Determine amount of cost of goods sold and ending inventory

Assignment Help Financial Accounting

Reference no: EM131263404

Marley company sells drip coffee makers used in business offices. Its beginning inventory of coffee makers was 400 units at $50 each. During the year, Marley made two purchaases of coffee makers. The first purchase was 500 units at $70 per unit; the second was a 600-unit-purchase at $75 per unit. During the period Marley sold 1300 coffee makers at a price of $100. Due to the introduction of K cups in the last part of the year, the sales price of the drip coffee makers dropped to $75 and the replacement cost of drip coffee makers that Marley would buy in the future to $68.

Determine the amount of cost of goods sold and ending inventory, assuming that Marley uses:

a. FIFO

b. LIFO

c. Weighted Average

Perform the above calculations independent of the Lower of Cost or Market test. That is, the LCM adjustment (if any) will occur after you do the above calculations as to ending inventory and COGS.

Does the drop in the replacement cost of drip coffee makers impact the ending inventory valuation under any of the above three methods? If so, which method(s) and why? What would be your journal entry to record any such valuation writedown? Provide the debit and credit (and amounts) for any writedown entry(ies).

Reference no: EM131263404

Questions Cloud

Alternative policy options for controlling pesticides : Suppose the government of a municipality is trying to determine how to deal with pesticide contamination of its water supply. It wants to undertake a benefit-cost analysis of two alternative policy options for controlling pesticides:

Develop strategic objectives for new division of business : Develop the strategic objectives for your new division of the existing business in a balanced scorecard format in the context of key trends, assumptions, and risks.

Briefly describe the market options matrix : Briefly describe the growth-share matrix and discuss how an organization might use it to allocate resources.

Case of corporate responsibility : Bank of America cancelled their proposed $5 charge for the use of debit cards. Was this a case of corporate responsibility to their customers? Or was there some other motivation for the move?

Determine amount of cost of goods sold and ending inventory : Marley company sells drip coffee makers used in business offices. Its beginning inventory of coffee makers was 400 units at $50 each. During the year, Marley made two purchaases of coffee makers. The first purchase was 500 units at $70 per unit; the ..

Condition for making loans to the greek government : Why are austerity measures, insisted upon by the European Union as a condition for making loans to the Greek government not working?

Was abduls agreement a binding contract : Was Abdul's agreement a binding contract and can "CRISP LLC" claim 5,000 Oman Rials liquidated damages? Justify your answer.

Federal income tax expense-federal income tax payable : XYZ is a calendar year, accrual basis C corporation headquartered in St. Paul that provides advertising services to tour and travel companies. Assume that XYZ’s 2016 financial (book) income before tax is $2,000,000. Prepare the journal entry to recor..

Aggregate inverse demand curve for household pesticide : Let the aggregate inverse demand curve for household pesticide use be: P = 8 - .08Q, where A is tonnes of pesticide used by households per month. The marginal private costs (MPC) of pesticides is given by P = 2 + .04Q. Pesticide use leads to decli..

User Account

All Pages