shegg com/homework belp/questions-and-answers/company-takes-physical inventory-c
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shegg com/homework belp/questions-and-answers/company-takes-physical inventory-count-end-year hegg Study TEXTBOOK SOLUTIONS EXPERT OLA Search The company takes a physical inventory count at the end of the year and adjusts their inventory and cost of goods sold if there is a difference between the inventory value determined from the actual count compared to the value in the general ledger. The information below includes the number of units counted in inventory at the end of the year and the purchases of inventory during the month. Number of units held in the company's inventory at 12/31/2016 based on a count of the inventory was 17,728 units. A listing of purchases during the month of December are as follows Date Quantity Purchased Unit Cost Total Cost 12/5/16 15,000 3,75 56,250 12/14/16 6,500 4.00 26,000 12/21/16 7,500 450 33,750 The company uses FIFO to account for its inventory cost. what is the cost of the company's nndinn ?nunntandmiind nnnm. tn nn.nr+ Hnll+,-M4,he calculation below for full credit) ?.i. The balance in inventory per the What is the amount of the Dece credit)? Get this answer with Chegg Study View this answer Complete below the adjusting jc The company has estimated, ba ultimately not be collected. Theretore, they provide an allowance tor bad aebts at that level ???11????????Explanation / Answer
The first two parts are related to a single question and third one (accounts receivable) is related to some other question, the details of which are not available. Therefore, I have answered both the parts of inventory related question.
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Part 1)
The cost of ending inventory as per FIFO is calculated as below:
Total Quantity Sold = Total Quantity Purchased - Ending Inventory = (15,000 + 6,500 + 7,500) - 17,728 = 11,272
As we are considering the FIFO method, we can conclude that all the units sold will belong to the purchases made on 12/5/16 as there is no beginning inventory. Therefore, the ending inventory will comprise of 3,728 units from 12/5/16 purchases, 6,500 units from 12/14/16 purchased and 7,500 units from 12/21/16.
Now, we can arrive at the cost of ending inventory as below:
Cost of Ending Inventory (FIFO) = 3,728*3.75 + 6,500*4 + 7,500*4.5 = $73,730
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Part 2)
The amount of the December 31 adjustment to inventory cost is calculated as below:
Amount of December 31 Adjustment to Inventory Cost = Inventory Amount as per Unadjusted Trial Balance - Inventory Amount as per Physical Inventory Count = 76,730 - 73,730 = $3,000
The adjusting entry is prepared as follows:
Date Account Titles Debit Credit 12/31/16 Cost of Goods Sold $3,000 Merchandise Inventory $3,000Related Questions
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