Sampson Jet Skis manufactures state-of-the-art jet skis.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 jet skis at $900/jet ski.Production was 13,453 jet skis and 4,000 jet skis 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 Jet Skis manufactures state-of-the-art jet skis.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 jet skis at $900/jet ski.Production was 13,453 jet skis and 4,000 jet skis 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 Jet Skis manufactures state-of-the-art jet skis.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 jet skis at $900/jet ski.Production was 13,453 jet skis and 4,000 jet skis 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 Jet Skis Manufactures State-Of-The-Art Jet Skis