t the beginning of November, Yoshi Inc.’s inventory consists of 67 units with a cost per unit of $96. The following transactions occur during the month of November. November 2 Purchase 75 units of inventory on account from Toad Inc. for $100 per unit, terms 1/10, n/30. November 3 Pay cash for freight charges related to the November 2 purchase, $150. November 9 Return 25 defective units from the November 2 purchase and receive credit. November 11 Pay Toad Inc. in full. November 16 Sell 100 units of inventory to customers on account, $12,300. [Hint: The cost of units sold from the November 2 purchase includes $100 unit cost plus $3 per unit for freight less $1 per unit for the purchase discount, or $102 per unit.] November 20 Receive full payment from customers related to the sale on November 16. November 21 Purchase 53 units of inventory from Toad Inc. for $106 per unit, terms 3/10, n/30. November 24 Sell 65 units of inventory to customers for cash, $7,400. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on November 20.) Requirments 1. Assuming that Yoshi Inc. uses a FIFO perpetual inventory system to maintain its internal inventory records, record the transactions. 2. Suppose by the end of November that the remaining inventory is estimated to have a net realizable value per unit of $82, record any necessary adjustment for the lower of cost and net realizable value 3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment for lower of cost and net realizable value.
t the beginning of November, Yoshi Inc.’s inventory consists of 67 units with a cost per unit of $96. The following transactions occur during the month of November. November 2 Purchase 75 units of inventory on account from Toad Inc. for $100 per unit, terms 1/10, n/30. November 3 Pay cash for freight charges related to the November 2 purchase, $150. November 9 Return 25 defective units from the November 2 purchase and receive credit. November 11 Pay Toad Inc. in full. November 16 Sell 100 units of inventory to customers on account, $12,300. [Hint: The cost of units sold from the November 2 purchase includes $100 unit cost plus $3 per unit for freight less $1 per unit for the purchase discount, or $102 per unit.] November 20 Receive full payment from customers related to the sale on November 16. November 21 Purchase 53 units of inventory from Toad Inc. for $106 per unit, terms 3/10, n/30. November 24 Sell 65 units of inventory to customers for cash, $7,400. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on November 20.) Requirments 1. Assuming that Yoshi Inc. uses a FIFO perpetual inventory system to maintain its internal inventory records, record the transactions. 2. Suppose by the end of November that the remaining inventory is estimated to have a net realizable value per unit of $82, record any necessary adjustment for the lower of cost and net realizable value 3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment for lower of cost and net realizable value.
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 6EA: Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly income statement...
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At the beginning of November, Yoshi Inc.’s inventory consists of 67 units with a cost per unit of $96. The following transactions occur during the month of November.
| November | 2 | Purchase 75 units of inventory on account from Toad Inc. for $100 per unit, terms 1/10, n/30. | ||
| November | 3 | Pay cash for freight charges related to the November 2 purchase, $150. | ||
| November | 9 | Return 25 defective units from the November 2 purchase and receive credit. | ||
| November | 11 | Pay Toad Inc. in full. | ||
| November | 16 | Sell 100 units of inventory to customers on account, $12,300. [Hint: The cost of units sold from the November 2 purchase includes $100 unit cost plus $3 per unit for freight less $1 per unit for the purchase discount, or $102 per unit.] | ||
| November | 20 | Receive full payment from customers related to the sale on November 16. | ||
| November | 21 | Purchase 53 units of inventory from Toad Inc. for $106 per unit, terms 3/10, n/30. | ||
| November | 24 |
Sell 65 units of inventory to customers for cash, $7,400. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on November 20.) Requirments 1. Assuming that Yoshi Inc. uses a FIFO perpetual inventory system to maintain its internal inventory records, record the transactions. 2. Suppose by the end of November that the remaining inventory is estimated to have a net realizable value per unit of $82, record any necessary adjustment for the lower of cost and net realizable value 3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment for lower of cost and net realizable value. |
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