To be kept a clear structure and organized paper work as accordingly to this guideline. To...

Question

To be kept a clear structure and organized paper work as accordingly to this guideline. To be included the names, IDs and ver

Part 2: (33 points) DRU Company record of transactions for the month December were as follows: Date Transaction U nits Cost $

To be kept a clear structure and organized paper work as accordingly to this guideline. To be included the names, IDs and versions assigned. • Part 1: (46 points) Prepare the Cash Flow Statement for DRU Company given the following data available or the year end 31st December 2018. 1. Net Income = $2,000,000 2. Depreciation expense on the machinery was $20,000 and $5,000 on vehicle. 3. Accounts Receivable increased by 15,000 4. Inventories decreased by 30,000 5. Accounts Payable increased by 12,000. 6. Salaries Payable decreased by 24,000. 7. An equipment was purchased at 350,000. 8. A long-term investment was sold at 45,000. 9. Bonds payable of 60,000 were issued. 10. Cash Dividends of 48,000 were declared and paid. 11. Beginning Cash (2018) = 44,000

Part 2: (33 points) DRU Company record of transactions for the month December were as follows: Date Transaction U nits Cost $/unit 1 Dec Beginning Inventory 2,000 6 10 Dec Purchases 3,000 8 15 Dec Purchases 1,500 18 Dec Purchases 1,800 11 25 Dec Purchases 1,000 14 10 Units Sold: 5,000 units at a selling price 28 $/unit a) Assuming company use Periodic System, calculate Ending Inventory and Cost of Goods Sold using: • FIFO. Show your calculations. • LIFO. Show your calculations. • Average Cost. Show your calculations. b) As a consultant for DRU Company, suggest the best method to be chosen and state the reasons. Part 3: (21 points) DRU Company uses the LCNRV method, on individual item basis, in pricing its inventory items. The inventory at December 31, 2018 consists of products A, B, C. Relevant per-unit data for these products are as follow: Products A C 800 Estimated selling price Cost Estimated cost of completion Estimated cost to sell 700 480 150 650 250 200 150 350 350 100 120 Requirement: 1. Determine the proper unit value for each of the inventory items above using LCNRV for statement of financial position reporting purposes at December 31 2018. How much will be the final inventory value?

 · Answer

PART 1
	CASH FLOW STATEMENT

	OPENING CASH		44000

INFLOW-	NET INCOME	2,000,000
	INVENTORY	30,000
	ACCOUNTS PAYABLE	12,000
	INVESTMENT	45,000
	BONDS ISSUED	60,000	2,147,000
			2,191,000
OUTFLOW-	ACCOUNTS RECEIVABLE	15,000
	SALARY PAYABLE	24,000
	EQUIPMENT	350,000
	CASH DIVIDEND	48,000	437,000
	CLOSING CASH		1,754,000

PART 2
(A)	STOCK AND PURCHASES
	DATE	UNITS	COST/UNIT	COST OF GOODS SOLD
	1	2,000	6	12,000
	10	3,000	8	24,000
	15	1,500	10	15,000
	18	1,800	11	19,800
	25	1,000	14	14,000
		9,300	9.12	84,800
	SALES	5000 @ 28/ UNIT
	IF FIFO METHOD
	COST OF GOODS SOLS
	DATE	UNITS	COST/UNIT	COST OF GOODS SOLD
	1	2000	6	12,000
	10	3000	8	24,000
		5000		36,000
	INVENTORY
	DATE	UNITS	COST/UNIT	COST OF GOODS SOLD
	15	1500	10	15,000
	18	1800	11	19,800
	25	1000	14	14,000
		4,300		48,800

	IF LIFO METHOD
	COST OF GOODS SOLS
	DATE	UNITS	COST/UNIT	COST OF GOODS SOLD
	10	700	8	5,600
	15	1,500	10	15,000
	18	1,800	11	19,800
	25	1,000	14	14,000
		5,000		54,400
	INVENTORY
	DATE	UNITS	COST/UNIT	COST OF GOODS SOLD
	1	2,000	6	12,000
	10	2,300	8	18,400
		4,300		30,400

	IF AVERAGE COST METHOD
	COST OF GOODS SOLD(5000*9.12)			45,600
	INVENTORY(4300*9.12)			39,216

(B)	Company should use average cost method.
	As it gives clear and fair view of all transactions and reduce the impact of higher or lower
	valuation of profit and inventory on account of any unusal purchases
	As we can see in FIFO method,inventory is valuing very high as we have buy high cost
	items in end and in LIFO method, inventory is valuing very low as we have lower value purchase
	in beginning. Whereas we can see, inventory is optimum in average cost method
	So it will be better to start using this method only.

	PART 3
	PRODUCTS	A	B	C

a	SELLING PRICE	700	650	800

b	COST	480	250	350

c	COST TO COMPLETE	150	200	350

d	COST TO SELL	100	150	120

a-c-d	NRV	450	300	330

LOWER OF	UNIT/VALUE	450	250	330
NRV OR COST
	IF UNITS
	4300	1935000	1075000	1,419,000
	FINAL INVENTORY VALUE

.

To be kept a clear structure and organized paper work as accordingly to this guideline. To...

Question:

Answers

Similar Solved Questions

"The patient wants health care professionals to understand that health care is a means to a...

Problem 1 (20 points) Consider the matrix A given with a parameter a as follows 1...

Q1. Suppose we have a virtual memory of size 2 Terabytes (2048GB, or 241 bytes), where...

Bindy Crawford created a corporation providing legal services, Splish Brothers Inc., on July 1, 2022. On...

How can you determine the total cost of an item including tax if you you know the price of the item and the tax rate?

6. The foul odor of rancid butter is caused by butanoic acid. (a) Write its condensed...

A firm is reviewing a project that has an initial cost of $33,500. The project will...

(17%) Problem 6: west of north Suppose you walk 13.5 m in a d rection exactly...

MUST SHOW ALL WORK!! 3. Calculate the price of a $1,000 10 year 5% coupon bond...

Why is there more than one definition of acid–base behavior?

Given a required return of 10%p.a., consider the following investments: &n

You need to design a program to record data for a fishing boat. You will need...

8. C alculate the frequency of green light that has a wavelength of 531 nm? 9....

What is the mass of mercuric oxide (216.59 g/mol) that decomposes to release 0.750L of oxygen...

Calculate the hydronium ion concentration in an aqueous solution of 9.34×10-2 M ascorbic acid, H2C6H6O6 (aq)....

Does Chronic Kidney disease cause or associated with acute Dacryocystitis pure hypercholesterolemia, Anemia, pleural effusion not...

Answer the following questions on the preparation of a soap laboratory 1. What will happen to...

Please solve Which of the following molecules contains the most chemical potential energy? ADP AMP ATP...