Nama : Lafidan Rizata Febiola

NIM : 041711333237 - 5
Kelas : M

BE – 8.1
Included in the December 31 trial balance of Rivera A. Ş are the following assets.
Cash £ 190,000 Work in process £ 200,000
Equipment (net) 1,100,000 Accounts receivable (net) 400,000
Prepaid insurance 41,000 Patents 110,000
Raw materials 335,000 Finished goods 170,000

Prepare the current assets section of the December 31 statement of financial position.

Answer:
Rivera A. Company
Balance Sheet (Partial)
December 31
Current Assets
Inventories
Finish goods …………………………………... £ 170,000
Work in process ………………...…………….. 200,000
Raw materials ……………………………...…. 335,000 £ 705,000
Prepaid Insurance …………………………………… 41,000
Receivables (net) ……………………………………. 400,000
Cash …………………………………………………. 190,000
Total current assets …………………………… £ 1,336,000

BE – 8.2
Matlock SE uses a perpetual inventory system. Its beginning inventory consists of 50 units that
cost €34 each. During June, the company purchased 150 units at €34 each, returned 6 units for
credit, and sold 125 units at €50 each. Journalize the June transactions.

Answer:
Inventory (150 X €34).................................................................. 5,100
Accounts Payable.................................................................... 5,100
Accounts Payable (6 X €34) ........................................................ 204
Inventory................................................................................. 204
Accounts Receivable (125 X €50)................................................ 6,250
Sales........................................................................................ 6,250
Cost of Goods Sold (125 X €34).................................................. 4,250
Inventory................................................................................. 4,250

BE – 8.3
Obihiro Ltd. has the following information related to its inventory of embroidered baseball caps:
purchase price, ¥45,000,000; import duties, ¥375,000; interest costs on inventory loan, ¥520,000;
and transportation costs, ¥125,000. Determine the cost of the Obihiro inventory.

Answer:
Purchase Price………….………………………………………………. ¥ 45,000,000
Import Duties……………………………………………………...…… 375,000
Transportation Costs…………………………..….................................. 125,000
Cost of inventory………………………………………………………. ¥ 45,500,000
BE – 8.4
Jakarta Ltd. uses a periodic inventory system. For June, when the company sold 600 units, the
following information is available. Units Unit Cost Total Cost
Units Unit Cost Total Cost
June 1 inventory 150 € 5 € 750
June 15 purchase 600 6 3,600
June 23 purchase 400 8 3,200
1,150 € 7,750
Compute the June 30 inventory and the June cost of goods sold using the average – cost method.
(Round unit costs to two decimal points.)

Answer:
£ 7,550 £ 6.57
Weighted average cost per unit =
1,150
Ending inventory 550 X €6.57 = £ 3,614

Cost of goods available for sale £ 7,550

Deduct ending inventory 3,614
Cost of goods sold £ 3,936

BE – 8.5
Data for Jakarta Ltd. are presented in BE8.4. Compute the June 30 inventory and the June cost of
goods sold using the FIFO method.

Answer:
Ending inventory 400 x £8 = £ 3,200
June 23 150 x £6 = £ 900
4,100

Cost of goods available for sale £ 7,550

Deduct ending inventory 4,100
Cost of goods sold £ 3,450

BE – 8.6
Amsterdam Company uses a periodic inventory system. For April, when the company sold 600
units, the following information is available.
Units Unit Cost Total Cost
April 1 inventory 250 $ 10 $ 2,500
April 15 purchase 400 12 4,800
April 23 purchase 350 13 4,550
1,000 $ 11,850

Compute the April 30 inventory and the April cost of goods sold using the average – cost
method.

Answer:
$ 11,850 $ 11.85
Weighted average cost per unit =
1,000
Ending inventory 400 X $ 11.85 = $ 4,740

Cost of goods available for sale $ 11,850

Deduct ending inventory (4,740)
Cost of goods sold 600 X 11.85 $ 7,110
BE – 8.7
Data for Amsterdam Company are presented in BE8.6. Compute the April 30 inventory and the
April cost of goods sold using the FIFO method.

