Jameson, Inc. had the following balances and transactions during 2019 Beginning

Question

Jameson, Inc. had the following balances and transactions during 2019 Beginning Merchandise Inventory as of January 1, 2019 240 units at $72 March 10 June 10 October 30 Sold 60 units Purchased 175 units at $79 Sold 175 units What would be reported for Cost of Goods Sold on the income statement for the year ending December 31, 2019 if the perpetual inventory system and the last-in, first- out inventory costing method are used? O A $4,320 O B. $18.145 O C. $13,825 O D. $16,920 On December 1, 2018, Restaurant Equipment, Inc. sold machinery to a customer for $22,000. The customer could not pay at the time of sale but agreed to pay 3 months later and signed a 3-month note at 8% interest. What was the total amount of cash colected by Restaurant Equipment on the maturity of the note? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dolar) O A. $22.440 O B. $21,560 OC. $440 OD. S23.760

Explanation / Answer

Question 1: The answer is B

Calculation of Cost of Goods Sold during 2019 under [LIFO costing]

180 units x $72 = $12,960

[240 units - 60 units = 180 units]

180 units x $72 = $12,960

+

175 units x $79 = $13,825

175 units x $79 = $13,825

(On LIFO basis)

180 units x $72 = $12,960

Therefore Cost of Goods Sold = $4,320 + $13,825 = $18,145

Question 2 The answer is A

Calculation of maturity value of 3 month 8% note:

***Here 8% interest is for 12 months. we have calculate interest for 3 months only.

Initial Cost of note [Machinery cost] = $22,000

Add: Interest for 3 months [$22,000 x 8 % x 3/12] = $440

Maturity value of the note = $22,440

Date Purchases Sales (At cost) Balance January 1 240 units x $72 = $17,280 March 10 60 units x $72 = $4,320

180 units x $72 = $12,960

[240 units - 60 units = 180 units]

June 10 175 units x $79 = $13,825

180 units x $72 = $12,960

+

175 units x $79 = $13,825

October 30

175 units x $79 = $13,825

(On LIFO basis)

180 units x $72 = $12,960

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.