accounting 498526

Aug 29, 2021 | Uncategorized

1)

Walberg Associates, antique dealers, purchased the contents of an estate for $38,700. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates’ warehouse was $1,800. Walberg Associates insured the shipment at a cost of $270. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of $610.

Determine the cost of the inventory acquired from the estate

2)

Laker Company reported the following January purchases and sales data for its only product.
Date Activities Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory 160 units @ $7.20 = $ 1,152
Jan. 10 Sales 95 units @$15.20
Jan. 20 Purchase 230 units @ $6.20 = 1,426
Jan. 25 Sales 155 units @$15.20
Jan. 30 Purchase 100 units @ $5.20 = 520
Totals 490 units $ 3,098 250 units

Laker uses a perpetual inventory system. For specific identification, ending inventory consists of 240 units, where 100 are from the January 30 purchase, 80 are from the January 20 purchase, and 60 are from beginning inventory.
1.

Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,700, and that the applicable income tax rate is 35%. (Do not round your Intermediate calculations.)
2.

Which method yields the highest net income?
FIFO
Specific identification
LIFO
Weighted average
3.

Does net income using weighted average fall between that using FIFO and LIFO?
Yes
No
4.

If costs were rising instead of falling, which method would yield the highest net income?
Weighted average
FIFO
LIFO
Specific identification