44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) Questions Complex Moderate How many questions that you did answer? List the question that you are not able to answer Simple _24 /24 Brief Exercises Complex Moderate How many brief exercises that you did answer? List the brief exercises that you are not able to answer Simple 13_/13 Exercises Complex Moderate How many exercises that you did answer? List the exercises that you are not able to answer Simple _12 /13 E6-3 Problems & Critical Thinking Complex Moderate How many _5 /6 © 2020 by Dr Nguyen Huu Cuong Simple “Liberal Arts - Self-initiative - Pragmatism” problems that you did answer? List the problems that you are not able to answer P6-7A Student Information Full Name Ngô Thị Lan Dung Class 44k06.1 Phone 0372532471 Email Landungngo.2000@gmail.com Self-evaluation (Out of ten) © 2020 by Dr Nguyen Huu Cuong 9.3/10 “Khai phóng - Tự thân - Hữu ích” 44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) QUESTIONS Financial Accounting: Tools for Decision-Making, 7th Canadian Edition (Kimmel P.D et al., 2017): Chapter "Reporting and Analyzing Inventory" Q2: Aconsignmentalwayshasaconsignorandaconsigneeinthedocumentwrittenoutbythe carrierorthetransporter Theconsignoristhesenderofaconsignmentwhiletheconsigneeisthereceiverofthe consignment Q3: Janine’sDecember31inventorydecreased Fastrak’sDecember31inventoryincreased(inscreasinggoodsintransit) ThejournalentryinthebooksofJannie.LtdwillbeAccountsreceivabledebitandSalescredit. ThejournalentryinthebooksofFastrakCorporationwillbePurchasedebit,Freightdebitand AccountsPayableandCashcredit Q4: a)No.It'saconsignment b)Yes.ThegoodsareintransitbutalreadybelongtoKingsway c)Yes.GoodssoldandfinishedgoodsareininventoryofKingsway Q5: Producersneedtocalculatecoststopredictfuturebusinessexpensesandevaluatetheirown performance Producersneedtocalculatecoststopredictfuturebusinessexpensesandevaluatetheirown performance Q6: Specific identification isusedtotrackandcostspecificandidentifiableinventoryitemsthatare eitherinoroutofstockonanindividualbasis.Thisisdonewithitemsacompanyhasidentified viaRFIDtag,stampedreceiptdate,orserialnumber. FIFO isanacronymforfirst-in,first-outandmeansthattheoldestinventoryitemsarerecorded © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” assoldfirst.Essentially,FIFOassumesthatinventoryitemsaresoldintheorderinwhichthey areacquired:inventoryitemsboughtfirstarethefirstonestobesold,andinventoryitems boughtlateraresoldlater.Thus,thecostofinventoryreflectedtothebalancesheetrepresents thecostofinventorythatwaspurchasedmostrecently LIFO isanacronymforlast-in,firstoutandassumesthatthemostrecentinventoryitems purchasedarethefirstonestobesold,andinventoryitemspurchasedfirstaresoldlast. Q7: a) Specificidentification b)FIFO c)LIFO Q8: Becausewhenabusinesspurchasesitemsofinventory,theymaypaydifferentpricesdueto diversityinthetypesofinventorystockorthesamestockitems,purchasedatdifferenttimes Intheweightedaveragecostmethod,thecostofgoodsavailableforsaleisdividedbythe numberofunitsavailableforsaleandiscommonlyusedwheninventoryitemsaresomeldedor identicaltoeachotherthatitisimpossibletoassignspecificcoststosingleunits Q9: 1.Restaurants,grocersandotherbusinessesworkingwithperishableswillobviouslywanttouse FIFO.Thefirstproductsinreallyarethefirstproductsoutinthatsituation,andtakinginventory