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    ACCT 211 Week 3 Chapter 5 Problem | Accounting Assignment Help | Liberty University

    ACCT 211 Week 3 Chapter 5 Problem | Accounting Assignment Help |  Liberty University 

    Chapter 5 Problems

     

    Ø Question 1

    [The following information applies to the questions displayed below.]

    Warner woods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
     

     

    Date

    Activities

    Units Acquired at Cost

    Units Sold at Retail

     

    Mar.

    1

     

    Beginning inventory

     

    140

    units

    @ $51.80 per unit

     

     

     

     

     

    Mar.

    5

     

    Purchase

     

    245

    units

    @ $56.80 per unit

     

     

     

     

     

    Mar.

    9

     

    Sales

     

     

     

     

     

    300

    units

    @ $86.80 per unit

     

    Mar.

    18

     

    Purchase

     

    105

    units

    @ $61.80 per unit

     

     

     

     

     

    Mar.

    25

     

    Purchase

     

    190

    units

    @ $63.80 per unit

     

     

     

     

     

    Mar.

    29

     

    Sales

     

     

     

     

     

    170

    units

    @ $96.80 per unit

     

     

     

     

    Totals

     

    680

    units

     

     

    470

    units

     


     

     

    Required:
    1. Compute cost of goods available for sale and the number of units available for sale.

     

    Ø Question 2

     

    Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
     

     

    Date

    Activities

    Units Acquired at Cost

    Units Sold at Retail

     

    Mar.

    1

     

    Beginning inventory

     

    140

    units

    @ $51.80 per unit

     

     

     

     

     

    Mar.

    5

     

    Purchase

     

    245

    units

    @ $56.80 per unit

     

     

     

     

     

    Mar.

    9

     

    Sales

     

     

     

     

     

    300

    units

    @ $86.80 per unit

     

    Mar.

    18

     

    Purchase

     

    105

    units

    @ $61.80 per unit

     

     

     

     

     

    Mar.

    25

     

    Purchase

     

    190

    units

    @ $63.80 per unit

     

     

     

     

     

    Mar.

    29

     

    Sales

     

     

     

     

     

    170

    units

    @ $96.80 per unit

     

     

     

     

    Totals

     

    680

    units

     

     

    470

    units

     


    2. Compute the number of units in ending inventory.

     

    Ø Question 3

     

    Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
     

     

    Date

    Activities

    Units Acquired at Cost

    Units Sold at Retail

     

    Mar.

    1

     

    Beginning inventory

     

    140

    units

    @ $51.80 per unit

     

     

     

     

     

    Mar.

    5

     

    Purchase

     

    245

    units

    @ $56.80 per unit

     

     

     

     

     

    Mar.

    9

     

    Sales

     

     

     

     

     

    300

    units

    @ $86.80 per unit

     

    Mar.

    18

     

    Purchase

     

    105

    units

    @ $61.80 per unit

     

     

     

     

     

    Mar.

    25

     

    Purchase

     

    190

    units

    @ $63.80 per unit

     

     

     

     

     

    Mar.

    29

     

    Sales

     

     

     

     

     

    170

    units

    @ $96.80 per unit

     

     

     

     

    Totals

     

    680

    units

     

     

    470

    units

     


     

    3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 85 units from beginning inventory and 215 units from the March 5 purchase; the March 29 sale consisted of 65 units from the March 18 purchase and 105 units from the March 25 purchase.
     

    Ø Question 4

     

    Warner woods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
     

     

    Date

    Activities

    Units Acquired at Cost

    Units Sold at Retail

     

    Mar.

    1

     

    Beginning inventory

     

    140

    units

    @ $51.80 per unit

     

     

     

     

     

    Mar.

    5

     

    Purchase

     

    245

    units

    @ $56.80 per unit

     

     

     

     

     

    Mar.

    9

     

    Sales

     

     

     

     

     

    300

    units

    @ $86.80 per unit

     

    Mar.

    18

     

    Purchase

     

    105

    units

    @ $61.80 per unit

     

     

     

     

     

    Mar.

