You are provided with the following information for Amelia Inc., which purchases its inventory from a supplier
Question:
You are provided with the following information for Amelia Inc., which purchases its inventory from a supplier for cash and has only cash sales. Amelia uses the average cost method in a perpetual inventory system. Increased competition has recently reduced the price of the product.
Instructions
(a) Prepare all journal entries for the month of April for Amelia, the buyer. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
(b) Determine the ending inventory amount for Amelia.
(c) On April 30, Amelia learns that the product has a net realizable value of $5 per unit. What amount should ending inventory be valued at on the April statement of financial position?
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine