ACC 201 week 2 assignment 1
3 - 22 Identifying product and period cost
Indicate whether each of the following costs is a product cost or a period (selling and administrative) cost.
- Advertising expense.
- Insurance on vans used to deliver goods to customers.
- Salaries of sales supervisors.
- Monthly maintenance expense for a copier.
- Good purchased for resale.
- Cleaning supplies for the office.
- Freight on goods purchased for resale.
- Salary of the marketing director.
- Freight on goods sold to customer with terms FOB destination.
- Utilities expense incurred for office building.
3 – 25 Comprehensive cycle problem: perpetual system
At the beginning of 2012, the jeater company had that following balances in its accounts:
Cash $ 4,300
Common stock 10,000
Retained earnings 3,300
- Purchased inventory that cost $2,200 on account from Blue Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $110 were paid in cash.
- Returned $200 of the inventory that it had purchase because the inventory was damaged in transit. The freight company agreed to pay the return freight cost.
- Paid the amount due on its account payable to Blue Company within the cash discount period.
- Sold inventory that had cost $3,000 for $5,500 on account, under terms 2/10, n/45.
- Received merchandise returned from a customer. The merchandise originally cost $400 and was sold to the customer for $710 cash during the previous accounting period. The customer was paid $710 cash for the returned merchandise.
- Delivered goods FOB destination in Event 4. Freight costs of $60 were paid in cash.
- Collected the amount due on the account receivable within the discount period.
- Took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.
- Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).
- Record each event in a statement model