Question

Cookie Creations 06 a-b (Part Level Submission) Natalie is busy establishing both divisions of her business...

Cookie Creations 06 a-b (Part Level Submission)

Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goals for the next 11 months are to sell one mixer per month and to give two to three classes per week.

The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Kzinski that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination). Assume that Natalie has decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory.

Inventory as on January 31, 2020 represents three deluxe mixer purchased at a unit cost of $595.

The following transactions occur in February to May 2020.
Feb. 2 Natalie buys two deluxe mixers on account from Kzinski Supply Co. for $1,200 ($600 each), FOB destination, terms n/30.
16 She sells one deluxe mixer for $1,150 cash.
25 She pays the amount owed to Kzinski.
Mar. 2 She buys one deluxe mixer on account from Kzinski Supply Co. for $618, FOB destination, terms n/30.
30 Natalie sells two deluxe mixers for a total of $2,300 cash.
31 She pays the amount owed to Kzinski.
Apr. 1 She buys two deluxe mixers on account from Kzinski Supply Co. for $1,224 ($612 each), FOB destination, terms n/30.
13 She sells three deluxe mixers for a total of $3,450 cash.
30 Natalie pays the amounts owed to Kzinski.
May 4 She buys three deluxe mixers on account from Kzinski Supply Co. for $1,875 ($625 each), FOB destination, terms n/30.
27 She sells one deluxe mixer for $1,150 cash.

(a)

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Determine the cost of goods available for sale.
Cost of goods available for sale

Homework Answers

Answer #2

Answer:

Units Rate Amount
Jan-31 Opening Stock 3 $ 595.00 $      1,785.00
Feb-02 Purchase 2 $ 600.00 $      1,200.00
Mar-02 Purchase 1 $ 618.00 $         618.00
Apr-01 Purchase 2 $ 612.00 $      1,224.00
May-04 Purchase 3 $ 625.00 $      1,875.00
Cost of Goods available for sale $      6,702.00
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