Answer:
April 23 350 X $13 $ 4,550
April 25 50 X $12 $ 600
Ending Inventory $ 5,150

Cost of goods available for sale $ 11,850

Deduct ending inventory 5,150
Cost of goods sold 600 X 11.85 $ 6,700

BE – 8.8
Bienvenu Enterprises reported cost of goods sold for 2019 of $1,400,000 and retained earnings
of $5,200,000 at December 31, 2019. Bienvenu later discovered that its ending inventories at
December 31, 2018 and 2019, were overstated by $110,000 and $35,000, respectively.
Determine the corrected amounts for 2019 cost of goods sold and December 31, 2019, retained
earnings.

Answer:
Cost of goods sold as reported………………………………………. $ 1,400,000
Overstatement of 12/31/09 inventory……………………………….. (110,000)
Overstatement of 12/31/10 inventory……………………………….. 35,000
Corrected cost of goods sold………………………………………... $ 1,325,000

12/31/10 retained earnings as reported……………………………… $ 5,200,000

Overstatement of 12/31/10 inventory……………………………….. (35,000)
Corrected 12/31/10 retained earnings……………………………….. $ 5,165,000

BE – 8.9
Stallman Company took a physical inventory on December 31 and determined that goods costing
$200,000 were on hand. Not included in the physical count were $25,000 of goods purchased
from Pelzer Corporation, f.o.b. shipping point, and $22,000 of goods sold to Alvarez Company
for $30,000, f.o.b. destination. Both the Pelzer purchase and the Alvarez sale were in transit at
yearend. What amount should Stallman report as its December 31 inventory?

Answer:
December 31 inventory per physical count………….…………………. $ 200,000
Goods-in-transit purchased FOB shipping point……………………….. 25,000
Goods-in-transit sold FOB destination……………………………..…... 22,000
December 31 inventory…………………………………………... $ 247,000
E – 8.1
Presented below is a list of items that may or may not be reported as inventory in a company's
December 31 statement of financial position.
1. Goods sold on an installment basis (bad debts can be reasonably estimated).
2. Goods out on consignment at another company's store.
3. Goods purchased f.o.b. shipping point that are in transit at December 31.
4. Goods purchased f.o.b. destination that are in transit at December 31.
5. Goods sold to another company, for which our company has signed an agreement to
repurchase at a set price that covers all costs related to the inventory.
6. Goods sold where large returns are predictable.
7. Goods sold f.o.b. shipping point that are in transit at December 31.
8. Freight charges on goods purchased.
9. Interest costs incurred for inventories that are routinely manufactured.
10. Materials on hand not yet placed into production by a manufacturing firm.
11. Costs incurred to advertise goods held for resale.
12. Office supplies.
13. Raw materials on which a manufacturing firm has started production but which are not
completely processed.
14. Factory supplies.
15. Goods held on consignment from another company.
16. Costs identified with units completed by a manufacturing firm but not yet sold.
17. Goods sold f.o.b. destination that are in transit at December 31.
18. Short-term investments in shares and bonds that will be resold in the near future.
Instructions
Indicate which of these items would typically be reported as inventory in the financial
statements. If an item should not be reported as inventory, indicate how it should be reported in
the financial statements.

Answer:
Items 2, 3, 5, 8, 10, 13, 14, 16, and 17 would be reported as inventory in the financial
statements.

The following items would not be reported as inventory:

1. Cost of goods sold in the income statement.

4. Not reported in the financial statements.
6. Cost of goods sold in the income statement.
7. Cost of goods sold in the income statement.
9. Interest expense in the income statement.
11. Advertising expense in the income statement.
12. Office supplies in the current assets section of the statement of financial position.
15. Not reported in the financial statements.
18. Short-term investments in the current asset section of the statement of financial position.

E – 8.2
In your audit of Garza Company, you find that a physical inventory on December 31, 2019,
showed merchandise with a cost of $441,000 was on hand at that date. You also discover the
following items were all excluded from the $441,000.
1. Merchandise of $61,000 which is held by Garza on consignment. The consignor is the
Bontemps Company.
2. Merchandise costing $33,000 which was shipped by Garza f.o.b. destination to a
customer on December 31, 2019. The customer was expected to receive the merchandise
on January 6, 2020.
 3. Merchandise costing $46,000 which was shipped by Garza f.o.b. shipping point to a
customer on December 29, 2019. The customer was scheduled to receive the merchandise
on January 2, 2020.
4. Merchandise costing $73,000 shipped by a vendor f.o.b. destination on December 30,
2019, and received by Garza on January 4, 2020.
5. Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on December 31,
2019, and received by Garza on January 5, 2020.
Instructions
Based on the above information, calculate the amount that should appear on Garza's statement of
financial position at December 31, 2019, for inventory.

