ACC111 Unit 6 Homework Assignment
E7-2 Determining the Correct Inventory Balance [LO 7-1, LO 7-2, LO 7-4]
Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory of $78,000 and Cost of Goods Sold of $436,000.
- Included in Inventory (and Accounts Payable) are $11,600 of lenses SLC is holding on consignment.
- Included in SLC’s Inventory balance are $5,800 of office supplies held in SLC’s warehouse.
- Excluded from SLC’s Inventory balance are $8,800 of lenses in the warehouse, ready to send to customers on January 2. SLC reported these lenses as sold on December 31, at a price of $16,600.
- Included in SLC’s Inventory balance are $3,400 of lenses that were damaged in December and will be scrapped in January, with zero realizable value.
Required:
Prepare the table showing the balances presently reported for Inventory and Cost of Goods Sold, and then displaying the adjustment(s) needed to correctly account for each of items (a)-(d), and finally determining the appropriate Inventory and Cost of Goods Sold balances. (Enter any decreases to account balances with a minus sign.)
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E7-3 Recording Journal Entries to Correct Inventory Misreporting [LO 7-1, LO 7-2, LO 7-4]
Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory of $72,000 and Cost of Goods Sold of $424,000.
- Included in Inventory (and Accounts Payable) are $10,400 of lenses SLC is holding on consignment.
- Included in SLC’s Inventory balance are $5,200 of office supplies held in SLC’s warehouse.
- Excluded from SLC’s Inventory balance are $8,200 of lenses in the warehouse, ready to send to customers on January 2. SLC reported these lenses as sold on December 31, at a price of $15,400.
- Included in SLC’s Inventory balance are $3,100 of lenses that were damaged in December and will be scrapped in January, with zero realizable value.
Required:
For each item, (a)-(d), prepare the journal entry to correct the balances presently reported. (If no entry is required for a transaction/event, select “No Journal Entry Required” in the first account field.)
E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3]
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 300 units.
| Date | Units | Unit Cost | Total Cost | |||||||
| Beginning Inventory | January 1 | 220 | $ | 80 | $ | 17,600 | ||||
| Purchase | January 15 | 310 | 90 | 27,900 | ||||||
| Purchase | January 24 | 270 | 110 | 29,700 | ||||||
Required:
- Calculate the number and cost of goods available for sale.
- Calculate the number of units in ending inventory.
- Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.
Course: ACC111 Financial Accounting
School: Post University
- : 06/10/2019
- : 100
