Hello, I need the correction of this exercise so i can check my answers. thank you
BUSINESS CASE (100 points) Jim has recently opened a snack food wholesale company dedicated to the sale of peanuts, almonds and pistachios. During its first month of activity, the company has made the following transactions: was Kg Price per Kg Amount February 2: Purchase of Pistachios: 2300 $12 $27,600 Purchase of Almonds: 4000 $6 $24,000 Purchase of Peanuts: 4000 $4 $16,000 resou February 3: Purchase of Pistachios: 1500 $14 $21,000 Purchase of Almonds: 1500 $7 $10,500 Purchas of Peanuts: 2500 $5 $12,500 February 6: Sold to several clients: ud Pistachios: 1900 Hero.c $21 $39,900 Almonds: s stu 2500 $12 $30,000 Peanuts: 2500 $10 $25,000 February 6: Sold to Fruits Lovers Inc.: ursel This study source was downloaded by 100000828293759 from CourseHero.com on 07-12-2021 09:13:44 GMT -05:00Pistachios: 500 321 $10,500 Almonds: 750 513 $9,750 Peanuts: 1500 $9 $13,500 February 12 Purchase of Pistachios: 1350 515 520.250 Purchase of almonds: 3000 $8 $24,000 February 13: Sale of peanuts to Peanuts Lovers Inc.: 3250 $9 $29,250 February 14: Purchase of Peanuts 2000 $5 $10,000 Besides these transactions, the company has had the following expenses: Salaries: $3,750 Electricity bill: $400 Renting of equipment: $1,500 Rent of warehouse and office: $3,250 Miscellaneous: $1,250 Jim's accountant recommended that he should use the average cost method in order to determine the cost of the inventory sold but he is not sure about the consequences it may have on his nancial situation. 1: Why in your opinion did Jim's accountant recommend the average cost method and what difference is there with the three other methods? Explain the main characteristics of each method of valuation of the inventory and the consequences they may have on the valuation of the inventory and determination ofthe net income in case of price fluctuation. (20 points} 2: Prepare an Income statement of the company at the end of February using as method of valuation of the inventory the average cost method, FIFO and UFO for each one of the products sold by Jim, and calculate the balance of the inventory at the end of the month. Explain the calculations. (40 points: 30 points for the calculation and 10 for explanations) 3: In order to compare with the records made by his accountant, Jim asks you to prepare the different jou rnal entries for the purchases and sales mentioned above for each one of the 3 different methods used above. (20 points) 4: Jim would like to know a forecast of the number of days to sell the inventory based on the results of the month of February. Explain your calculation and the steps followed. (20 points: 10 for calculation and 10 for explanation) Rubrics The student demonstrates an excellent understanding of the concepts. The student demonstrates a good understanding of the concepts. The student demonstrates a fair understanding of the concepts. The student demonstrates some, but insufficient understanding of the concepts. 3-5.9 The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although it is
