Week+3+Individual+Assignments[1]

Week+3+Individual+Assignments[1] - ACC422 Intermediate...

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ACC422 – Intermediate Accounting II I3-1:   The Red Sky company is a wholesale company that purchases items from  manufacturers and sells them to retail establishments. On December 31, 2010 Red Sky had the following in ending inventory: Product Code Quantity Cost Each Current  Replacement Cost  Each AB72YZ 1,970 $58 $63 CT68WS 3,280 38 36 FA92PL 1,640 51 57 GG18CF 660 109 125 IR39QL 1,310 131 145 TG56LK 5,250 10 15 HB83SD 985 154 152 Product GG18CF has been replaced by product IR39QL.  Red Sky expects to be able  to sell its remaining inventory of product GG18CF at a deep discount to an outlet store  for a net realizable value of $38 each. 1) Compute the value of the inventory as of December 31, 2010 using each of the  following assumptions: a. The lower of cost or market method is applied directly to each item. b. The lower of cost or market method is applied to the total inventory.
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2) Prepare any necessary adjusting journal entries assuming that the company  used the direct method, using each of the following assumptions a. The lower of cost or market method is applied directly to each item. b. The lower of cost or market method is applied to the total inventory.
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  The Green Grass Company reports the following information as of June 30, 2011: Accounts Receivable $3,600,000 Accounts Payable 2,800,000 June Sales 4,700,000 June Sales Returns 330,000 Purchases of Inventory (gross) 3,000,000 Purchase Discounts 60,000 Purchases Freight In 140,000 Inventory, June 1 750,000 1) Assuming that the gross profit is 27% of sales, compute the estimated ending inventory as of June 30, 2011. 2) Assuming that the gross profit is 32% of cost, compute the estimated ending
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Week+3+Individual+Assignments[1] - ACC422 Intermediate...

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