likethatwillhelpcompanykeeparealisticviewofinventorycosts 2.LIFOwillreportthelowestincome,whilespecificidentificationandtheweightedaverage methodbothfallinbetween 3.FIFOorthespecificidentificationmethodskeepprecisetrackofhistoricalcostscompared withrevenue 4.LIFOcancomparerevenuewiththecurrentcostsofgoods Q10: FIFOisthemostprecisemethodandreportsthehighestincome Q11: (a)cash(pre-tax):theFIFOishigherthanaverageinventorycost (b)endinginventory:theFIFOislowerthanaverageinventorycost (c)costofgoodssold:theFIFOishigherthanaverageinventorycost (d)netincome:theFIFOishigherthanaverageinventorycost (e)retainedearnings:theFIFOislowerthanaverageinventorycost Q13: © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 44K06 a) b) c) d) e) f) Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) Understated Understated Overstated Understated Overstated Understated Q14: Tooearly Inventory:Overstated Netincome:Unaffected AccountsPayable:Overstated RetainedEarning:Unaffected Q15: Costandnetrealizablevalueistheestimatedsellingpriceinthenormalcourseofbusiness,less reasonablypredictablecostsofcompletion,disposal,andtransportation.Obviously,these measurementscanbesomewhatsubjective,andmayrequiretheexerciseofjudgmentintheir determination.ItisalsoimportanttonotethatacompanyusingLIFOortheretailwouldnotuse thelower-of-cost-or-NRVmethod,butwouldinsteadvalueinventoryatlowerofcost Q19: Theperiodicsystemreliesuponanoccasionalphysicalcountoftheinventorytodetermine theendinginventorybalanceandthecostofgoodsold,whiletheperpetualsystemkeeps continualtrackofinventorybalances.Theperpetualusesbookrecordswhileperiodicuses physicalverification.Abouttheupdation,periodicupdatesattheendofaccountingperiod andtheperpetualupdatescontinuously Chapter "Reporting and Analysing Receivables" Q3: Ishouldthinkaboutthepriceofmyproduction,thecost,thekindofmybusiness,isita companyorjustasmallshop Q4: Beacausecompaniesthatuseaperpetualsystemmaystillconductanannualphysicalinventory. Intheperiodicinventorysystem,physicalcountsareusedtodeterminetheamountofgoods © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” sold.Intheperpetualsystem,ayear-endphysicalinventoryvalidatestheinventoryrecords Q5: Theperiodicinventorysystemusesanoccasionalphysicalcounttomeasurethelevelof inventoryandthecostofgoodssold Theperpetualsystemkeepstrackofinventorybalancescontinuously,withupdatesmade automaticallywheneveraproductisreceivedorsold Q6: Becausepurchasesofmerchandiseforresalearenotconsideredend-usergoodsatthetimeof purchasebytheretailerbecausearestillinthedistributionphase.Thisisanimportantdistinction becauseanysalestaxpaidbytheretailerforthesegoodsisconsideredacostofdoingbusiness andcanqualifyasataxreduction Q7: Thecostofmissingthispurchasediscount=1%*48000=480$ Q8: LebelshouldrecordthecostofgoodsoldinJune,andrecordthesaleasrevenueinJuly ThecustomershouldrecordthepurchaseosinventoryinJune Q9: Quantitydiscountisanincentiveofferedtobuyersthatresultsinadecreasedcostperunitof goodsormaterialswhenpurchasedingreaternumbers SalesDiscount:Asalesdiscountreferstoreductioninthepriceofanitemorproductthata customerbuysfromaretailer PurchaseDiscounts:Purchasediscountsarethereductionsthatretailersandstoresgetfromtheir wholesalers.Itofferedtostorescandependonvarietyoffactorssuchassizeoforder,acutin pricesofrawmaterial,etc Q10: