Reference no: EM132464898

Question 1 - Novak Machine Company maintains a general ledger account for each class of inventory, debiting such accounts for increases during the period and crediting them for decreases. The transactions below relate to the Raw Materials inventory account, which is debited for materials purchased and credited for materials requisitioned for use.

1. An invoice for $18,225, terms f.o.b. destination, was received and entered January 2, 2020. The receiving report shows that the materials were received December 28, 2019.

2. Materials costing $63,000, shipped f.o.b. destination, were not entered by December 31, 2019, "because they were in a railroad car on the company's siding on that date and had not been unloaded."

3. Materials costing $16,425 were returned to the supplier on December 29, 2019, and were shipped f.o.b. shipping point. The return was entered on that date, even though the materials are not expected to reach the supplier's place of business until January 6, 2020.

4. An invoice for $16,875, terms f.o.b. shipping point, was received and entered December 30, 2019. The receiving report shows that the materials were received January 4, 2020, and the bill of lading shows that they were shipped January 2, 2020.

5. Materials costing $44,550 were received December 30, 2019, but no entry was made for them because "they were ordered with a specified delivery of no earlier than January 10, 2020."

Required - Prepare correcting general journal entries required at December 31, 2019, assuming that the books have not been closed.

Question 2 - Tamarisk Company uses a periodic inventory system. For April, when the company sold 550 units, the following information is available.

	Units	Unit Cost	Total Cost
April 1 inventory	230	$26	$5,980
April 15 purchase	360	31	11,160
April 23 purchase	410	34	13,940
	1,000		$31,080

Required -

1. Calculate weighted average cost per unit.

2. Compute the April 30 inventory and the April cost of goods sold using the average-cost method.

Question 3 - In your audit of Michael Jones Company, you find that a physical inventory on December 31, 2020, showed merchandise with a cost of $427,060 was on hand at that date. You also discover the following items were all excluded from the $427,060.

1. Merchandise of $58,470 which is held by Jones on consignment. The consignor is the Max Suzuki Company.

2. Merchandise costing $35,530 which was shipped by Jones f.o.b. destination to a customer on December 31, 2020. The customer was expected to receive the merchandise on January 6, 2021.

3. Merchandise costing $46,250 which was shipped by Jones f.o.b. shipping point to a customer on December 29, 2020. The customer was scheduled to receive the merchandise on January 2, 2021.

4. Merchandise costing $82,500 shipped by a vendor f.o.b. destination on December 30, 2020, and received by Jones on January 4, 2021.

5. Merchandise costing $55,170 shipped by a vendor f.o.b. shipping point on December 31, 2020, and received by Jones on January 5, 2021.

Required - Based on the above information, calculate the amount that should appear on Jones's balance sheet at December 31, 2020, for inventory.

Question 4 - Crane Company took a physical inventory on December 31 and determined that goods costing $199,100 were on hand. Not included in the physical count were $24,470 of goods purchased from Pelzer Corporation, f.o.b. shipping point, and $21,670 of goods sold to Alvarez Company for $30,420, fo.b. destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Crane report as its December 31 inventory?