Ripken Company uses a perpetual inventory system and reported the following transactions involving inventory during the month of April 2019: April 1 Beginning inventory 4 Purchases 30 Sales @ $150 @ $160 @ $200 70 units 30 units 90 units Required: (Show all calculations) a. Calculate the Cost of Goods Sold on April 30, 2019 for Ripken Company using the following cost flow assumptions: (i) Weighted Average Cost method and (ii) First-In-First-Out (FIFO) method. b. Calculate the Gross Profit for the month ended April 30, 2019 for Ripken Company using the following cost flow assumptions: (i) Weighted Average Cost method and (ii) First-In-First-Out (FIFO) method. c. If costs were rising instead of falling, which cost flow assumptions in (a) would report the highest profit for the current year? Explain. d. Ripken Company's perpetual inventory system indicate that the Inventory account has a balance of $675,400 as at December 31, 2019. However, a physical count shows that the inventory on hand has a cost of only 663,800. Journalize the entry for the inventory shrinkage for Ripken Company for the year ended December 31, 2019. Assume that the inventory shrinkage is a normal amount. Explanation for the journal entry is NOT required.
Ripken Company uses a perpetual inventory system and reported the following transactions involving inventory during the month of April 2019: April 1 Beginning inventory 4 Purchases 30 Sales @ $150 @ $160 @ $200 70 units 30 units 90 units Required: (Show all calculations) a. Calculate the Cost of Goods Sold on April 30, 2019 for Ripken Company using the following cost flow assumptions: (i) Weighted Average Cost method and (ii) First-In-First-Out (FIFO) method. b. Calculate the Gross Profit for the month ended April 30, 2019 for Ripken Company using the following cost flow assumptions: (i) Weighted Average Cost method and (ii) First-In-First-Out (FIFO) method. c. If costs were rising instead of falling, which cost flow assumptions in (a) would report the highest profit for the current year? Explain. d. Ripken Company's perpetual inventory system indicate that the Inventory account has a balance of $675,400 as at December 31, 2019. However, a physical count shows that the inventory on hand has a cost of only 663,800. Journalize the entry for the inventory shrinkage for Ripken Company for the year ended December 31, 2019. Assume that the inventory shrinkage is a normal amount. Explanation for the journal entry is NOT required.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Transcribed Image Text:Ripken Company uses a perpetual inventory system and reported the following transactions
involving inventory during the month of April 2019:
April 1 Beginning inventory
4 Purchases
30 Sales
@ $150
@ $160
@ $200
70 units
30 units
90 units
Required:
(Show all calculations)
a. Calculate the Cost of Goods Sold on April 30, 2019 for Ripken Company using the
following cost flow assumptions:
(i) Weighted Average Cost method and
(ii) First-In-First-Out (FIFO) method.
b. Calculate the Gross Profit for the month ended April 30, 2019 for Ripken Company using
the following cost flow assumptions:
(i) Weighted Average Cost method and
(ii) First-In-First-Out (FIFO) method.
c. If costs were rising instead of falling, which cost flow assumptions in (a) would report the
highest profit for the current year? Explain.
d. Ripken Company's perpetual inventory system indicate that the Inventory account has a
balance of $675,400 as at December 31, 2019. However, a physical count shows that the
inventory on hand has a cost of only 663,800.
Journalize the entry for the inventory shrinkage for Ripken Company for the year ended
December 31, 2019. Assume that the inventory shrinkage is a normal amount.
Explanation for the journal entry is NOT required.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education