1. Columbia Bank and Trust is considering giving Gallup Company a loan. Before d
ID: 2480578 • Letter: 1
Question
1. Columbia Bank and Trust is considering giving Gallup Company a loan. Before doing so, it decides that further discussions with Gallup’s accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $289,750. Discussions with the accountant reveal the following.
Determine the correct inventory amount on December 31.
2. Kevin Farley, an auditor with Koews CPAs, is performing a review of Knight Company’s Inventory account. Knight did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $747,250. However, the following information was not considered when determining that amount.
Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g. -45 or parentheses e.g. (45).)
3. Delmott sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Delmott’s purchases of Xpert snowboards during September. During the same month, 102 Xpert snowboards were sold. Delmott uses a periodic inventory system.
Date
Explanation
Units
Unit Cost
Total Cost
15
$104
$ 1,560
44
107
4,708
51
110
5,610
21
112
2,352
131
$14,230
(a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.)
(b) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.)
FIFO
LIFO
AVERAGE-COST
4.
Date
Explanation
Units
Unit Cost
Total Cost
35
$10
$350
29
12
348
44
13
572
108
$1,270
1. Gallup sold goods costing $56,330 to Bazil Company FOB shipping point on December 28. The goods are not expected to reach Bazil until January 12. The goods were not included in the physical inventory because they were not in the warehouse. 2. The physical count of the inventory did not include goods costing $86,770 that were shipped to Gallup FOB destination on December 27 and were still in transit at year-end. 3. Gallup received goods costing $32,310 on January 2. The goods were shipped FOB shipping point on December 26 by Lynch Co. The goods were not included in the physical count. 4. Gallup sold goods costing $53,130 to Lamey of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Gallup’s physical inventory. 5. Gallup received goods costing $43,360 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $289,750.Explanation / Answer
Answer 1. Value of Inventory on Dec 31 - As per Gallup Co. 289,750.00 1. Goods Sold to Brazil Co. - 2. Goods In Transit Shipped to Gallup FOB Destination - 3. Goods in Transit Shipped to Gallup - FOB Shipping Point - Lynch Co. 32,310.00 4. Goods Sold in Canada - FOB Destination 53,130.00 5. Goods Recd on Jan -2. FOB Destination (43,360.00) Correct ValueInventory on Dec-31 331,830.00 As per Chegg Guidelines, You can ask only one question at a time. For other Questions please ask it again.
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