BecausepurchasereturnscanbeincreasedtheInventoryandAccountsPayableaccountswhen thegoodswereoriginallypurchased,itwilldecreasetheseaccountswhengoodsarereturned,or whenitisgrantedanallowance Q11: Apurchasediscountisareductioninpricethatasupplierorwholesalerofferstoaretaileror store Asalesdiscountisareductioninpricethecustomerreceiveswhenhebuysaproductfroma retailerorstore Aquantitydiscountisanincentiveofferedtoabuyerthatresultsinadecreasedcostperunitof © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) goodsormaterialswhenpurchasedingreaternumbers Q13: BecausepurchasereturnscanbeincreasedtheInventoryandAccountsPayableaccountswhen thegoodswereoriginallypurchased,itwilldecreasetheseaccountswhengoodsarereturned,or whenitisgrantedanallowance © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” BRIEF EXERCISES Financial Accounting: Tools for Decision-Making, 7th Canadian Edition (Kimmel P.D et al., 2017) Chapter "Reporting and Analyzing Inventory" BE6-1: (a)GoodsshippedonconsignmentbyHelgesontoanothercompanybeincludedinthe inventory (b)GoodsheldonconsignmentbyHelgesonfromanothercompanynotbeincludedinthe inventory (c)Goodsintransittoacustomer,shippedFOBdestinationbeincludedintheinventory (d)GoodsintransittoHelgesonfromasuppliershippedFOBshippingpointbeincludedin theinventory (e)Goodsintransittoacustomer,shippedFOBshippingpointnotbeincludedintheinventory (f)GoodsintransittoHelgesonfromasupplier,shippedFOBdestinationnotbeincludedin theinventory BE6-2: Thecorrectcostoftheinventoryonaugust31=InventoryCountonaugust31-inventoryheld onconsignmentforalocaldesigner-inventorythathadbeensoldtocustomersbutwasbeing heldforalterations+ThesecondshipmentcostplusfreightchargestermsFOBshippingpoint shippedonaugust28 Thecorrectcostoftheinventoryonaugust31=95000-500-1000+(4750+250) Thecorrectcostoftheinventoryonaugust31=98500 BE6-3: Cost Of Goods Available for Sale 3electricpianos$600 $1,800 2electricpianos$475 $950 $2,750 Costofgoodssold=$600+$475=$1,075 Endinginventory=2x$600+$475=$1,675 BE6-4: Purchases date units cost Cost of goods sold total units cost Apr.1 © 2020 by Dr Nguyen Huu Cuong total Balance units 15 cost $18 “Khai phóng - Tự thân - Hữu ích” total $270 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) 44K06 30 $15 $450 14 12 $12 15 $18 10 $15 $144 15 $18 30 $15 $720 20 $15 $300 20 $15 12 $12 $444 BE6-5: Purchases date units cost Cost of goods sold total units cost total Apr.1 30 $200 $6,000 25 14 12 $205 $194 $4,850 $2,460 Balance units cost total 15 $180 $2,700 45 $194 $8,730 20 $194 $3,880 32 $198 $6,336 BE6-6: (a) FIFO Purchases units cost Cost of goods sold total units cost total Ending inventory units cost Purchase s 250 $70 $17,500 250 $70 Purchase 500 $100 $50,000 250 $70 © 2020 by Dr Nguyen Huu Cuong total $17,500 “Liberal Arts - Self-initiative - Pragmatism” s Sales Purchase s 900 $120 250 $70 50 $100 $22,50 $108,00 Sales 325 $100 $32,50 500 $100 $67,500 450 $100 $45,000 450 $100 900 $120 125 $100 900 $120 $153,00 $120,50 Costofgoodssold=$22,500+$32,500=$55,000 Endinginventory=$120,500 (b))averagecost Purchases units cost Cost of goods sold total units cost total Ending inventory units cost total Purchase s 250 $70 $17,500 250 $70 $17,500 Purchase s 500 $100 $50,000 750 $90 $67,500 450 $90 $40,500 1350 $110 $148,50 1025 $110 $112,750 Sales Purchase s 300 900 $120 Sales $90 $27,00 $108,00 325 $110 $35,75 Costofgoodssold=$27,000+$35,750=$62,750 © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 10 Costofgoodssold2017=202,000 Grossprofit=250,000–202,000=48,000 E6-10: (a) Cameras: Sony4x$160=$640 Canon8x$150=$1,200 LightMeters: Gossen12x$135=$1,620 Sekonic10x$110=$1,100 Total = $4,560 (b) Debitcostofgoodssold$4,560 Creditinventory$4,560 E6-13: (a)costofgoodsavailableforsale=beginninginventory+costofgoodspurchases =40,000+(105,000+82,000+83,200)=310,200 (b)FIFO Purchases units cost total Beginnin g Purchases Purchases 5,000 4,000 $21 $20.5 $105,00 $82,000 Sales Purchases Cost of goods sold units cost total 2,000 3,000 4,000 $20.8 © 2020 by Dr Nguyen Huu Cuong $20 $21 $83,200 $103,00 Ending inventory units cost total 2,000 $20 $40,000 2,000 $20 5,000 $21 2,000 5,000 4,000 $20 $21 $20.5 2,000 4,000 $21 $20.5 2,000 $21 “Khai phóng - Tự thân - Hữu ích” 20 $145,00 $227,00 $124,00 44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) Sales 2,000 4,000 $21 $20.5 $124,00 4,000 4,000 $20.5 $20.8 4,000 $20.8 $207,20 $83,200 Costofgoodssold=$103,000+$124,000=$227,000 Endinginventory=$83,200 Average Purchases units cost total Beginnin g Purchases 5,000 Purchases 4,000 $20.5 $21 $105,00 $82,000 Sales Purchases Cost of goods sold units cost total 5,000 4,000 $20.8 Sales $20.6 $103,00 $83,200 6,000 $20.6 $124,08 Ending inventory units cost total 2,000 $20 $40,000 7,000 $20.7 11,000 $20.6 6,000 $20.6 10,00 4,000 $20.6 $20.6 Costofgoodssold=$103,000+$124,500=$227,080 Endinginventory=$82,720 (c)grossprofit=revenue–costofgoodsold Revenue=40x(5000+6000)=440,000 FIFO:grossprofit=440,000-227,000=213,000 Average:grossprofit=440,000-227,080=212,92 FIFOcostwouldresultinthehighergrossprofitthanaveragecost © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” 21 $144,90 $226,60 $123,60 $206,80 $82,720 E6-14: (a)FIFO units Beginnin g Purchases Purchases Purchases 2,300 4,500 1,500 Purchases cost total $6 $7 $8 Cost of goods sold units cost total $13,800 $31,500 $12,000 Sales 1,500 2,300 4,400 $5 $6 $7 $52,100 Ending inventory units cost total 1,500 $5 $7,500 1,500 2,300 1,500 2,300 4,500 1,500 2,300 4,500 1,500 $5 $6 $5 $6 $7 $5 $6 $7 $8 100 1,500 $7 $8 $21,300 $52,800 $64,800 $12,700 endinginventory=$12,700 costofgoodssold=$52,100 Average Purchases units cost total Beginnin g Purchases Purchases Purchases Sales 2,300 4,500 1,500 $6 $7 $8 Cost of goods sold units cost total $13,800 $31,500 $12,000 8,200 $6.6 $54,120 Ending inventory units cost total 1,500 $5 $7,500 3,800 8,300 9,800 1,600 $5.6 $6.4 $6.6 $6.6 $21,280 $53,120 $64,680 $10,560 endinginventory=$10,560 costofgoodssold=$54,120 (b)becauseaverageunitcost==6,6 (c) Costofgoodssold(COGS)=Beginninginventory+Purchases–Closinginventory =7,500+57,300-12,700=52,100 Chapter "Reporting and Analysing Receivables" E5-4: © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 22 44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) (a) Debitinventory28,000 Creditaccountpayable28,000 Debitinventory700 Creditcash700 Debitsupplies5,000 Creditaccountpayable5,000 Debitaccountpayable3,500 Creditinventory3,500 Debitaccountpayable24,500 Creditcash24,500 (b) Debitaccountpayable24,500 Creditcash24500x(100%-1%)=24,255 Creditinventory1%x24,500=245 Intermediate Financial Accounting - Volume (Version 2019 - Revision A) by (Glenn Arnold & Suzanne