Accounts Receivable, Inventory, Long-lived Assets, Bonds
(Accounts Receivable, Inventory, Long-lived Assets, Bonds)
1. GNC has the following information regarding the inventory of its Super Mega, a multivitamins. Assume GNC uses periodic inventory system each quarter and FIFO.
a. On July 1, GNC had 200 bottles of Super Mega in stock. Each bottle costs $3.
b. On July 15, GNC purchased 5,000 bottles of Super Mega for $25,000 from a supplier, paid $10,000 in cash and the rest was on credit.
c. On August 15, GNC purchased another 1,000 bottles of Super Mega for $6 per bottle on credit.
d. On August 28, GNC sold 1,500 bottles of Super Mega for $10 per bottle. GNC received $10,000 in cash and the remaining balance would be due within one month.
e. On September 22, GNC sold 1,200 bottles of Super Mega for $11 per bottle in cash.
f. At the end of the third quarter, GNC counted its Super Mega inventory and found it had 3,200 bottles remaining.
What is the COGS in the third quarter for GNC? What is the ending inventory value?
Ending inventory has 3,200 units. 1,000x $6 +2,200x$5=17,000
Beginning inventory (200x$3) + purchases ($25,000+1,000x$6)-COGS= Ending inventory ($17,000), that is, COGS=$14,600 What is the inventory turnover ratio for GNC in the third quarter?
COGS/Average Inventory= $146,000/[(600+17,000)/2]=1.66 (different rounding is OK)
What would be the inventory turnover ratio for GNC in the third quarter if GNC were using perpetual inventory system and LIFO? Assume there was no physical count at the end of the quarter.
COGS=(1,000x$6+500x$5)+(1,200x$5)=$14,500
Ending inventory= 200x$3+3,300x$5=17,100
Inventory turnover ratio= COGS/average inventory= 14,500/[(600+17,100)/2]=1.64 (different rounding is OK)
2. At the end of 2011, using aging of accounts receivable, Hammon Co. estimated that it needs $5,000 in allowance for doubtful account, and it had $1,000 previous credit balance from 2010. On May 4, 2012, Hammon decided that $500 became uncollectible and should be written
1. GNC has the following information regarding the inventory of its Super Mega, a multivitamins. Assume GNC uses periodic inventory system each quarter and FIFO.
a. On July 1, GNC had 200 bottles of Super Mega in stock. Each bottle costs $3.
b. On July 15, GNC purchased 5,000 bottles of Super Mega for $25,000 from a supplier, paid $10,000 in cash and the rest was on credit.
c. On August 15, GNC purchased another 1,000 bottles of Super Mega for $6 per bottle on credit.
d. On August 28, GNC sold 1,500 bottles of Super Mega for $10 per bottle. GNC received $10,000 in cash and the remaining balance would be due within one month.
e. On September 22, GNC sold 1,200 bottles of Super Mega for $11 per bottle in cash.
f. At the end of the third quarter, GNC counted its Super Mega inventory and found it had 3,200 bottles remaining.
What is the COGS in the third quarter for GNC? What is the ending inventory value?
Ending inventory has 3,200 units. 1,000x $6 +2,200x$5=17,000
Beginning inventory (200x$3) + purchases ($25,000+1,000x$6)-COGS= Ending inventory ($17,000), that is, COGS=$14,600 What is the inventory turnover ratio for GNC in the third quarter?
COGS/Average Inventory= $146,000/[(600+17,000)/2]=1.66 (different rounding is OK)
What would be the inventory turnover ratio for GNC in the third quarter if GNC were using perpetual inventory system and LIFO? Assume there was no physical count at the end of the quarter.
COGS=(1,000x$6+500x$5)+(1,200x$5)=$14,500
Ending inventory= 200x$3+3,300x$5=17,100
Inventory turnover ratio= COGS/average inventory= 14,500/[(600+17,100)/2]=1.64 (different rounding is OK)
2. At the end of 2011, using aging of accounts receivable, Hammon Co. estimated that it needs $5,000 in allowance for doubtful account, and it had $1,000 previous credit balance from 2010. On May 4, 2012, Hammon decided that $500 became uncollectible and should be written