Answer:
Inventory per physical count………….…………………………..……. $ 441,000
Goods-in-transit to customer, f.o.b. destination………….…………….. +33,000
Goods-in-transit from vendor, f.o.b. shipping point……………………. +51,000
Inventory to be reported on balance sheet……...…………………..…... $ 525,000

Note:
The consigned goods of $61,000 are not owned by Garza and were properly excluded.

The goods in transit to a customer of $46,000, shipped f.o.b. shipping point, are properly
excluded from the inventory because the title to the goods passed when they left the seller
(Oliva) and therefore a sale and related cost of goods sold should be recorded in 2010.

The goods in transit from a vendor of $73,000, shipped f.o.b. destination, are properly
excluded from the inventory because the title to the goods does not pass to Garza until the
buyer (Garza) receives them.

E – 8.3
Assume that in an annual audit of Webber AG at December 31, 2019, you find the following
transactions near the closing date.
1. A special machine, fabricated to order for a customer, was finished and specifically
segregated in the back part of the shipping room on December 31, 2019. The customer
was billed on that date and the machine excluded from inventory although it was shipped
on January 4, 2020.
2. Merchandise costing €2,800 was received on January 3, 2020, and the related purchase
invoice recorded January 5. The invoice showed the shipment was made on December
29, 2019, f.o.b. destination.
3. A packing case containing a product costing €3,400 was standing in the shipping room
when the physical inventory was taken. It was not included in the inventory because it
was marked “Hold for shipping instructions.” Your investigation revealed that the
customer's order was dated December 18, 2019, but that the case was shipped and the
customer billed on January 10, 2020. The product was a stock item of your client.
4. Merchandise costing €720 was received on December 28, 2019, and the invoice was not
recorded. You located it in the hands of the purchasing agent; it was marked “on
consignment.”
5. Merchandise received on January 6, 2020, costing €680 was entered in the purchase
journal on January 7, 2020. The invoice showed shipment was made f.o.b. supplier's
warehouse on December 31, 2019. Because it was not on hand at December 31, it was
not included in inventory.
Instructions
Assuming that each of the amounts is material, state whether the merchandise should be included
in the client's inventory, and give your reason for your decision on each item.
Answer:
1. Include. Merchandise passes to customer only when it is shipped.
2. Do not include. Title did not pass until January 3.
3. Include in inventory. Product belonged to Webber Inc. at December 31, 2010.
4. Do not include. Goods received on consignment remain the property of the consignor.
5. Include in inventory. Under invoice terms, title passed when goods were shipped.

E – 8.4
Bradford Machine plc maintains a general ledger account for each class of inventory, debiting
such accounts for increases during the period and crediting them for decreases. The transactions
below relate to the Raw Materials inventory account, which is debited for materials purchased
and credited for materials requisitioned for use.
1. An invoice for £8,100, terms f.o.b. destination, was received and entered January 2, 2020.
The receiving report shows that the materials were received December 28, 2019.
2. Materials costing £7,300 were returned to the supplier on December 29, 2019, and were
shipped f.o.b. shipping point. The return was entered on that date, even though the
materials are not expected to reach the supplier's place of business until January 6, 2020.
3. Materials costing £28,000, shipped f.o.b. destination, were not entered by December 31,
2019, “because they were in a railroad car on the company's siding on that date and had
not been unloaded.”
4. An invoice for £7,500, terms f.o.b. shipping point, was received and entered December
30, 2019. The receiving report shows that the materials were received January 4, 2020,
and the bill of lading shows that they were shipped January 2, 2020.
5. Materials costing £19,800 were received December 30, 2019, but no entry was made for
them because “they were ordered with a specified delivery of no earlier than January 10,
2020.”
Instructions
Prepare correcting general journal entries required at December 31, 2019, assuming that the
books have not been closed.

