Answer:
$29,500
Explanation:
Given that,
Beginning inventory = $12,000
Ending inventory = $6,000
Purchases = $25,000
Purchase return = $1,500
Kuyu’s cost of goods sold during the period:
= Beginning inventory + Net purchases - Ending inventory
= Beginning inventory + (Purchases - Purchase return) - Ending inventory
= $12,000 + ($25,000 - $1,500) - $6,000
= $12,000 + 23,500 - $6,000
= $29,500
Answer:
The journal entries are as follows:
(i) On December 31, 2017
Unrealized gain or loss income A/c Dr. $10,800
To estimated purchase commitment liability $10,800
(To record other income and expenses)
Workings:
Unrealized gain or loss income = 36,000 × ($3 - $2.7)
= 36,000 × $0.3
= $10,800
(ii) On January 1, 2018
Raw material A/c (36,000 × $2.7) Dr. $97,200
Estimated purchase commitment liability A/c Dr. $10,800
To accounts payable $108,000
(To record the materials received in January 2018)
Answer:
D. $490,000
Explanation:
The inventory was valued at first-in, first-out (FIFO) costs and totaled $500,000.
<em>Adjustments:</em>
The goods worth $10,000 (1,000 units x $10 cost) were shipped and billed to a customer meaning that company has already recorded the sales in its income statement therefore they became the property of the customer and should not have been included in the inventory count. The $10,000 should be removed from the inventory recorded bringing the inventory balance at $490,000 ($500,000 - $10,000).
The goods worth $30,000 (6,000 units x $5 cost) will not be included in the total inventory count because the inventory is held on consignment for one of the company's supplier and the ownership of the goods belongs to the consignor (in this case, the supplier) until they are sold. The goods appear in the inventory records of the consignor (in this case, supplier) not the consignee (in this case, the company). In this case, the company has not included the goods in its inventory cost therefore no adjustment is necessary.
Answer:
$48.50
Explanation:
Relevant costs are the costs that are influenced by managerial decisions.They are future costs that have the tendency to affect the cash flow or outflow above the current level , that are relevant in making decisions . Examples are opportunity cost , incremental cost
The relevant cost in the scenario is the cost of buying from the supplier instead of in-house manufacturing , which is $48.50
