Chap9soln[1]

# Chap9soln[1] - BRIEFEXERCISE91(a(b(c Ceiling...

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BRIEF EXERCISE 9-1 (a) Ceiling \$198.00 (\$217 – \$19) Floor \$166.00 (\$217 – \$19 – \$32) (b) \$106.00 (c) \$51.00 BRIEF EXERCISE 9-2 Item Cost Designated  Market LCM Jokers \$2,000 \$1,900 \$1,900 Penguins   5,000   4,950   4,950 Riddlers     4,400     4,550   4,400 Scarecrows     3,200   3,070   3,070 BRIEF EXERCISE 9-3 (a) Direct method Cost of Goods Sold. ................................................................................. 17,000 Inventory. ..................................................................................... 17,000 (b) Indirect method Loss Due to Market Decline of Inventory. .............................................. 17,000 Allowance to Reduce Inventory to Market. ............................... 17,000 BRIEF EXERCISE 9-4 Group Number  of CDs Sales  Price  per CD Total  Sales  Price Relative  Sales  Price Total  Cost Cost  Allocated to  CDs Cost per  CD 1 100 \$  5 \$     500    5/100* X \$6,000 = \$   300    \$3** 2 800 \$10     8,000 80/100 X \$6,000 =   4,800 \$6 3 100 \$15     1,500 15/100 X \$6,000 =      900 \$9 \$10,000 \$6,000 *\$500/\$10,000 = 5/100 **\$300/100 = \$3 BRIEF EXERCISE 9-5 Unrealized Holding Loss—Income (Purchase    Commitments). ........................................................................................... 70,000 Estimated Liability on Purchase     Commitments. ............................................................................... 70,000 BRIEF EXERCISE 9-6 Purchases (Inventory). ................................................................................. 930,000 Estimated Liability on Purchase Commitments. ........................................ 70,000 Cash. ................................................................................................. 1,000,000

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BRIEF EXERCISE 9-7 Beginning inventory \$150,000 Purchases   500,000 Cost of goods available 650,000 Sales \$700,000 Less gross profit (31% X 700,000)   217,000 Estimated cost of goods sold   483,000 Estimated ending inventory destroyed in fire \$167,000
BRIEF EXERCISE 9-8 Cost Retail Beginning inventory \$  12,000 \$  20,000 Net purchases 120,000 170,000 Net markups                          10,000 Totals \$132,000 200,000 Deduct: Net markdowns 7,000 Sales   157,000 Ending inventory at retail \$  36,000 Cost-to-retail ratio: \$132,000 ÷ \$200,000 = 66% Ending inventory at lower of cost or market (66% X \$36,000) = \$23,760 BRIEF EXERCISE 9-9 Inventory turnover: \$198,747 = 7.79 times \$26,612 + \$24,401 2 Average days to sell inventory: 365 ÷ 7.79 = 46.9 days *BRIEF EXERCISE 9-10 Cost Retail Beginning inventory \$  12,000 \$  20,000 Net purchases 120,000 170,000 Net markups 10,000 Net markdowns _______    (7,000 ) Total (excluding beginning inventory)   120,000 173,000 Total (including beginning inventory)

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## This note was uploaded on 08/31/2010 for the course AEM 3360 at Cornell.

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Chap9soln[1] - BRIEFEXERCISE91(a(b(c Ceiling...

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