Answer:
1. Raw Materials Inventory............................................... 8,100
Accounts Payable............................................... 8,100

2. No adjustment necessary.

3. Raw Materials Inventory............................................... 28,000

Accounts Payable............................................... 28,000

4. Accounts Payable.......................................................... 7,500

Raw Materials Inventory.................................... 7,500

5. Raw Materials Inventory............................................... 19,800

Accounts Payable............................................... 19,800

E – 8.5
Two or more items are omitted in each of the tabulations of income statement data shown below
2018 2019 2020
Sales revenue £290,000 …….. £ 4 10,000
Sales returns and allowances 6,000 13,000 ……..
Net sales …….. 347,000 ……..
Beginning inventory 20,000 32,000 ……..
 Ending inventory …….. …….. ……..
Purchases …….. 260,000 298,000
Purchase returns and allowances 5,000 8,000 10,000
Freight-in 8,000 9,000 12,000
Cost of goods sold 238,000 …….. 303,000
Gross profit on sales 46,000 91,000 97,000

Instructions
Fill in the amounts that are missing.

Answer:
20018 2019 2020
Sales............................................................................. £ 290,000 £ 360,000 £ 410,000
Sales Returns............................................................... 6,000 13,000 10,000
Net Sales...................................................................... 284,000 347,000 400,000
Beginning Inventory.................................................... 20,000 32,000 37,000
Ending Inventory......................................................... 32,000 37,000 34,000
Purchases..................................................................... 247,000 260,000 298,000
Purchase Returns and Allowances.............................. 5,000 8,000 10,000
Transportation-in......................................................... 8,000 9,000 12,000
Cost of Good Sold....................................................... 238,000 256,000 303,000
Gross Profit on Sales................................................... 46,000 91,000 97,000

E – 8.6
Presented below are transactions related to Guillen, Ltd.
May 10 Purchased goods billed at £20,000 subject to cash discount terms of 2/10, n/60.
11 Purchased goods billed at £15,000 subject to terms of 1/15, n/30.
19 Paid invoice of May 10.
24 Purchased goods billed at £11,500 subject to cash discount terms of 2/10, n/30.

Instructions
a. Prepare general journal entries for the transactions above under the assumption that
purchases are to be recorded at net amounts after cash discounts and that discounts lost
are to be treated as financial expense.
b. Assuming no purchase or payment transactions other than those given above, prepare the
adjusting entry required on May 31 if financial statements are to be prepared as of that
date.

Answer:
(a) May 10 Purchases...................................................................... 19,600
Accounts Payable (£20,000 × 0.98) .................. 19,600
11 Purchases...................................................................... 14,850
Accounts Payable (£15,000 × 0.99) .................. 14,850
19 Accounts Payable......................................................... 19,600
Cash.................................................................. 19,600
24 Purchases...................................................................... 11,270
Accounts Payable (£11,500 × 0.98) .................. 11,270

(b) May 31 Purchase Discounts Lost............................................ 150

Accounts Payable (£15,000 × 0.01) .............. 150
(Discount lost on purchase of May 11, £15,000, terms 1/15, n/30)
E – 8.7
Ohno Industries purchased ¥12,000 of merchandise on February 1, 2019, subject to a trade
discount of 10% and with credit terms of 3/15, n/60. It returned ¥3,000 (gross price before trade
or cash discount) on February 4. The invoice was paid on February 13. (All amounts in
thousands.)
Instructions
a. Assuming that Ohno uses the perpetual method for recording merchandise transactions,
record the purchase, return, and payment using the gross method.
b. Assuming that Ohno uses the periodic method for recording merchandise transactions,
record the purchase, return, and payment using the gross method.
c. At what amount would the purchase on February 1 be recorded if the net method were
used?
Answer:
(a) Feb 1 Inventory [¥12,000 – (¥12,000 × 10%)]........................... 10,800
Accounts Payable……………………………… 10,800
4 Accounts Payable [¥3,000 – (¥3,000 × 10%)] ................. 2,700
Inventory ............................................................ 2,700
13 Accounts Payable (¥10,800 – ¥2,700).............................. 8,100
Inventory (3% × ¥8,100) .................................... 243
Cash……………………………………………. 7,857

