Accounting-I Chapter 6 Homework

Question
Duke Associates, antique dealers, purchased the contents of an estate for $37,500. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Duke Associates’ warehouse was $1,200. Duke Associates insured the shipment at a cost of $150. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of $490.

Determine the cost of the inventory acquired from the estate. (Omit the “$” sign in your response.)

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Park Company reported the following March purchases and sales data for its only product.

Date Activities Units Acquired at Cost Units sold at Retail
Mar. 1 Beginning Inventory 150 units @ $ 7.00 = $ 1,050
Mar. 10 Sales 90 units @ $ 15
Mar. 20 Purchase 220 units @ $ 6.00 = 1,320
Mar. 25 Sales 145 units @ $ 15
Mar. 30 Purchase 90 units @ $ 5.00 = 450
Totals 460 units $ 2,820 235 units

Park uses a perpetual inventory system. For specific identification, ending inventory consists of 225 units, where 90 are from the March 30 purchase, 80 are from the March 20 purchase, and 55 are from beginning inventory.

3.
Determine the cost assigned to ending inventory and to cost of goods sold using FIFO. (Omit the “$” sign in your response.)

4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO. (Omit the “$” sign in your response.)

Ripken Company’s ending inventory includes the following items.

Per Unit
Product Units Cost Market
Helmets 22 $ 50 $ 54
Bats 15 78 72
Shoes 36 95 91
Uniforms 40 36 36

Compute the lower of cost or market for ending inventory applied separately to each product. (Omit the “$” sign in your response.)

The following is information for Ryder Co.

2011 2010 2009
Cost of goods sold $ 643,825 $ 426,650 $ 391,300
Ending inventory 96,400 86,750 91,500

Use the above information to compute inventory turnover for 2010 and 2011, and its days’ sales in
inventory at December 31, 2010 and 2011. (Use 365 days a year. Do not round intermediate calculations. Round your answers to 1 decimal place.)

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