Kyle) Chapter "Inventory" 7-1 Salariesofassemblylineworkers Rawmaterials Salaryoffactoryforeman Heatingcostforthefactory Miscellaneoussuppliesusedinproductionprocess Coststoshiprawmaterialsfromthesuppliertothefactory Electricitycostforthefactory Depreciationoffactorymachines Propertytaxesonfactorybuilding Discountsforearlypaymentofrawmaterialpurchases © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” 23 Salariesofthefactory’sjanitorialstaff 7-2 FOB Shipping Ownsthegoodswhileintransit FOB Destination P S Isresponsibleforthelossifgoodsare damagedintransit P S Paysfortheshippingcosts P S 7-3 a.totalfixedoverhead=150.000=1.42 per unit b.usingthestandardrateof$1.50perunit c.=0.94perunit 7-4 units Beginnin g Purchases Purchases 50 10 Purchases cost total 560 575 28,000 5,750 Sales Purchases Cost of goods sold units cost total 12 572 Sales 550 560 8,320 6,864 23 560 12,880 Ending inventory units cost total 550 4,400 50 50 10 43 10 43 10 12 20 10 12 550 560 550 560 575 560 575 560 575 572 560 575 572 Costofgoodssold=21,200 Balanceinventory=23,814 7-5 © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 24 32,400 38,150 29,830 36,694 23,814 44K06 units Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) Purchases cost total Cost of goods sold units cost total Ending inventory units cost total 550 4,400 Beginnin g Purchases 50 560 28,000 58 Purchases 10 575 5,750 68 Sales Purchases 15 12 572 561.0 8,415.45 6,864 Sales 53 65 23 563,0 12,950.3 42 558.6 561.0 561.0 563,0 563,0 Costofgoodssold=21,365.83 Balanceinventory=23,648.52 7-6 a Thelowerofcostandnetrealizablevalue Brakepad#1140 Brakepad#2175 Total315 Softtire325 Hardtire303 Total628 total=943 currentvalue=971 adjustment=943-971=-28 Debitaccount22928 Creditaccount15228 b Thelowerofcostandnetrealizablevalue Total320 Total637 © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” 25 32,399.9 38,150.0 29,734.5 36,598.9 23,648.5 total=957 currentvalue=971 adjustment=943-971=-14 Debitaccount22914 Creditaccount15214 7-7 Item A B C D Total Inventory A/R A/P -82,000 NetIncome -82,000 -4,000 -6,000 -27,000 2,000 -27,000 -2,000 3,500 -115,000 3,500 1,500 -6,000 -105,500 7-8 Debitaccount15282,000 Creditaccount63282,000 Debitaccount1524,000 Debitaccount6322,000 Creditaccount3316,000 Debitaccount15227,000 Creditaccount63227,000 Debitaccount1522,000 Creditaccount6322,000 Debitaccount22943,500 Creditaccount1313,500 7-9 thecostofinventorydamaged=beginninginventory+purchases-estimatedcostofsales– undamagedgoods =275,000+(650,000–16,000)–(955,000-35%x955,000)–(90,000x(100%-35%)) © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 26 44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) =229,750 Introduction to Financial Accounting (Version 2019 - Revision B) by (Henry Dauderis & David Annand) Chapter "Assigning Costs to Merchandise" 6-3 units Beginnin g Sales Purchases Purchases Sales Purchases Purchases cost total 1000 500 2.00 1.00 2000 500 1000 2.50 2500 Cost of goods sold units cost total Ending inventory units cost total 2000 0.50 1000 1200 0.50 600 2000 1.26 2520 800 1800 2300 300 1300 0.50 1.33 1.26 1.26 2.21 400 2394 2898 378 2873 a. debitaccounts1316,000 creditaccount5116,000 debitaccount632600 creditaccount152600 b debitaccounts13112,000 creditaccount51112,000 debitaccount6322,520 creditaccount1522,520 6-5 a