(b) Feb 1 Purchases [¥12,000 – (¥12,000 × 10%)]........................... 10,800

Accounts Payable……………………………… 10,800
4 Accounts Payable [¥3,000 – (¥3,000 × 10%)] ................. 2,700
Purchase Returns and Allowances……………... 2,700
13 Accounts Payable (¥10,800 – ¥2,700).............................. 8,100
Purchase Discount (3% × ¥8,100) ...................... 243
Cash……………………………………………. 7,857

(c) Purchase price (list)............................................................................. ¥ 12,000

Less: Trade discount (10% X ¥12,000)............................................... 1,200
Price on which cash discount based.................................................... 10,800
Less: Cash discount (3% X ¥10,800).................................................. 324
Net price.............................................................................................. ¥ 10,476

E – 8.8
Chippewas Company sells one product. Presented below is information for January for
Chippewas Company.
Jan. 1 Inventory 100 units at $6 each
4 Sale 80 units at $8 each
11 Purchase 150 units at $6.50 each
13 Sale 120 units at $8.75 each
20 Purchase 160 units at $7 each
27 Sale 100 units at $9 each

Chippewas uses the FIFO cost flow assumption. All purchases and sales are on account.
Instructions
a. Assume Chippewas uses a periodic system. Prepare all necessary journal entries,
including the end-of-month closing entry, to record cost of goods sold. A physical count
indicates that the ending inventory for January is 110 units.
b. Compute gross profit using the periodic system.
c. Assume Chippewas uses a perpetual system. Prepare all necessary journal entries.
d. Compute gross profit using the perpetual system.
Answer:
(a) Jan 4 Accounts Receivable......................................................... 640
Sales (80 × $8)…………………………….…… 640
11 Purchases ($150 × $6.50)................................................. 975
Accounts Payable ............................................... 975
13 Accounts Receivable……………………………………. 1,050
Sales (120 × $8.75).............................................. 1,050
20 Purchases (160 × $7)......................................................... 1,120
Accounts Payable................................................ 1,120
27 Accounts Receivable......................................................... 900
Sales (100 × $9)................................................... 900
31 Inventory ($7 × 110)......................................................... 770
Cost of Goods Sold........................................................... *1,925
Purchases ($975 + $1,120).................................. 2,095
Inventory (100 × $6)............................................ 600
*($600 + $2,095 – $770)

(b) Sales ($640 + $1,050 + $900)....................... $ 2,590

Cost of goods sold......................................... 1,925
Gross profit...................................................... $ 665

(c) Jan 4 Accounts Receivable......................................................... 640

Sales (80 × $8)…………………………….…… 640
Cost of Goods Sold........................................................... 480
Inventory (80 × $6).............................................. 480
11 Inventory…....................................................................... 975
Accounts Payable (150 × $6.50) ........................ 975
13 Accounts Receivable……………………………………. 1,050
Sales (120 × $8.75).............................................. 1,050
Cost of Goods Sold........................................................... 770
Inventory ([(20 × $6) + (100 × $6.50)]............... 770
20 Inventory…………………................................................ 1,120
Accounts Payable (160 × $7)............................... 1,120
27 Accounts Receivable......................................................... 900
Sales (100 × $9)................................................... 900
Cost of Goods Sold........................................................... 675
Inventory [(50 × $6.50) + (50 × $7)]………....... 675

(d) Sales ………………………………………………………………….. $ 2,590

Cost of goods sold ($480 + $770 + $675).............................................. (1,925)
Gross profit............................................................................................. $ 665
E – 8.9
LoBianco Company's record of transactions for the month of April was as follows.
Purchases Sales
April, 1 (balance on hand) 600 @ $6.00 April, 3 500 @ $10.00
4 1,500 @ 6.08 9 1,300 @ 10.00
8 800 @ 6.40 11 600 @ 11.00
13 1,200 @ 6.50 23 1,200 @ 11.00
21 700 @ 6.60 27 900 @ 12.00
29 500 @ 6.79 4,500
5,300

