1.company receives a $55,000 cash deposit from a customer on December 15 but wil
ID: 2379837 • Letter: 1
Question
1.company receives a $55,000 cash deposit from a customer on December 15 but will not deliver the goods until January 20. What month will revenue be recorded?
2.During 2010, Sigma Company earned service revenues amounting to $900,000, of which $700,000 was collected in cash; the balance will be collected in January 2011. What amount should the 2010 income statement report for service revenues?
3. Lauer Corporation uses the periodic inventory system and has provided the following information about one of their laptop computers:
Date Transaction Number of Units Cost per Unit
1/1 Beginning inventory 100 $800
5/5 Purchase 200 $900
8/10 Purchase 300 $1,000
10/15 Purchase 200 $1,050
During the year, 150 laptop computers were sold. Must show work
What was cost of goods sold using the FIFO cost flow assumption? _________________
4.
. Lauer Corporation uses the periodic inventory system and has provided the following information about one of their laptop computers:
Date Transaction Number of Units Cost per Unit
1/1 Beginning inventory 100 $800
5/5 Purchase 200 $900
8/10 Purchase 300 $1,000
10/15 Purchase 200 $1,050
During the year, 150 laptop computers were sold. Must show work
What was cost of goods sold using the LIFO cost flow assumption? _________________
Explanation / Answer
Hi,
Please find the answers as follows:
1) January. It is so because revenue is recognized at the time the goods or services are delivered to the customer.
2) 900000. It is so because services have already been provided by Sigma Corporation.
3) FIFO Method = 100*800 (Full Value of Opening Inventory) + 50*900 (Value Sold from 5/5 Purchase) = 125000
4) LIFO Method = 150*1050 (Full Value Sold from 10/15 Purchase) = 157500
Thanks.
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