i.Endinginventoryfor2021wasunderstatedby$2,000sothatcostofgoodssoldisunderstated andgrossprofitisoverstated$12,000 Becauseofthismistake,the2022openinginventorywasalsounderstatedby$2,000,causing costofgoodssoldtobeunderstatedandgrossprofitoverstatedby$2,000 © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” 27 Thereisnoimpacton2023asaresultoftheerror ii.The2023endinginventorywasoverstatedby$5,000sothatcostofgoodssoldisoverstated andgrossprofitisunderstated Thiserrordoesnotimpact2021or2022 b For2021,themerchandiseinventoryonthebalancesheetwasunderstatedby$2,000so thetotalassetswere$2,000lessthantheyshouldhavebeen For2022,thereisnoeffectonthebalancesheet For2023,theendinginventoryinthebalancesheetisoverstatedby$5,000sototalassetswere overstatedby$5,000 6-6 a LCNRVonaunit-by-unitbasis:(2× $50)+(3× $75)+(4× $20)=$405 b LCNRVonagroupinventorybasis: Totalcostofthegroup:(2× $50)+(3× $150)+(4×$25)=$650 TotalNRVofthegroup:(2× $60)+(3× $75)+(4× $20)=$425 425 6-7 a GrossProfit=35%ofSales =35%× $300,000 =$105,000 CostofGoodsSold=Sales− GrossProfit =$300,000− 105,000 =$195,000 thecostofinventorydamaged=beginninginventory+purchases-estimatedcostofsales= $80,000+$150,000-$195,000=$35,000 b.Baltonlostabout$35,000ofinventoryinthefireandisclaiming$45,000 © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 28 44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) PROBLEMS Financial Accounting: Tools for Decision-Making, 7th Canadian Edition (Kimmel P.D et al., 2017) Chapter "Reporting and Analyzing Inventory" P6-6A: Purchases units cost total Beginnin g Purchases Sales Purchases Sales Purchases 110 120 20 90 70 60 Cost of goods sold units cost total 9900 130 86.88 11294.4 120 73.38 8805.6 8400 1200 Ending inventory units cost total 50 80 4000 160 30 150 30 50 86.88 86.88 73.38 73.38 68.03 (a) Debitinventory9900 Creditcash9900 Debitcash15600 Creditrevenue15600 Debitcostofgoodssold11294.4 Creditinventory11294.4 Debitinventory8400 Creditcash8400 Debitcash12000 Creditrevenue12000 Debitcostofgoodssold8805.6 Creditinventory8805.6 Debitinventory1200 Creditcash1200 (b)Endinginventory=3401.5 © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” 29 13900.8 2606.4 11007 2201.4 3401.5 (c)Netrealizablevalue=2500 Debitcostofgoodssold901.5 Creditinventory901.5 P6-6B: Purchases units cost total Beginnin g Purchases 100 130 13000 Sales Purchases 35 120 15 110 60 60 140 130 40 20 130 120 16200 4200 Sales Purchases Cost of goods sold units cost total 1650 7600 Ending inventory units cost total 60 140 8400 60 100 140 130 40 40 35 130 130 120 5200 15 15 15 120 120 110 1800 (a) Debitinventory13000 Creditcash13000 Debitcash24000 Creditrevenue24000 Debitcostofgoodssold16200 Creditinventory16200 Debitinventory4200 Creditcash4200 Debitcash9600 Creditrevenue9600 Debitcostofgoodssold7600 Creditinventory7600 Debitinventory16500 Creditcash16500 (b)Endinginventory=3450 (c)Netrealizablevalue=3240 © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 30 21400 9400 3450 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) 44K06 Debitcostofgoodssold3450-3240=210 Creditinventory210 P6-7A: 2018 2017 (a)Cash O N (b)Costofgoodssold O U (c)Netincome U O (d)Retainedearnings U N (e)Endinginventory U O (f)Grossprofitmargin(40%) (g)Inventoryturnover(10times) P6-16A: units Purchases cost total Cost of goods sold units cost total