Individual Homework #1 (6 points) . On December 6, 2018, Tarbox Toyota placed an
ID: 2336437 • Letter: I
Question
Individual Homework #1 (6 points) . On December 6, 2018, Tarbox Toyota placed an order to buy twenty-five 2018 Toyota total cost of $345,500 ($13,820 per vehicle) to be delivered by Auto Transport Systern Tarbox Toyota received the shipment of the twenty-five 2018 that . along with an invaice due in 30 days for $318,750 ($12,750 per vehicle) due to a special d Toyota Corollas o n December 30, 2018 Toyota awarded Tarbox because the dealership surpassed its budgeted sales for nearly 25%. for the year by .Tarbox Toyota received an invoice for $9,750 from Auto Transport Systems for the de for the delivery of the Corollas on December 30, 2018. Based on the manufacturers suggested retail price (MSRP) of $18,500 per vehicle, the shipment had a total sales value of $462,500 Tarbox Toyota did not sell any of the cars received on December 30th until January 2019 AMOUNT To comply with GAAP, Tarbox Toyota would record the cars as inventory on December 30, 2018 at a total historic cost value of: (2 points) Supporting Calculation Required: 5345566-a57. (8v,375) ,sasa 'las sa 7so AMOUNT In its GAAP balance sheet at December 31, 2018, Tarbox Toyota would report the car rs received on December 30 as inventory at a total value of: (2 points) Assume that on December 31, 2018 Tarbox Toyota sold two of the cars received on December 30h AMOUNT In its GAAP balance sheet at December 31, 2018, Tarbox Toyota would report the cars received on December 30 as inventory at a total value of: (2 points) Supporting Calculation Required:Explanation / Answer
a. Total historic cost value of inventory on december 30 as per GAAP = 328,500 $
working note:
under historical cost the actual purcase cost of the car is recorded it includes deduction of discount as well as addition of delivery cost.
statement showing historic cost of inventory purchased on december 30
per unit
$
amount
$
per car historic cost = total historic cost of inventory / total no.cars
= 328,500 / 25
= 13,140 $
b. it is assumed that no vehicles recieved on december 30 are sold , there the carrying value of the inventory in the balance sheet as on december 31
As per GAAP the inventory is recorded at value which is lesser of cost or market value
historic cost per vehicle = 13,140 $
market value per vehicle = 18,500 $
therefore the balance sheet value is taken as 13, 140 per vehicle as it is lower
total inventory value on balance sheet as on december 31
[13,140 * 25 vehicles] = 328,500 $
c. it is assumed that 2 vehicles recieved on december 30 are sold , there the carrying value of the inventory in the balance sheet as on december 31
number of vehicles in stock as on december 31 = [25-2]
= 23 vehicles
As per GAAP the inventory is recorded at value which is lesser of cost or market value
historic cost per vehicle = 13,140 $
market value per vehicle = 18,500 $
total inventory value on balance sheet as on december 31
[13,140 * 23 vehicles] = 302,220 $
* the two vehicles that are sold is to be accounted at market value and the difference between cost and market value is taken as profit on sale .
particularsper unit
$
no.unitsamount
$
Purchase value (net of discount) 12,750 25 318,750 Add: cost of transportation - - 9,750 total historic cost of inventory 328,500