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3 years ago

Which industry is least likely to use the process costing method?

1 answer:

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One example of a company that will least likely use a process costing system is a company that is in charged or associated with a home builder. It is because a process costing system is a method that is responsible in handling cost in a way that it is collected and assigned by which a home builder does not usually use.

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At the beginning of the current season on April 1, the ledger of Sandhill Pro Shop showed Cash $2,950; Inventory $3,500; and Com

MA_775_DIABLO [31]

Answer:

Sandhill Pro Shop

Journal Entries:

Apr. 5: Debit Inventory $2,500

Credit Accounts Payable (Arnie Co.) $2,500

To record the purchase of goods on account, terms 2/10, n/60.

Apr. 7: Debit Freight-in $80

Credit Cash $80

To record the payment for freight on goods.

Apr. 9: Debit Accounts Payable (Arnie Co.) $700

Credit Inventory $700

To record the return of goods on account.

Apr. 10: Debit Accounts Receivable $1,340

Credit Sales Revenue $1,340

To record the sale of goods on account, terms n/30.

Debit Cost of goods sold $920

Credit Inventory $920

To record the cost of goods sold.

Apr. 12: Debit Inventory $1,050

Credit Accounts Payable (Woods Sportswear) $1,050

To record the purchase of goods on account, terms 2/10, n/30.

Apr. 14: Debit Accounts Payable (Arnie Co.) $1,800

Credit Cash $1,764

Credit Cash Discounts $36

To record the full settlement on account.

Apr. 17: Debit Accounts Payable (Woods Sportswear) $50

Credit Inventory $50

To record the return of goods on account.

Apr. 20: Debit Accounts Receivable (Members) $910

Credit Sales Revenue $910, terms n/30.

To record the sale of goods to members.

Debit Cost of goods sold $550

Credit Inventory $550

To record the cost of goods sold.

Apr. 21: Debit Accounts Payable (Woods Sportswear) $1,000

Credit Cash $980

Credit Cash Discounts $20

To record full settlement on account.

Apr. 27: Debit Sales Allowances $70

Credit Accounts Receivable (Members) $70

To record the sales allowances granted members for improperly fit clothing.

Apr. 30: Debit Cash $1,400

Credit Accounts Receivable (Members) $1,400

To record the receipt of cash from members on account.

Explanation:

a) Data and Analysis:

Apr. 5: Inventory $2,500 Accounts Payable (Arnie Co.) $2,500, terms 2/10, n/60.

Apr. 7: Freight-in $80 Cash $80

Apr. 9: Accounts Payable (Arnie Co.) $700 Inventory $700

Apr. 10: Accounts Receivable $1,340 Sales Revenue $1,340, terms n/30.

Cost of goods sold $920 Inventory $920

Apr. 12: Inventory $1,050 Accounts Payable (Woods Sportswear) $1,050, terms 2/10, n/30.

Apr. 14: Accounts Payable (Arnie Co.) $1,800 Cash $1,764 Cash Discounts $36

Apr. 17: Accounts Payable (Woods Sportswear) $50 Inventory $50

Apr. 20: Accounts Receivable $910 Sales Revenue $910, terms n/30.

Cost of goods sold $550 Inventory $550

Apr. 21: Accounts Payable (Woods Sportswear) $1,000 Cash $980 Cash Discounts $20

Apr. 27: Sales Allowances $70 Accounts Receivable $70

Apr. 30: Cash $1,400 Accounts Receivable (Members) $1,400

3 0

3 years ago

R. J. Graziano Wholesale Corp. uses the LIFO method of inventory costing. In the current year, profit at R. J. Graziano is runni

Nata [24]

Answer:

a. What is the effect of this transaction on this year's and next year's income statement and income tax expense? Why?

The inventory account is a permanent asset account in the balance sheet, so it doesn't matter if the company purchases all that it can during the last days of December, it will not affect the income statement, nor their tax liability for the current year. A company only recognizes cost of goods sold when the goods are actually sold, not when they are purchased.

Since the company uses the LIFO (last in, first out) inventory method, all it will do is increase the value of ending inventory which changes into beginning inventory next year. You can reduce next year's income more by purchasing the goods next year.

b. If R. J. Graziano Wholesale had been using the FIFO method of inventory costing, would the president give the same directive?

If the company used the FIFO method, the result will be the same. Inventory is not COGS, whether you use FIFO, LIFO weighted average, specific identification, or any other acronym that you might come up with. At beginning of the year, inventory must be average to determine beginning inventory. it might help to increase COGS a little, therefore, decreasing net income, but the effects shouldn't be significant.

c. Should the plant accountant order the inventory purchase to lower income? What are the ethical implications of this order?

It is useless, and he should know it. The only implication is that this will help him realize his low IQ.

6 0

3 years ago

In the current year, Oriole Corporation donated a painting worth $30,000 to the Texas Art Museum, a qualified charity. The museu

n200080 [17]

Answer:

$30,000

Explanation:

Oriole Corporation purchased the painting five years ago for $10,000. In the current year, the cost of the same painting is $30,000. Oriole Corporation donated this painting to the Texas Art Museum.

So, Oriole’s charitable contribution deduction is <u>$30,000</u> as the current value of the painting is $30,000.

6 0

3 years ago

Which journal entry below would be properly used to record an issuance of an installment note (borrowing money) from first bank

Drupady [299]

Principal of the note

8 0

3 years ago

Suppose you purchase five put contracts on Testaburger Co. The strike price is $45, and the premium is $3. If, at expiration, th

andriy [413]

Answer:

3000

1500

Explanation:

For each of the answers in this question I have added the formulas to solve them in the attachment below

(45-39)*5*100

= 3000

(45-39)-3 x5 x100

= $1500

7 0

3 years ago