Beginnin g Purchases 500 42 21,000 Sales 450 Purchases 750 44 33,000 Sales 800 Purchases 600 46 27,600 (a) (1)perpetual Endinginventory=31,934 Costofgoodssold=52,664 (2)periodic Endinginventory=700x43.38=30,366 © 2020 by Dr Nguyen Huu Cuong 40 18,000 43.33 34,664 Ending inventory units cost total 100 30 3,000 600 150 900 100 700 40 40 43.33 43.33 45.62 “Liberal Arts - Self-initiative - Pragmatism” 31 24,000 6,000 38,997 4,333 31,934 Costofgoodssold=begininginventory+purchases–endinginventory=54,234 (b) Costofgoodssoldinperpetualsystemislowerthanitinperiodicsystem Endinginventoryinperpetualsystemishigherthanitinperiodicsystem Introduction to Financial Accounting (Version 2019 - Revision B) by (Henry Dauderis & David Annand) Chapter "Assigning Costs to Merchandise" 6-9 1.Endinginventorywasoverstatedby2000sothatcostofgoodssoldwasoverstatedby2,000 andgrossprofittobeunderstatedby2,000 2.2016totalandnetassetswereoverstatedby$2,000.2017totalassetsandnetassetswere correct © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 32 44K06 Financial Accounting – ACC2001 CHAPTER ASSIGNMENT (Chapter 3) CRITICAL THINKING Financial Accounting: Tools for Decision-Making, 7th Canadian Edition (Kimmel P.D et al., 2017) Chapter "Reporting and Analyzing Inventory" CT6-5: a)1/Grossprofit=revenue–costofgoodsold Mar.5:COGS=140x500+30x540=86200 Grossprofit=170x800–86200=49800 Mar.25:COGS=170x500+330x570=273100 Grossprofit=500x850–273100=194400 2/Grossprofit=revenue–costofgoodsold Mar.5:COGS=170x540=91800 Grossprofit=170x800–91800=44200 Mar.25:COGS=340x570+30x540+130x500=275000 Grossprofit=500x850–275000=150000 b) c)Priceperunit==$546.76 COGS=(170+500)x546.76=366392.2 Grossprofit=Revenue–Costofgoodsold =(170x800+500x850)–366392.2 =194670.8 d)ThecompanyshoulduseSpecificIdentificationbecausethesystemisdesignedto specificallyallowtoidentifythecostofanyinventoryitemwithancode Chapter "Reporting and Analysing Receivables" CT5-5 RitaPelzerisanewemployeeandisplacedinaresponsiblepositionandsheispressuredby supervisorstocontinueunethicalwork(notaccordingtorules)previouslydonebytheprevious supervisor(JamieCaterino).Rita'sworkshouldnotbeeligibleforcashdiscounts.SoRita experiencesadilemmabetweenfollowingJamie'swordsoropposingherwiththeriskthatshe mightloseherjob Cashdiscountsaredeductionsgivenforbuyinggoodsinbulk,usuallyexpressedasapercent. Thepricecalculatedatthebuyeristhepriceaccordingtothelist(listprice)minustherebate © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” 33 (tradediscount)calledthecontractprice(contractprice) Beneficiaries: RitaPelzer JamieCaterino ZazStoresLtd. Supplierofgoodsforsale Defectiveparties:Employeeswhospecificallydeliverbills © 2020 by Dr Nguyen Huu Cuong “Khai phóng - Tự thân - Hữu ích” 34 ... 40 40 43. 33 43. 33 45.62 “Liberal Arts - Self-initiative - Pragmatism” 31 24,000 6,000 38 ,997 4 ,33 3 31 , 934 Costofgoodssold=begininginventory+purchases–endinginventory=54, 234 (b)... Total 637 © 2020 by Dr Nguyen Huu Cuong “Liberal Arts - Self-initiative - Pragmatism” 25 32 ,39 9.9 38 ,150.0 29, 734 .5 36 ,598.9 23, 648.5 total=957 currentvalue=971 adjustment=9 4 3- 971=? ?-1 4... Creditaccount15214 7-7 Item A B C D Total Inventory A/R A/P -8 2,000 NetIncome -8 2,000 -4 ,000 -6 ,000 -2 7,000 2,000 -2 7,000 -2 ,000 3, 500 -1 15,000 3, 500 1,500 -6 ,000 -1 05,500 7-8 Debitaccount15282,000