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You are given the following information for Amelia Company All transactions are settled in cash. Amelia uses a perpetual inventory system and the weighted average cost formula. Increased competition

You are given the following information for Amelia Company. All transactions are settled in cash. Amelia uses a perpetual inventory system and the weighted average cost formula. Increased competition has reduced the price of the product. Instructions (a) Prepare the required journal entries for the month of July for Amelia Company. (Round the weighted average cost per unit to two decimal places.) (b) Determine the ending inventory for Amelia. (c) On July 31, Amelia Company learns that the product has a net realizable value of $8 per unit. Prepare the journal entry, if required, to recognize the decrease in value of this product. If no entry is required, explain why. (d) What amount should the ending inventory be valued at on the July 31 balance sheet? What amount should the cost of goods sold be valued at on the July income statement? Taking It Further What if Amelia had used FIFO instead of weighted average? How would this affect the July 31 ending inventory on the balance sheet compared with weighted average?

Apr 06 2020 View more View Less

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