    25

     

    Purchase

     

    190

    units

    @ $63.80 per unit

     

     

     

     

     

    Mar.

    29

     

    Sales

     

     

     

     

     

    170

    units

    @ $96.80 per unit

     

     

     

     

    Totals

     

    680

    units

     

     

    470

    units

     


     

    4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 85 units from beginning inventory and 215 units from the March 5 purchase; the March 29 sale consisted of 65 units from the March 18 purchase and 105 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

     

    Ø Question 5

     

    Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions
     

     

    Date

    Activities

    Units Acquired at Cost

    Units Sold at Retail

     

    Jan.

    1

     

    Beginning inventory

     

    620

    units

    @ $45 per unit

     

     

     

     

     

    Feb.

    10

     

    Purchase

     

    310

    units

    @ $42 per unit

     

     

     

     

     

    Mar.

    13

     

    Purchase

     

    120

    units

    @ $30 per unit

     

     

     

     

     

    Mar.

    15

     

    Sales

     

     

     

     

     

    770

    units

    @ $85 per unit

     

    Aug.

    21

     

    Purchase

     

    190

    units

    @ $50 per unit

     

     

     

     

     

    Sept.

    5

     

    Purchase

     

    520

    units

    @ $48 per unit

     

     

     

     

     

    Sept.

    10

     

    Sales

     

     

     

     

     

    710

    units

    @ $85 per unit

     

     

     

     

    Totals

     

    1,760

    units

     

     

    1,480

    units

     


        
    Required:
    1.
    Compute cost of goods available for sale and the number of units available for sale.

    2. Compute the number of units in ending inventory.

    3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 620 units from beginning inventory, 210 from the February 10 purchase, 120 from the March 13 purchase, 140 from the August 21 purchase, and 390 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.)

    4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)

     

    Ø Question 6

     

    A physical inventory of Liverpool Company taken at December 31 reveals the following.   
      

     

     

    Per Unit

    Item

    Units

    Cost

    Market

    Car audio equipment

     

     

     

     

     

     

     

    Speakers

    355

    $

    110

     

    $

    118

     

    Stereos

    270

     

    131

     

     

    121

     

    Amplifiers

    336

     

    106

     

     

    115

     

    Subwoofers

    214

     

    72

     

     

    62

     

    Security equipment

     

     

     

     

     

     

     

    Alarms

    490

     

    170

     

     

    160

     

    Locks

    301

     

    113

     

     

    103

     

    Cameras

    222

     

    332

     

     

    342

     

    Binocular equipment

     

     

     

     

     

     

     

    Tripods

    195

     

    94

     

     

    104

     

    Stabilizers

    180

     

    115

     

     

    125

     


     
    Required:
    1.
    Calculate the lower of cost or market for the inventory applied separately to each item.
    2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

    Complete this questions by entering your answers in the tabs below.

     

    Required 1

     

    Calculate the lower of cost or market for the inventory applied separately to each item.

    Required 2

    If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

    Ø Question7

     

    Navajo Company’s financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Inventory on December 31, 2016, is understated by $61,000, and inventory on December 31, 2017, is overstated by $31,000.
     

    For Year Ended December 31

    2016

    2017

    2018

    (a)

    Cost of goods sold

    $

    736,000

    $

    966,000

    $

    801,000

    (b)

    Net income

     

    279,000

     

    286,000

     

    261,000

    (c)

    Total current assets

     

    1,258,000

     

    1,371,000

     

    1,241,000

    (d)

    Total equity

     

    1,398,000

     

    1,591,000

     

    1,256,000


       
    Required:
    1. For each key financial statement figure—(a), (b), (c), and (d) below—prepare a table to show the adjustments necessary to correct the reported amounts.
    2. What is the error in total net income for the combined three-year period resulting from the inventory errors?

     

     

     

    Complete this questions by entering your answers in the tabs below.

     

    Required 1

     

    For each key financial statement figure—(a), (b), (c), and (d) below—prepare a table to show the adjustments necessary to correct the reported amounts. (Amounts to be deducted must be entered with a minus sign.)

     

     

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