ACCT 202 Chapter 2: ACC 202 ch 2
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Rock Slide is a distributor that assembles power units. Using the material presented in Schedules A and Schedule B:
(1) Determine Rock Slideâs cost of goods sold and the ending inventory using the inventory costing methods of FIFO, LIFO, and Weighted Averages;
(2) Determine Rock Slideâs gross profit (margin) using the inventory costing methods of
FIFO, LIFO and Weighted Averages;
S c h e d u l e A A s s e m b l y o f P o w e r U n i t s Rock Slide
Assembly Activity | Units | Cost/Unit | Total Cost |
Beginning Inventory 1/1/12 | 70 | $105 | $7,350 |
Assembly Units Placed Into Inventory | |||
2/15/12 | 85 | $110 | $9,350 |
4/20/12 | 90 | $112 | $10,080 |
9/18/12 | 65 | $112 | $7,280 |
11/16/12 | 110 | $112 | $12,320 |
12/20/12 | 80 | $120 | $9,600 |
Total Assembled Units Available for Sale- 2012 | 500 | $55,980 |
Schedule B
Sales of Power Units Rock Slide
Sales Activity | Units | Unit Sales Price | Total Sales |
1/15/12 | 60 | $145 | $8,700 |
3/20/12 | 80 | $150 | $12,000 |
5/2/12 | 100 | $150 | $15,000 |
10/8/12 | 60 | $150 | $9,000 |
11/30/12 | 110 | $150 | $16,500 |
12/28/12 | 30 | $175 | $5,250 |
Total 2012 Sales | 440 | $66,450 |
Joe Jackson decides to go into the car repair business by opening Honest Joeâs Garage. The following events occurred during January 2017, the first month of operations:
a. | Joe contributed $15,000 from his savings to the business and took 3,000 shares of no par value common stock. |
b. | The business paid $3,000 for a six-month insurance policy. Record as Prepaid Insurance. |
c. | Paid $750 cash for the first monthâs rent. |
d. | Purchased shop equipment for $8,000 cash. |
e. | Purchased shop supplies costing $3,000 on account. |
f. | Purchased a used wrecker for $11,500 by paying $1,500 down and financing the balance on a three-year note. |
g. | Received $1,750 from customers for repair work done. |
h. | Joe invested another $5,000 into the business and took another 1,000 shares of stock. |
i. | Paid $300 cash for radio advertising for the first month. |
j. | Paid $200 cash for gas, oil, and service costs on the wrecker. |
k. | Paid $3,000 on accounts payable. |
l. | Repaired a truck for Ace Trucking for $1,200 on account. |
m. | Paid $70 for the installation of the telephone. |
n. | Paid $180 for repairs on the wrecker. |
o. | Collected $1,000 cash and accepted a 60-day notes receivable of $1,450 from Speedy Trucking for repair services rendered. |
p. | Paid $150 for cleaning and minor maintenance on the building. |
q. | Received $1,500 cash from customers for repair services rendered. |
r. | Purchased shop supplies for $2,500 cash. |
s. | Purchased a computer for the office for $1,250 cash. |
t. | Received payment of $1,200 from Ace Trucking. |
u. | Paid the monthly utility bill, $900. |
v. | Paid $350 for gas and oil for the wrecker. |
Required:
Record the adjusting journal entry for insurance.
Make an adjusted trial balance.
Foam Products, Inc., makes foam seat cushions for the automotiveand aerospace industries. The companyâs activity-based costingsystem has four activity cost pools, which are listed below alongwith their activity measures and activity rates:
Activity Cost Pool | ActivityMeasure | Activity Rate | ||
Supporting direct labor | Numberof direct labor-hours | $5.55 | perdirect labor-hour | |
Batch processing | Number ofbatches | $ 107.00 | per batch | |
Order processing | Number oforders | $ 275.00 | per order | |
Customer service | Number ofcustomers | $ 2,463.00 | percustomer | |
The company just completed asingle order from Interstate Trucking for 1,000 custom seatcushions. The order was produced in two batches. Each seat cushionrequired 0.25 direct labor-hours. The selling price was $20 perunit, the direct materials cost was $8.50 per unit, and the directlabor cost was $6.00 per unit. This was Interstate Truckingâs onlyorder during the year. |
Required: |
Prepare a report showing the customer margin on sales toInterstate Trucking for the year. (Round your final answersto 2 decimal places.) |
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