Please ONLY answer if you can solve both parts & please double check + show all
ID: 2575901 • Letter: P
Question
Please ONLY answer if you can solve both parts & please double check + show all your work. Thank you for your help :)
1. Alexander uses the cost method to determine its ending inventory at cost. Assume the beginning inventory at cost was $260,000 and at retail was $396,000, purchases during the current year at cost were $1,370,000 and $2,200,000 at retail, freight-in on these purchases totaled $86,000, sales during the current year totaled $2,000,000, and net markups were $48,000 and net markdowns were $72,000, respectively. What is the ending inventory value at cost (to the nearest $1)?
Answer Choices: A) $338,092 B) $371,228 C). $286,804 D). $381,638
2. Margrette Co. is constructing a building. Construction began January 1, 2017 and the building was completed 12/31/17. Marigold made payments to the construction company of $2,994,000 on 7/1, $6,216,000 on 9/1, and $5,910,000 on 12/31. Weighted-average accumulated expenditures were
Answer Choices: A). $3,044,000 B). $3,569,000 C).$15,120,000 D). $9,210,000
Explanation / Answer
1. ($260,000 + $1,370,000 + $86,000) ÷ ($396,000 + $2,200,000 +$48,000) = .649
$396,000 + $2,200,000 + $48,000 – $2,000,000 – $72,000 =$572,000;
$572,000 x 0.649 = $371,228 (B)
2. ($2,994,000 × 6/12) + ($6,216,000 × 4/12) = $3,569,000 (B)