1. A inc uses the LIFO cost flow assumption to value inventory. Inventory for A on 1/2/2001 was 100 units at a LIFO cost of $ 25/unit. During the first quarter of 2001, 200 units were purchased costing an average of $ 40 per unit, and sales of 265 units at a retail price of $ 50 per unit were made. Assuming A expects to replace the units of beginning inventory sold before year-end at a cost of $41, what is the amount of cost of good sold for the quarter ended 3/31/2001.

What is the correct journal entry to record COGS at the end of the first quarter? Show steps

Answer: Dr cost of good sold 9625

Dr excess of replacement cost over historical cost of LIFO liquidation 1040

Cr inventory 10665

2. A purchases raw material from its foreign supplier B on May 8, payment of 2000000foreign curenct units FC is due in 30 days. May 31 is A s fiscal year-end. The pertinent exchange rate were as followes:

May 8 spot rate $1.25

May 31 spot rate 1.26

Jun 7 1.20

For what amount should A account payable be credited on May 8? Show steps

How much foreign exchange gain or loss should A record on May 31? show sheps

Answers: 2500000 and 20000 loss