chap8soln[1]

chap8soln[1] - B RIEF EXERCISE 8-1 Billie Joel Company...

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BRIEF EXERCISE 8-1 Billie Joel Company Balance Sheet (Partial) December 31 Current assets Cash $ 190,000 Receivables (net). ........................................................................ 400,000 Inventories Finished goods. ................................................................. $150,000 Work in process. ............................................................... 200,000 Raw materials. .................................................................. 335,000 685,000 Prepaid insurance. ..................................................................... 41,000 Total current assets. ....................................................... $1,316,000 BRIEF EXERCISE 8-2 Inventory (150 X $30). .............................................................................. 4,500 Accounts Payable. ....................................................................... 4,500 Accounts Payable (6 X $30). ................................................................... 180 Inventory . ...................................................................................... 180 Accounts Receivable (125 X $50). ......................................................... 6,250 Sales. ............................................................................................... 6,250 Cost of Goods Sold (125 X $30). ............................................................. 3,750 Inventory . ...................................................................................... 3,750 BRIEF EXERCISE 8-3 December 31 inventory per physical count $200,000 Goods-in-transit purchased FOB shipping point 15,000 Goods-in-transit sold FOB destination 22,000 December 31 inventory $237,000 BRIEF EXERCISE 8-4 Cost of goods sold as reported $1,400,000 Overstatement of 12/31/06 inventory (110,000) Overstatement of 12/31/07 inventory 45,000 Corrected cost of goods sold $1,335,000 12/31/07 retained earnings as reported $5,200,000 Overstatement of 12/31/07 inventory (45,000 ) Corrected 12/31/07 retained earnings $5,155,000 BRIEF EXERCISE 8-5 Weighted average cost per unit $11,850 = $11.85
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1,000 Ending inventory 300 X $11.85 = $3,555 Cost of goods available for sale $11,850 Deduct ending inventory 3,555 Cost of goods sold (700 X $11.85) $ 8,295 BRIEF EXERCISE 8-6 Ending inventory (April 23) 300 X $13 = $3,900 Cost of goods available for sale $11,850 Deduct ending inventory 3,900 Cost of goods sold $ 7,950
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BRIEF EXERCISE 8-7 April 1 250 X $10 = $2,500 April 15 50 X $12 = 600 Ending inventory $3,100 Cost of goods available for sale $11,850 Deduct ending inventory 3,100 Cost of goods sold $ 8,750 BRIEF EXERCISE 8-8 2005 $100,000 2006 $123,200 ÷ 1.10 = $112,000 $100,000 X 1.00 $100,000 $12,000* X 1.10 13,200 $113,200 *$112,000 – $100,000 2007 $134,560 ÷ 1.16 = $116,000 $100,000 X 1.00 $100,000 $12,000 X 1.10 13,200 $4,000** X 1.16 4,640 $117,840 BRIEF EXERCISE 8-9 2006 inventory at base amount ($21,708 ÷ 1.08) $20,100 2005 inventory at base amount (19,750 ) Increase in base inventory
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chap8soln[1] - B RIEF EXERCISE 8-1 Billie Joel Company...

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