« previous next »

Author Question: Shubart Apparel Company purchased 1,000 shirts from Blue Parrot, FOB shipping point. Each shirt had ... (Read 53 times)

storky111

  • Hero Member
  • *****
  • Posts: 561
on: Jul 5, 2018
Shubart Apparel Company purchased 1,000 shirts from Blue Parrot, FOB shipping point. Each shirt had an invoice cost of 18, which includes 1 of tariff paid to import the shirts from Belize.
 
  Shubart also paid FedEx 2,000 to have the shirts shipped to its warehouse in Florida, and another 500 to insure the shirts while they were in transit.
  Required:
  a. Determine the inventory cost that Shubart should record.
  b. Explain when the costs described above will become expenses.
  What will be an ideal response?

Question 2

Merchandise inventory at the end of the year was understated. Which of the following statements correctly statesthe effect of the error?
 a. net income is understated
  b. net income is overstated
  c. cost of merchandise sold is understated
  d. merchandise inventory reported on the balance sheet is overstated


babybsemail

  • Sr. Member
  • ****
  • Posts: 304
Reply #1 on: Jul 5, 2018
Answer to Question 1

a. 20,500 = (18 x 1,000 shirts) + 2,000 + 500
b. All of the costs above become part of inventory and will become expenses when the inventory is sold.

Answer to Question 2

a


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

In 2012, nearly 24 milliion Americans, aged 12 and older, had abused an illicit drug, according to the National Institute on Drug Abuse (NIDA).

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Blue-tongued lizards are the largest species of skink Blue-tongued lizards are the largest species of skink
The dorsal (red) and ventral (blue) body cavities. The dorsal (red) and ventral (blue) body cavities.
American soldiers—some of them regulars in deep blue uniforms, others in buckskin cowboy outfits— fi American soldiers—some of them regulars in deep blue uniforms, others in buckskin cowboy outfits— fi
Decimal Point Place Values Decimal Point Place Values
Your company advertises all prices on the menu board as a final price, including HST of 13%. A ... Your company advertises all prices on the menu board as a final price, including HST of 13%. A ...
Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ... Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ...
Video: Bulk flow - Factors that influence bulk flow

For a complete list of videos, visit our video library