pls help me 16.2Company Y had the following transactions in Year 2. The perpetual FIFO inventorysystem is used.1. Purchased on credit, 4000 units of inventory at $5 each.2. Sold 3000 units for $12 each on credit. Replacement cost at this time is $7 each.There were 1000 units in beginning inventory at $4 each, which represents bothcurrent and historical cost. The exit price of the 1000 units is $12 each. 3. At year-end, the building's current value is $150 000, The gross historical cost was$100 000. The building is 2 years old at vear-end and is depreciated 10 per cent peryear. The current value at the beginning of the current year was $125 000.4. At year-end, the value of the land is $50 000. The historical cost was $30 000 andthe current value was also $30 000 at the beginning of the year.5. At year-end, the market price of the debentures, which were issued by the companyat the beginning of the year, is $40 168. The debentures were sold at par for$44 000 at the rate of 8 per cent. The current rate of interest on 31 December is10 per cent and the average for the year was 9 per cent. The remaining life of thedebentures on 31 December is 6 years.6. Accounts receivable of $20 000 has an exit price at vear-end of $19 000. The otherreceivables were collected during the year.7. At year-end, the selling price of the inventory is increased to $14 each.8. On 31 December, operating expenses of $12 000 are paid, including interest of$3520.RequiredRecord the transactions as journal entries under the following methods:(a) conventional accounting (historical cost)(b) exit price accounting. Assume debentures are capital.

There are different accounting methods of available to record the inventory out of which the company…

Company Y had the following transactions in Year 2. The perpetual FIFO inventory system is used. 1. Purchased on credit, 4000 units of inventory at $5 each. 2. Sold 3000 units for $12 each on credit. Replacement cost at this time is $7 each. There were 1000 units in beginning inventory at $4 each, which represents both current and historical cost. The exit price of the 1000 units is $12 each.

Company Y had the following transactions in Year 2. The perpetual FIFO inventory system is used. 1. Purchased on credit, 4000 units of inventory at $5 each. 2. Sold 3000 units for $12 each on credit. Replacement cost at this time is $7 each. There were 1000 units in beginning inventory at $4 each, which represents both current and historical cost. The exit price of the 1000 units is $12 each.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 16E: Dollar-Value LIFO A company adopted the LIFO method when its inventory was 1,800. One year later its...

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25 PLEASE SOLVE!!
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