Managerial Accounting Exercise I
January 2016 Initial stock February 2016: Out 5000 units at $5 each
600 units. April 2016 In 3700 units unit at $8 each June 2016 : Out 9 000 units August2016 In 600 units October 2016 : Out December 2016 1960 units. : Out January 2017 430 units In : 8 000 units at $10 each February 2017 : Out 900 units July 2017 1800 units. : Out September 2017
November 2017
December 2017 Out 6500 units : Out 2000 units
: In : 50000 units at $5 1- Please prepare the inventory statements for the years 2016 and 2017 based on the FIFO and
WAC methods?
2- Calculate the ending inventory and the COST OF GOODS SOLD for year 2016 and 2017
based on the FIFO and WAC methods? what would be the gross margin if the selling price is
$10.00
3- In which economic and fiscal situation the LIFO method is the best? Exercise II
The Sun Yoga Company Inc decided to invest in some short term instruments. Its CFO decided
to invest in a listed company named Spoon Inc.
1. On 1st January, the company bought 300,000 shares of Salt Inc at $9.50
2. On 15th of October, the company received a cash dividend of $5.00 per share
3. On 30th of November, the price of Salt Inc shares rose to $17.00 per share.
4. On 30th of December , the company decided to sell off all its shares of Salt Inc
a)
Please post the account entries of each transaction
b)
What would happen if instead of rising, the price of the shares dropped to $8.00 per share
and the company sold all of its shares? Exercise III
During the monthly closing of it’s A/R accounts, Dove Inc, posted its uncollected received
classified by their age.
The company has a beginning allowance balance of USD $75000. Please post the appropriate
entries to write off the uncollectible, Age of Accounts sales
%uncollectible 1 – 30 Days 31 – 60 Days 61 – 90 Days Over 90 Days $ 1,000,000 $ 850,000 $ 90,000 $ 25,000 1.5% 2% 50% 30%
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