Chapter 8 solutions on discussion questions

Chapter 8 solutions on discussion questions - BUSI1002...

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BUSI1002 Introduction to Accounting Class Discussion Chapter 8 Suggested Solutions for Discussion Questions Ex. 8.6 a. 1. Loss from Write-down of Inventory ………………………………. 2,400 Inventory ……………………………………………… 2,400 To write down the inventory of 28 units of WordCrafter to the lower-of-cost-or-market: Cost ……………………………………. $9,400 Replacement cost (28 units @ $250) ………. 7,000 Reduction in carrying value ……………… $2,400 2. Cash ……………………………………………………………… 5,250 Sales …………………………………………………. . 5,250 To recognize the sales revenue from the sale of 15 WordCrafter programs @ $350, cash. Cost of Goods Sold ………………………………………. 3,750 Inventory ………………………………………………. . 3,750 To record cost of 15 WordCrafter programs sold on January 9 using the FIFO flow assumption. (All units are carried in inventory at $250 following the year-end reduction to the lower-of-cost-or- market.) b. 1. Cost of Goods Sold ………………………………………………. 1,200 Inventory ………………………………………………. . 1,200 To record shrinkage loss of 3 units of WordCrafter software using the FIFO flow assumption (3 units @ $400). 2.
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Chapter 8 solutions on discussion questions - BUSI1002...

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