Create adjusting journal entries for those transitions. 1- Because of strong demand and a need for additional
Question:
Create adjusting journal entries for those transitions.
1- Because of strong demand and a need for additional inventory, DeeDee needed some temporary additional storage space so on July 1, 2020 they rented a unit for an annual rate of $19,200 and they paid the entire amount up front. The entire amount was expensed on July 1.
2- As of 12/31/2020 the Available for Sale Equity Investments have a fair value of $380,000 and the fair value of the Available for Sale Debt Investments have a fair value of $130,000. Due to the market conditions, the company does not plan on selling the assets in 2020, but their intent is to sell at some point in time.
You can ignore the tax effect on unrealized gains and losses. (Hint: Unrealized Gains and Losses – OCI are closed to Accumulated Other Comprehensive Income at the end of the year.)
3- DeeDee uses the FIFO Inventory Method in valuing inventory. The inventory balance of $372,500 was based on a physical count at 12/31/2020. Based on your analysis, you have noted that $6,000 of marketing games that belonged to Marketing Majors Inc. and being held by DeeDee on consignment was included in the physical account at year end. You also note that goods were in transit from a vendor on December 31, 2020 and were not included in ending inventory. The cost of the inventory was $18,000 and the goods were shipped f.o.b. shipping point on December 29, 2020.