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Pie
3 years ago
11

Lemon company purchased 100 units for $20 each on January 31. It purchased 200 units for $30 each on February 28. It sold 200 un

its for $50 each from March 1 through December 31. If the company uses the first-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31?
A. ​$6,350.
B. ​$4,350.
C. ​$1,600.
D. ​$4,750.
Business
1 answer:
Natali [406]3 years ago
4 0

Answer:

Find detailed explanations below

Explanation:

Under the first-in-first-out inventory valuation method, the earlier stocks are sold first and the latest stocks remain in inventory.

In essence, the 200 units sold comprise of 100 units purchased on January 31  at $20 each  and 100 units from purchases made on February 28 at $30 each as computed below

Cost of goods sold=(100*$20)+(100*$30)

Cost of goods sold=$5,000(the options are wrong)

The correct question for the options is provided below:

A company purchased 80 units for​ $20 each on January 31. It purchased 190 units for​ $25 each on February 28. It sold 190 units for​ $80 each from March 1 through December 31. If the company uses the​ first-in, first-out inventory costing​ method, what is the amount of Cost of Goods Sold on the income statement for the year ending December​ 31? (Assume that the company uses a perpetual inventory​ system.)

A.

​$6,350

B.

​$4,350

C.

​$1,600

D.

​$4,750

Cost of goods sold=(80*$20)+(110*$25)

Cost of goods sold=$4,350

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Using the following end-of-year information, calculate the number of days' sales in receivables for Year 2.
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Answer:

The number of days' sales in receivables for Year 2 is 48.7

Explanation:

The formula that is applicable to this scenario is the accounts receivable divided by sales multiplied by 365 days

The number of days' sales in receivables=$11,000/$82,500*365=48.67  

The correct option is D, since the 48.67 was simply rounded down to one decimal place.

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3 years ago
Muffin’s Masonry, Inc.’s, balance sheet lists net fixed assets as $18.00 million. The fixed assets could currently be sold for $
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Answer:

                                     Book Value                          Market Value

Current Assets              $14 m                                        $14.95 m

Fixed Assets                  $18 m                                        $27 m

Total                               $32 m                                        $41.95 m

Explanation:

For book Value:

Net fixed assets=$18.00 million

Current Liabilities=$7.50 million

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Net working capital=Current assets-Current Liabilities

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Current Assets=$14 million

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For Market Value:

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Net working capital=Current assets-Current Liabilities

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Current Assets=$7.45+$7.50

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                                     Book Value                          Market Value

Current Assets              $14 m                                        $14.95 m

Fixed Assets                  $18 m                                        $27 m

Total                               $32 m                                        $41.95 m

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