Sampson Seadoos manufactures state-of-the-art seadoos.In 2015,the company's accountant recorded the following costs into the inventory account:

The company had no work in process at the end of both 2014 and 2015.Finished goods at the end of 2014 amounted to 8,000 seadoos at $900/seadoo.Production was 13,453 seadoos and 4,000 seadoos remained in inventory at December 31,2015.The company uses a periodic inventory system and the FIFO cost flow assumption.
Required:
a.Of the $14,080,000,how much should have been capitalized into inventories?
b.Compute the ending value of inventory and the cost of goods sold for 2015.
c.If the error in inventory costing had not been corrected as per part (a),by how much would inventory be overstated at the end of 2015?
d.Record the journal entry to correct the error in inventory costing.
e.If the company uses the weighted-average cost method,how much would be the ending value of inventory and cost of goods sold for 2015?

Question

Sampson Seadoos manufactures state-of-the-art seadoos.In 2015,the company's accountant recorded the following costs into the inventory account:
  
The company had no work in process at the end of both 2014 and 2015.Finished goods at the end of 2014 amounted to 8,000 seadoos at $900/seadoo.Production was 13,453 seadoos and 4,000 seadoos remained in inventory at December 31,2015.The company uses a periodic inventory system and the FIFO cost flow assumption.
Required:
a.Of the $14,080,000,how much should have been capitalized into inventories?
b.Compute the ending value of inventory and the cost of goods sold for 2015.
c.If the error in inventory costing had not been corrected as per part (a),by how much would inventory be overstated at the end of 2015?
d.Record the journal entry to correct the error in inventory costing.
e.If the company uses the weighted-average cost method,how much would be the ending value of inventory and cost of goods sold for 2015?

Quizplus · Accepted Answer

The Answer of Sampson Seadoos manufactures state-of-the-art seadoos.In 2015,the company's accountant recorded the following costs into the inventory account:
  
The company had no work in process at the end of both 2014 and 2015.Finished goods at the end of 2014 amounted to 8,000 seadoos at $900/seadoo.Production was 13,453 seadoos and 4,000 seadoos remained in inventory at December 31,2015.The company uses a periodic inventory system and the FIFO cost flow assumption.
Required:
a.Of the $14,080,000,how much should have been capitalized into inventories?
b.Compute the ending value of inventory and the cost of goods sold for 2015.
c.If the error in inventory costing had not been corrected as per part (a),by how much would inventory be overstated at the end of 2015?
d.Record the journal entry to correct the error in inventory costing.
e.If the company uses the weighted-average cost method,how much would be the ending value of inventory and cost of goods sold for 2015?

Sampson Seadoos Manufactures State-Of-The-Art Seadoos