# Homework__4_S2007_answers - ORIE 350 Homework#4 Due Tuesday...

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ORIE 350 Homework #4 Due Tuesday, February 20, 2007 Graded Problems: 1) Snoop Industries is a merchandiser that sells obscure machine parts. The manager finds that they have 150 ackbars, 225 bizwacks, and 148 cogs in inventory at the end of the quarter on Sept. 30, 2006. Each item is currently listed at its historical cost. The following data are available for these items: Ackbars Bizwacks Cogs Estimated Selling Price per Unit \$110 \$120 \$90 Estimated Repair Expenses per Unit 10 20 30 Cost per Unit 80 80 80 Replacement Cost per Unit 70 120 30 Normal Profit per Unit 20 30 20 a. Find the proper value to assign to each item in inventory. Ackbars: NRV = 100, NAC = 80, RC = 70, Market = 80, Cost = 80, keep at \$80 Bizwacks: NRV = 100, NAC = 70, RC = 120, Market = 100, Cost = 80, keep at \$80 Cogs: NRV = 60, NAC = 40, RC = 30, Market = 40, Cost = 80, re-value at \$40 b. Provide the necessary adjusting journal entry on Sept. 30, 2006 to correct the amount shown in Inventory on the balance sheet. Sept. 30, 2006 Inventory Holding Loss \$5,920 Inventory \$5,920

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2) DeffTone Industries sells specialty audio equipment. On February 14, 2007, the company sold new audio equipment to Cornell University for \$1,800.
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