Reference no: EM132840559

Questions -

Q1. Hans Company has 2 items that are under evaluation for possible year-end adjustments. First is the purchase with supplier invoice dated December 30, 2021 - $120,000. This was shipped FOB shipping point, freight prepaid. The freight costs $5,000. The purchase was recorded but the freight was not. Second is the purchase return of $20,000 which was made but not recorded. If the correct ending inventory is $200,000 and the cost of goods sold before adjustments is $5,000,000, what is the correct amount of cost of goods available for sale?

Q2. Tulips Company owned 50,000 shares of another Pam Company. These 50,000 shares have an original price of $100 per share. The investee distributed 50,000 rights to Tulips Company. Tulips Company was entitled to buy one new share for $140 and five of these rights. Each share had a market value of $150 and each right had market value of $10 on the date of issuance. Tulips Company exercised all rights. The share rights are accounted for separately and measured initially at fair value. How much should be recorded for the new shares that are acquired by exercising the rights?