Bundle: Accounting, 27th Edition, Loose-leaf Version + Cengagenowv2, 1 Term Printed Access
27th Edition
ISBN: 9780357271803
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 7, Problem 7.4CP
Communication
Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows:
| Sales | ||
| April | 16,000 units | |
| May | 16,000 | |
| June | 20,000 | |
| July | 24,000 | |
| August | 28,000 | |
| September | 28,000 | |
| October | 18,000 | |
| November | 10,000 | |
| December | 8,000 | |
| Total units | 168,000 | |
| Total sales | $10,000,000 |
The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system.
Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the company’s financial statements.
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Record the following journal entries for Young Company:
(Click the icon to view the transactions.)
(Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
6. Purchased raw materials on account, $5,000.
Date
6.
Accounts Payable
Accounts and Explanation
Debit
Credit
Accounts Receivable
Cash
Cost of Goods Sold
Finished Goods Inventory
Manufacturing Overhead
Raw Materials Inventory
Sales Revenues
Wages Payable
Work-in-Process Inventory
More info
6. Purchased materials on account, $5,000.
7. Used $2,000 in direct materials and $700 in indirect materials in production.
8. Incurred $9,000 in labor costs, of which 60% was direct labor.
Print
Done
- X
The following information pertains to Miller Company for the year
(Click the icon to view the information.)
13.
Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base
14.
Determine the amount of overhead allocated during the year. Record the journal entry.
15.
Determine the amount of underallocated or overallocated overhead. Record the journal entry to adjust Manufacturing Overhead.
Data table
13. Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base
Estimated overhead cost
$
420,000
Estimated direct labor hours
12,000
Predetermined overhead
allocation rate
Estimated manufacturing overhead
Estimated direct labor hours
$420,000
Actual manufacturing overhead
12,000 hours Actual direct labor hours
$500,000
12,650 hours
35
per direct labor hour
14. Determine the amount of overhead allocated during the year. Record the journal entry.
Predetermined overhead allocation rate
35
Actual direct labor…
Problem 3-5B
Applying the accounting cycle
P1 P3 P4 P5 P6
On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following transactions occurred during the company's first month.
July 2
Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for its common stock.
3
5
10.
14.
24.
28.
29.
30.
31
The company rented equipment by paying $2,000 cash for the first month's (July) rent.
The company purchased $2,400 of office supplies for cash.
The company paid $7,200 cash for a 12-month insurance policy. Coverage begins on July 11.
The company paid an employee $1,000 cash for two weeks' salary earned.
The company collected $9,800 cash for storage revenue from customers.
The company paid $1,000 cash for two weeks' salary earned by an employee.
The company paid $950 cash for minor repairs to buildings.
The company paid $400 cash for this month's telephone bill.
The company paid $2,000 cash in dividends.
The company's chart of accounts follows:…
Chapter 7 Solutions
Bundle: Accounting, 27th Edition, Loose-leaf Version + Cengagenowv2, 1 Term Printed Access
Ch. 7 - Prob. 1DQCh. 7 - Why is it important to take a physical inventory...Ch. 7 - Do the terms FIFO, LIFO, and weighted average...Ch. 7 - If merchandise inventory is being valued at cost...Ch. 7 - Which of the three methods of inventory...Ch. 7 - If inventory is being valued at cost and the price...Ch. 7 - Using the following data, how should the...Ch. 7 - The inventory at the end of the year was...Ch. 7 - Hutch Co. sold merchandise to Bibbins Company on...Ch. 7 - A manufacturer shipped merchandise to a retailer...
Ch. 7 - Cost flow methods The following three identical...Ch. 7 - Cost flow methods The following three identical...Ch. 7 - Perpetual inventory using FIFO Beginning...Ch. 7 - Perpetual inventory using FIFO Beginning...Ch. 7 - Perpetual inventory using LIFO Beginning...Ch. 7 - Perpetual inventory using LIFO Beginning...Ch. 7 - Perpetual inventory using weighted average...Ch. 7 - Perpetual inventory using weighted average...Ch. 7 - Periodic inventory using FIFO, LIFO, and weighted...Ch. 7 - Periodic inventory using FIFO, LIFO, and weighted...Ch. 7 - Lower-of-cost-or-market method On the basis of the...Ch. 7 - Lower-of-cost-or-market method On the basis of the...Ch. 7 - Effect of inventory errors During the taking of...Ch. 7 - Effect of inventory errors During the taking of...Ch. 7 - Inventory turnover and days sales in inventory...Ch. 7 - Inventory turnover and days sales in inventory...Ch. 7 - Control of inventories Triple Creek Hardware Store...Ch. 7 - Control of inventories Hardcase Luggage Shop is a...Ch. 7 - Perpetual inventory using FIFO Beginning...Ch. 7 - Perpetual inventory using LIFO Assume that the...Ch. 7 - Perpetual inventory using LIFO Beginning...Ch. 7 - Perpetual inventory using FIFO Assume that the...Ch. 7 - FIFO and LIFO costs under perpetual inventory...Ch. 7 - Weighted average cost flow method under perpetual...Ch. 7 - Weighted average cost flow method under perpetual...Ch. 7 - Perpetual inventory using FIFO Assume that the...Ch. 7 - Perpetual inventory using LIFO Assume that the...Ch. 7 - Periodic inventory by three methods The units of...Ch. 7 - Periodic inventory by three methods; cost of...Ch. 7 - Comparing inventory methods Assume that a firm...Ch. 7 - Lower-of-cost-or-market inventory On the basis of...Ch. 7 - Merchandise inventory on the balance sheet Based...Ch. 7 - Effect of errors in physical inventory Missouri...Ch. 7 - Effect of errors in physical inventory Fonda...Ch. 7 - Error in inventory During 20Y5, the accountant...Ch. 7 - Inventory turnover The following data (in...Ch. 7 - Prob. 7.21EXCh. 7 - Retail method A business using the retail method...Ch. 7 - Retail method A business using the retail method...Ch. 7 - Retail method A business using the retail method...Ch. 7 - Retail method On the basis of the following data,...Ch. 7 - Gross profit method The merchandise inventory was...Ch. 7 - Gross profit method Based on the following data,...Ch. 7 - Gross profit method Based on the following data,...Ch. 7 - FIFO perpetual inventory The beginning inventory...Ch. 7 - LIFO perpetual inventory The beginning inventory...Ch. 7 - Weighted average cost method with perpetual...Ch. 7 - Periodic inventory by three methods The beginning...Ch. 7 - Periodic inventory by three methods Dymac...Ch. 7 - Lower-of-cost-or-market inventory Data on the...Ch. 7 - Retail method; gross profit method Selected data...Ch. 7 - FIFO perpetual inventory The beginning inventory...Ch. 7 - LIFO perpetual inventory The beginning inventory...Ch. 7 - Weighted average cost method with perpetual...Ch. 7 - Periodic inventory by three methods The beginning...Ch. 7 - Periodic inventory by three methods Pappas...Ch. 7 - Lower-of-cost-or-market inventory Data on the...Ch. 7 - Retail method; gross profit method Selected data...Ch. 7 - Ethics in Action Sizemo Elektroniks sells...Ch. 7 - Prob. 7.2CPCh. 7 - Communication Golden Eagle Company began...Ch. 7 - LIFO and inventory flows The following is an...Ch. 7 - Comparing inventory ratios for two companies...Ch. 7 - Comparing inventory ratios for three companies The...
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