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    Group Assignment 2014

    Uploaded by

    Samuel Abera
    This document provides instructions for 5 group assignments for regular students at Bahir Dar University. The assignments involve: 1. Journalizing inventory transactions for a company using a perpetual inventory system. 2. Calculating the inventory amount that should be reported on a company's statement of financial position based on various inventory shipments and receipts. 3. Computing cost of goods sold using different inventory cost flow methods. 4. Estimating inventory for a company using the gross profit method for monthly reporting. 5. Recording a journal entry for the purchase of new equipment that includes a trade-in of used equipment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Group Assignment 2014

    Uploaded by

    Samuel Abera
    53 views3 pages
    This document provides instructions for 5 group assignments for regular students at Bahir Dar University. The assignments involve: 1. Journalizing inventory transactions for a company using a perpetual inventory system. 2. Calculating the inventory amount that should be reported on a company's statement of financial position based on various inventory shipments and receipts. 3. Computing cost of goods sold using different inventory cost flow methods. 4. Estimating inventory for a company using the gross profit method for monthly reporting. 5. Recording a journal entry for the purchase of new equipment that includes a trade-in of used equipment.

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    This document provides instructions for 5 group assignments for regular students at Bahir Dar University. The assignments involve: 1. Journalizing inventory transactions for a company using a perpetual inventory system. 2. Calculating the inventory amount that should be reported on a company's statement of financial position based on various inventory shipments and receipts. 3. Computing cost of goods sold using different inventory cost flow methods. 4. Estimating inventory for a company using the gross profit method for monthly reporting. 5. Recording a journal entry for the purchase of new equipment that includes a trade-in of used equipment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    53 views3 pages

    Group Assignment 2014

    Uploaded by

    Samuel Abera
    This document provides instructions for 5 group assignments for regular students at Bahir Dar University. The assignments involve: 1. Journalizing inventory transactions for a company using a perpetual inventory system. 2. Calculating the inventory amount that should be reported on a company's statement of financial position based on various inventory shipments and receipts. 3. Computing cost of goods sold using different inventory cost flow methods. 4. Estimating inventory for a company using the gross profit method for monthly reporting. 5. Recording a journal entry for the purchase of new equipment that includes a trade-in of used equipment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Group Assignment For Regular Students

    Bahir Dar University


    College of Business and Economics
    Accounting and Finance Department

    Work out the following questions, show all the necessary steps
    1. Matlock Plc uses a perpetual inventory system. Its beginning inventory consists of 50
    units that cost €34 each. During June, the company purchased 150 units at €34 each,
    returned 6 units for credit, and sold 125 units at €50 each.

    Instruction
    Journalize the June transactions.

    2. In your audit of Garza Company, you find that a physical inventory on December 31,
    2019, showed merchandise with a cost of $441,000 was on hand at that date. You also
    discover the following items were all excluded from the $441,000.
    a. Merchandise of $61,000 which is held by Garza on consignment. The consignor is
    the Bontemps Company.
    b. Merchandise costing $33,000 which was shipped by Garza f.o.b. destination to a
    customer on December 31, 2019. The customer was expected to receive the
    merchandise on January 6, 2020.
    c. Merchandise costing $46,000 which was shipped by Garza f.o.b. shipping point to
    a customer on December 29, 2019. The customer was scheduled to receive the
    merchandise on January 2, 2020.
    d. Merchandise costing $73,000 shipped by a vendor f.o.b. destination on December
    30, 2019, and received by Garza on January 4, 2020.
    e. Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on
    December 31, 2019, and received by Garza on January 5, 2020.

    Instructions

    Based on the above information, calculate the amount that should appear on Garza's statement of
    financial position at December 31, 2019, for inventory.

    Prepared By Hunegnaw A Page 1


    Group Assignment For Regular Students

    3. Walya Plc is a multiproduct firm. The following is information concerning one of its
    Date Transaction Quantity Price/cost products, the
    1/1 Beginning Inventory 1000 $.12 Mattress.
    2/4 Purchase 2000 18
    2/20 Sales 2500 30
    4/2 Purchase 3000 23
    11/4 Sales 2200 33

    Instructions

    Compute cost of goods sold, assuming Walya Plc uses:

    a. Periodic system, FIFO cost flow.


    b. Perpetual system, FIFO cost flow.
    c. Periodic system, weighted-average cost flow.
    d. Perpetual system, moving-average cost flow.

    4. Astaire ASA uses the gross profit method to estimate inventory for monthly reporting
    purposes. Presented below is information for the month of May.

    Inventory, May 1 €   160,000


    Purchases (gross) 640,000
    Freight-in 30,000
    Sales 1,000,000
    Sales returns 70,000
    Purchase discounts 12,000
    Instructions

    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.

    Prepared By Hunegnaw A Page 2


    Group Assignment For Regular Students

    5. Yintang Group has negotiated the purchase of a new piece of automatic


    equipment at a price of $7,000 plus tradein, f.o.b. factory. Yintang paid
    $7,000 cash and traded in used equipment. The used equipment had
    originally cost $62,000; it had a book value of $42,000 and a secondhand
    fair value of $45,800, as indicated by recent transactions involving similar
    equipment. Freight and installation charges for the new equipment required a
    cash payment of $1,100.

    Instructions

    a) Prepare the general journal entry to record this transaction, assuming that the
    exchange has commercial substance.
    b) Assuming the same facts as in (a) except that fair value information for the
    assets exchanged is not determinable; prepare the general journal entry to
    record this transaction.

    Prepared By Hunegnaw A Page 3

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