
asked 2 hours ago -
How are the matrix and pixels related? Why are smaller
pixels better for diagnostic quality?
asked 2 hours ago -
2. An AC generator has 80 rectangular loops on
its armature. Each loop is 11 cm...
asked 2 hours ago -
Please help me with this question. Consider Aldi’s current and
potential geographic markets (see Exhibit 4...
asked 2 hours ago -
What are the main components of the fermentation process and
give an explanation of each? Include...
asked 2 hours ago -
Explain which types of cells in the body (belonging to which
organs, etc.) are sensitive to...
asked 3 hours ago -
A single cable supports an 703-kg elevator car. What is the
tension in the cable when...
asked 3 hours ago