Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Inventory CostItems to Include in Inventory: The bookkeeper for Interior Advances Ltd. is uncertain which of the following items he should include when he calculates

Inventory CostItems to Include in Inventory: The bookkeeper for Interior Advances Ltd. is uncertain which of the following items he should include when he calculates the inventory balance for the year-end financial statements: a. Goods counted in the physical inventory, including $4,500 in sales taxes and

$1,500 in import brokerage fees

$30,000

b. Goods received and included in inventory count but not yet paid for; the cost includes a potential 2% cash discount if the invoice is paid within 30 days of year- end

6,000

c. Cost of general insurance coverage on inventory 2,000 d. Goods shipped to a wholesale distributor; the distributor has the right to return up to 50% of the goods if they are not sold within 6 months; not included in inventory count 8,000

e. Items included in inventory count that have been returned by customers for repair (counted at original sales price, which was 50% above cost) 3,000

f. Cost of goods on consignment at Big Box Inc. (including 25% commission that will be paid to Big Box when it sells the goods) 10,000

g. Total expected cost of goods in inventory that are being modified by the company for private-branding for Canada Designs Limited; 60% of the cost has been incurred by year-end 12,000

Required: Determine the amount of ending inventory that should be reported on Interior Advances SFP.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting A Global Perspective

Authors: Herve Stolowy, Yuan Ding, Luc Paugam

6th Edition

147376730X, 9781473767300

More Books

Students also viewed these Accounting questions