ACC 422 Week 3 WileyPLUS Assignment

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ACC 422 Week 3 WileyPLUS Assignment

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Part No. 121 is obsolete and has a realizable value of $0.7 each as scrap.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.

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

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 ofmachinery, 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 fromoutside 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.)