homework%20solutions%20chapter%208a

homework%20solutions%20chapter%208a - E8-2The second...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: E8-2The second purchase for $4,000 shipped F.O.B. shipping point is included in the inventory on December 31, 2007, since legal title to the goods is transferred to the buyer at the shipping point. The cost assigned to the purchase is $4,000 (net of any purchases discounts) plus any payments directly associated with the inventory such as freight, receiving, unpacking, inspecting, storage, insurance, applicable taxes, and similar costs. The first purchase of $3,000 shipped F.O.B. destination is excluded from the inventory.E8-31.These goods are not included in inventory until they are actually received.2.These purchases are included in inventory (unless they are goods received on consignment).E8-3 (continued)3.This product (unit sold) is included in inventory until received by the purchaser.4.Since these purchases are still in the control of the Golosow Company, they are included in inventory.5.The product is included in inventory until shipped, if shipped F.O.B. shipping point, or until they are received by the purchaser, if shipped F.O.B. destination.6.This product is included in inventory.E8-4Dec.Purchase Rebate Receivable ($25 x 1,100) 27,500Inventory (or Purchases) 27,500To account for rebate claimed on washingmachines purchased this year.Jan.Cash 27,500Purchase Rebate Receivable 27,500To account for receipt of rebate onwashing machines purchased last year.The effect of this rebate is to reduce the cost of each washing machine purchased during the year by $25, thereby reducing the cost of the ending inventory by the number of washing machines purchased this year and not sold multiplied by $25 per unit. The rebate has no effect on the valuation of ending inventory if the LIFO method is used and all units purchased during the year are sold.E8-51.Inventory (or Purchases) 20,000Accounts Payable 20,000To record inventory purchase; gross price $20,000, terms of 2/10, n/30.Accounts Payable 20,000Purchases Discounts Taken ($20,000 x 0.02) 400Cash 19,600To record payment within the discount period.E8-5 (continued)2.Inventory (or Purchases) 19,600Accounts Payable [$20,000 - ($20,000 x 0.02)] 19,600To record inventory purchase; gross price$20,000, terms 2/10, n/30.Accounts Payable 19,600Cash 19,600To record payment within the discount period.E8-81.FIFO: Cost of Goods Sold (650 units):June 6300 units:200 units @ $3.20$ 640100 units @ $3.50 350June 21200 units:100 units @ $3.50 350100 units @ $3.60 360June 27150 units:150 units @ $3.60 540 $2,240Ending Inventory (300 units):Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory...
View Full Document

This note was uploaded on 04/17/2008 for the course ACCT 3110 taught by Professor Stanwick during the Spring '08 term at Auburn University.

Page1 / 16

homework%20solutions%20chapter%208a - E8-2The second...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online