In terms of inventory, we will assume that all FIFO numbers are correct. Also, we will assume that the LCM computations are done, and no adjustment is needed. Red Robin purchased $904,250, gross amount (i.e., no discounts have yet been applied to this amount) of raw materials. $89,200 of this was purchased in the last 10 days, and so has not been paid for at the end of the year.") All of the inventory purchased this year ($904,250) had payment terms of 5/10 n 30. Red Robin took advantage of all discounts except for one purchase of $25,000. In this case, Red Robin accidentally missed the 10-day cutoff and paid on day 12. The payment for this $25,000 purchase has been paid for by the end of the year. Transferred from Raw Materials to Work in Process: $875,215 Production costs (assume paid with cash) allocated to Work in Process: $502,250 for book purposes. Work in Process transferred to Finished Goods: $1,748,635 The FIFO measurement of inventory shipped this year is as follows (note you already accounted for this in an earlier week): From revenue contracts completed before the current year: $476,300. From contract with South University: $26,888 From contract with New Zork: $144,687 From all other contacts initiated throughout the year: $1,245,822. Footnote: Of this amount, $34,755 is still in transit as of December 31. The sales price of these goods is $64,300.

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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Prepare all necessary journal entries related to the purchase of inventory and the transfer of inventory, and the allocation of production costs.

General Info:

In terms of inventory, we will assume that all FIFO numbers are correct. Also, we will assume that the LCM computations are done, and no adjustment is needed.

Red Robin purchased $904,250, gross amount (i.e., no discounts have yet been applied to this amount) of raw materials. $89,200 of this was purchased in the last 10 days, and so has not been paid for at the end of the year.")

All of the inventory purchased this year ($904,250) had payment terms of 5/10 n 30. Red Robin took advantage of all discounts except for one purchase of $25,000. In this case, Red Robin accidentally missed the 10-day cutoff and paid on day 12. The payment for this $25,000 purchase has been paid for by the end of the year.

Transferred from Raw Materials to Work in Process: $875,215
Production costs (assume paid with cash) allocated to Work in Process: $502,250 for book purposes.
Work in Process transferred to Finished Goods: $1,748,635

The FIFO measurement of inventory shipped this year is as follows (note you already accounted for this in an earlier week):

From revenue contracts completed before the current year: $476,300.
From contract with South University: $26,888
From contract with New Zork: $144,687
From all other contacts initiated throughout the year: $1,245,822.

Footnote:

Of this amount, $34,755 is still in transit as of December 31. The sales price of these goods is $64,300.

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