Harrison Company purchased two types of inventory in a lump- sum transaction for $60,000. The purchase included: ⚫ 4,000 units of Product A (normal selling price $15 per unit) . 8,000 units of Product B (normal selling price $5 per unit) If Harrison sells 2,000 units of Product A, what is the gross profit?

Harrison Company purchased two types of inventory in a lump- sum transaction for $60,000. The purchase included: ⚫ 4,000 units of Product A (normal selling price $15 per unit) . 8,000 units of Product B (normal selling price $5 per unit) If Harrison sells 2,000 units of Product A, what is the gross profit?

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

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

See similar textbooks

Similar questions

Hayao Co. purchases inventory from overseas and incurs the following costs: the cost of the merchandise is $50,000 with the credit terms of 2/10, n/30; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000. Hayao paid within the discount period and incurred additional costs of $1,200 for advertising, $5,000 for sales commissions and $500 for delivery of goods to the customers. Compute the cost that should be assigned to the inventory.
Right Company purchased merchandise for $4,000 and sold it for $6,000. Between the time the inventory was purchased and sold, it appreciated in value by $500. What is the gross profit to be reflected on the income statement when the inventory is sold? A $6,000 B $2,500 $2,000 $1,500
c. Sold goods for $5,670, on account, which includes 6.5% sales tax. The company employes a gross profit pricing model to yield 75%. Record the JE for the seller and the buyer. Assume the seller sold inventory and the buyer purchased goods which will be used as equipment d. A company sold goods for $756 which includes 7.3% sales tax. The goods are carried in inventory at a cost basis of $550. This was a cash sale. Record the JE for the seller.
An item of inventory was purchased by company X for £500. Company X expects to sell the inventory for£700 and has to date incurred conversion costs of £130. A further £60 is expected to be incurred. Salesstaff will receive a commission of 4% from the sale.Compute the value at which this inventory item will be measured in company X’s statement of financialposition.
McCallister's just purchased $15,000 worth of Inventory. The terms of the sale were 1/10, net 30. What is the implicit interest?
Zonker Inc. purchases 500 units of an item at an invoicecost of $30,000. What is the cost per unit? If the goods areshipped f.o.b. shipping point and the freight bill was$1,500, what is the cost per unit if Zonker Inc. pays thefreight charges? If these items were bought on 2/10, n/30terms and the invoice and the freight bill were paid withinthe 10-day period, what would be the cost per unit?
Riley Kilgo Inc. purchased inventory costing $100,000 and sold 80% of the goods for $240,000. All purchases and sales were on account. Kilgo later collected 20% of the accounts receivable. Journalize these transactions for Kilgo, which uses the perpetual inventory system. For these transactions, show what Kilgo will report for inventory, revenues, and expenses on its financial statements. Report gross profit on the appropriate statement.
The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Product A B C D E Cost $ 59 99 59 119 39 Product Selling costs consist of a sales commission equal to 15% of selling price and shipping costs equal to 5% of cost. The normal profit is 25% of selling price. A B с D E Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Note: Do not round intermediate calculations. Round final answers to 2 decimal places. Per Unit Replacement Cost $ 54 89 74 89 47 $ Cost Replacement cost Selling Price $ 79 119 99 149 49 59 $ 99 59 119 39 54 89 74 89 47 NRV NRV minus NP Market Per Unit Inventory Value
The ABC merchandise Company has the following transactions: May 01: The Company purchased 5 units of inventory on account at a cost of $500 each. May 04: sold 4 units of inventory on account at a price of $800 each. May 05: Purchased an additional 6 units on account at a cost of $500. May 07: Paid $2500 against purchases to supplier of inventory. May 08: Sold 5 units of inventory for cash at a sale price of $850. May 10: Collected $3200 from the customer against the credit sales on May 04. Requirement: Prepare the journal entries to record the above transactions by using the following: 1. Perpetual inventory system 2. Periodic inventory system
Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows: Tatal Replecement Cost $129,800 99,900 47,000 33,300 Total Net Realizable Value $118,000 129,300 59,200 59,700 Product Total Cost $142,000 105,800 70,500 35,700 101 102 103 104 The normal profit is 20% of total cost. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. Replacement cost Inventory Value Product Total Cost NRV NRV NP Market 129,800 S 118,000 129,300 101 %24 142,000 5 105,800 70,500 102 99,900 103 47,000…
Auge Company annually purchases 1,000 tons of raw material at a cost of $100,000 with terms of 2/10, n/30. Auge uses the net price method to account for purchase discounts. Freight costs amount to $10,000 and storage and handling costs to $7,500. What is Net Purchase Amount?
The inventory of Royal Decking consisted of five products. Information about the December 31, 2021, inventory is as follows: Per Unit Product Cost Selling Price A $ 40 $ 60 B 80 100 C 40 80 D 100 130 E 20 30 Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. Required:What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory? Product Cost NRV Per Unit Inventory Value A B C D E