You are given the following information for transactions by Schwinghamer Co. All transactions are settled in cash.
Question:
Instructions
(a) Prepare the required journal entries for the month of October for Schwinghamer Co.
(b) Determine the ending inventory for Schwinghamer.
(c) On October 31, Schwinghamer determines that the product has a net realizable value of $10 per unit. What amount should the inventory be valued at on the October 31 balance sheet? Prepare any required journal entries.
(d) Considering your answer from part (c), what amount will be reported on the October income statement for cost of goods sold?
Taking It Further
What if Schwinghamer had used weighted average instead of FIFO? How would this affect the October 31 ending inventory on the balance sheet compared with FIFO?
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Accounting Principles
ISBN: 978-1119048503
7th Canadian Edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak