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ACC 422 Week 3 WileyPLUS Assignment
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Exercise 9-1
The inventory of Oheto Company on December 31, 2013, consists of the following items.
Part No.
Quantity
Cost per Unit
Cost to Replace per Unit
110
620
$126
$133
111
1,140
80
69
112
580
106
101
113
230
226
239
120
450
273
277
121
1,650
21
19
122
330
319
313
Part No. 121 is obsolete and has a realizable value of $0.7 each as scrap.
(a) Determine the inventory as of December 31, 2013, by the lower-of-cost-or-market method, applying this method directly to each item.
(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.
Exercise 9-12
Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.
Inventory, May 1
$ 171,000
Purchases (gross)
655,400
Freight-in
31,400
Sales
1,057,500
Sales returns
82,500
Purchase discounts
12,990
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.
Exercise 10-5
Allegro Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.http://edugen.wiley.com/edugen/art2/common/pixel.gif
Abstract company’s fee for title search
$1,752
Architect’s fees
10,683
Cash paid for land and dilapidated building thereon
310,040
Removal of old building
$67,400
Less: Salvage
18,535
48,865
Interest on short-term loans during construction
24,938
Excavation before construction for basement
64,030
Machinery purchased (subject to 2% cash discount, which was not taken)
219,050
Freight on machinery purchased
4,516
Storage charges on machinery, necessitated by noncompletion of
building when machinery was delivered
7,347
New building constructed (building construction took 6 months from
date of purchase of land and old building)
1,634,450
Assessment by city for drainage project
5,392
Hauling charges for delivery of machinery from storage to new building
2,089
Installation of machinery
6,740
Trees, shrubs, and other landscaping after completion of building
(permanent in nature)
18,198
Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation.
Exercise 10-12
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Below are transactions related to Impala Company.
(a)
The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $90,900.
(b)
14,000 shares of common stock with a par value of $52 per share are issued in exchange for land and buildings. The property has been appraised at a fair value of $909,000, of which $186,500 has been allocated to land and $722,500 to buildings. The stock of Impala Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $68 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $60 per share.
(c)
No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead the amounts properly chargeable to plant asset accounts for machinery constructed during the year. The following information is given relative to costs of the machinery constructed.
Materials used
$12,880
Factory supplies used
970
Direct labor incurred
17,030
Additional overhead (over regular) caused by construction of machinery, excluding factory supplies used
2,570
Fixed overhead rate applied to regular manufacturing operations
60% of direct labor cost
Cost of similar machinery if it had been purchased from
outside suppliers
45,020
Prepare journal entries on the books of Impala Company to record these transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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