Instructions
a. Assuming that periodic inventory records are kept, compute the inventory at April 30
using (1) FIFO and (2) average-cost. (Round unit price averages to four decimal places.)
b. Assuming that perpetual inventory records are kept in both units and dollars, determine
the inventory at April 30 using (1) FIFO and (2) average-cost.
c. In an inflationary period, which inventory method—FIFO or average-cost—will show the
highest net income?
Answer:
(a) 1. FIFO : 500 @ $ 6.79 = $ 3,395
300 @ $ 6.60 = 1,980
$ 5,375
2. Average cost :
𝑇𝑜𝑡𝑎𝑙 𝑐𝑜𝑠𝑡 $ 33,655
= = $ 6.35 average cost per unit
𝑇𝑜𝑡𝑎𝑙 𝑢𝑛𝑖𝑡𝑠 5,300∗

800 @ $6.35 = $ 5,080

*Perhitungan Total Units:
Units Price TC
600 @ $ 6.00 = $ 3,600
1,500 @ $ 6.08 = 9,120
800 @ $ 6.40 = 5,120
1,200 @ $ 6.50 = 7,800
700 @ $ 6.60 = 4,620
500 @ $ 6.79 = 3,395
5,300 $ 33,655

(b) 1. FIFO 500 @ $6.79 = $ 3,395

300 @ $6.60 = 1,980
$ 5,375
 2. Average cost :

Purchased Sold Balance

No. of No. of No. of Unit
Date Unit Cost Unit Cost Amount
units units units Cost
April, 1 600 $ 6.0000 $ 3,600
3 500 $ 6.000 100 6.0000 600
4 1,500 $ 6.08 1,600 6.0750 9,720
8 800 6.40 2,400 6.1833 14,840
9 1,300 6.1833 1,100 6.1833 6,802
11 600 6.1833 500 6.1833 3,092
13 1,200 6.50 1,700 6.4071 10,892
21 700 6.60 2,400 6.4633 2,400 6.4633 15,512
23 1,200 6.4633 1,200 6.4633 7,756
27 900 6.4633 300 6.4633 1,939
29 500 6.79 800 6.6675 5,334
Inventory April 30 is $5,334
(c) FIFO; older items with lower costs are assumed sold first.

E – 8.10
Esplanade SA was formed on December 1, 2018. The following information is available from
Esplanade's inventory records for Product BAP.
Units Unit Cost
January 1, 2019 (beginning inventory) 600 R$ 8.00
Purchases :
January 5, 2019 1,100 9.00
January 25, 2019 1,300 10.00
February 16, 2019 800 11.00
March 26, 2019 600 12.00

A physical inventory on March 31, 2015, shows 1,500 units on hand.

Instructions
Assuming Esplanade uses a periodic system, prepare schedules to compute the ending inventory
at March 31, 2019, under each of the following inventory methods (round to two decimal
places).
a. Specific identification.
b. FIFO.
c. Weighted-average.
Under (a), 400 units from the beginning inventory are on hand and 1,100 units from the January
5 purchase are on hand.

Answer:
(a) ESPLANADE COMPANY
Computation of Inventory for Product
BAP Under Specific Identification Inventory Method
March 31, 2019
Units Unit Cost Total Cost
Beginning inventory (portion)......... 400 $ 8.00 $ 3,200
January 5, 2019 (portion).................. 1,100 9.00 9,900
March 31, 2019, inventory................ 1,500 $ 13,100
(b) ESPLANADE COMPANY
Computation of Inventory for Product
BAP Under FIFO Inventory Method
March 31, 2019
Units Unit Cost Total Cost
March 26, 2019................................. 600 $ 12.00 $ 7,200
February 16, 2019............................. 800 11.00 8,800
January 25, 2019 (portion)............... 100 10.00 1,000
March 31, 2019, inventory................ 1,500 $ 17,000

(c) ESPLANADE COMPANY

Computation of Inventory for Product
BAP Under Weighted-Average Inventory Method
March 31, 2019
Units Unit Cost Total Cost
Beginning inventory........................... 600 $ 8.00 $ 4,800
January 5, 2019................................... 1,100 9.00 9,900
January 25, 2019................................. 1,300 10.00 13,000
February 16, 2019............................... 800 11.00 8,800
March 26, 2019................................... 600 12.00 7,200
4,400 $ 43,700
Weighted – average cost
$ 9.93
($43,700 ÷ 4,400)...............................
March 31, 2019, inventory................ 1,500 $9.93 $14,895