Jonny Fairplay owns and operates Fairway Greenhouse, Inc. which sells lawn and garden supplies and equipment....
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Jonny Fairplay owns and operates Fairway Greenhouse, Inc. which sells lawn and garden supplies and equipment. Fairway Greenhouse, Inc. purchases inventory at a cost of $8,600. It cost the company $200 in transportation costs to get the inventory to the store and then $450 to assemble it after it arrives. a. What are rules regarding capitalizing inventory costs? b. What is the cost of the inventory to be capitalized for Fairway Greenhouse, Inc.? c. Imagine that part of the inventory was damaged during transit and it will cost Fairway Greenhouse, Inc. $500 to repair the inventory. How should that cost be accounted for? Jonny Fairplay owns and operates Fairway Greenhouse, Inc. which sells lawn and garden supplies and equipment. Fairway Greenhouse, Inc. purchases inventory at a cost of $8,600. It cost the company $200 in transportation costs to get the inventory to the store and then $450 to assemble it after it arrives. a. What are rules regarding capitalizing inventory costs? b. What is the cost of the inventory to be capitalized for Fairway Greenhouse, Inc.? c. Imagine that part of the inventory was damaged during transit and it will cost Fairway Greenhouse, Inc. $500 to repair the inventory. How should that cost be accounted for?
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Inventories are included as part of the ordinary course of business Other cost to be considered in a... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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