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dem82 [27]
3 years ago
6

The inventory on hand at the end of 2019 for Reddall Company is valued at a cost of $94,000. The following items were not includ

ed in this inventory:
1. Purchased goods in transit, under terms FOB shipping point, invoice price $4,200, freight costs $200.
2. Goods out on consignment to Marlman Company, sales price $5,600, shipping costs of $200.
3. Goods sold to Grina Co. under terms FOB destination, invoiced for $1,900 which included $178 freight charges to deliver the goods. Goods are in transit.
4. Goods held on consignment by Reddall at a sales price of $2,700 which included sales commission of 20% of sales price.
5. Purchased goods in transit, shipped FOB destination, invoice price $2,100 which included freight charges of $190.

Required:
Determine the cost of the ending inventory that Reddall should report on its December 31, 2016, balance sheet, assuming that its selling price is 140% of the cost of the inventory.
Business
1 answer:
k0ka [10]3 years ago
7 0

Answer: $‭103,830‬

Explanation:

Ending Inventory = Inventory on hand + Purchased goods shipping point + Goods out on consignment + Goods sold FOB Destination

Selling price of goods is 140% cost of inventory so sales figures will have to be divided by 140% to get the inventory figure.

Purchased goods shipping point

= 4,200 + 200 = $4,400

Goods out on Consignment

= (5,600 / 140%) + 200 = $4,200

Goods sold FOB Destination

= (1,900 - 178) / 140% = $1,230

Ending Inventory

= 94,000 + 4,400 + 4,200 + 1,230

= $‭103,830‬

<em>Goods Purchased FOB Destination are not to be included as they are still the responsibility of the seller. Goods held on consignment should not be included either. </em>

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erastova [34]

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a.

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b.

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Explanation:

a.

The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.

The formula for WACC is,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

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