Serial Problem: Kate's Cards (Note: This is a continuation of the Serial Problem: Kate’s Cards from Chapters 1 through 5.) SP6. As expected, the holiday season was very busy for Kate and her greeting card company. In fact, most of her supplies were fully depleted by year-end, necessitating a restocking of inventory. Assume that Kate uses the periodic method of accounting for inventory and that her January beginning inventory was $0. The following transactions occurred for Kate’s Cards during January of the New Year: Purchases | Date | Units | Unit Cost | Total Cost | |---------|-------|--------------|------------| | Jan. 10 | 400 | $3.00 per unit | $1,200 | | Jan. 17 | 500 | $3.50 per unit | $1,750 | | Jan. 23 | 300 | $4.00 per unit | $1,200 | | Total | 1,200 | | $4,150 | Sales | Date | Units | |---------|-------| | Jan. 15 | 360 | | Jan. 21 | 420 | | Jan. 27 | 380 | | Total | 1,160 | Required Calculate the company’s cost of goods sold and value of ending inventory for the month of January using (1) FIFO, (2) LIFO, and (3) the weighted-average cost method. Round the cost per unit to 3 decimal places and round your final answers to the nearest dollar. If the net realizable value of Kate’s inventory is $4.00 per unit on January 31, what value should be reported for her ending inventory on the January 31 balance sheet under each of the three inventory costing methods?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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If the new realizable value of Kate's inventory is $4.00 per unit on January 31, what value should be reported for her ending inventory on the January 31st balance sheet under each of the three inventory costing methods ?

**Serial Problem: Kate's Cards**

(Note: This is a continuation of the Serial Problem: Kate’s Cards from Chapters 1 through 5.)

SP6.

As expected, the holiday season was very busy for Kate and her greeting card company. In fact, most of her supplies were fully depleted by year-end, necessitating a restocking of inventory. Assume that Kate uses the periodic method of accounting for inventory and that her January beginning inventory was $0. The following transactions occurred for Kate’s Cards during January of the New Year:

**Purchases**

| Date | Units | Unit Cost | Total Cost |
|---------|-------|--------------|------------|
| Jan. 10 | 400 | $3.00 per unit | $1,200 |
| Jan. 17 | 500 | $3.50 per unit | $1,750 |
| Jan. 23 | 300 | $4.00 per unit | $1,200 |
| **Total** | 1,200 | | **$4,150** |

**Sales**

| Date | Units |
|---------|-------|
| Jan. 15 | 360 |
| Jan. 21 | 420 |
| Jan. 27 | 380 |
| **Total** | 1,160 |

**Required**

Calculate the company’s cost of goods sold and value of ending inventory for the month of January using (1) FIFO, (2) LIFO, and (3) the weighted-average cost method. Round the cost per unit to 3 decimal places and round your final answers to the nearest dollar.

If the net realizable value of Kate’s inventory is $4.00 per unit on January 31, what value should be reported for her ending inventory on the January 31 balance sheet under each of the three inventory costing methods?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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