Running Data began operations on February 1. The company produces GPS watches designed for runners. On...

90.2K

Verified Solution

Question

Accounting

Running Data began operations on February 1. The companyproduces GPS watches designed for runners. On February 15, thecompany purchased 1,600 DVD discs to include with each runningwatch it sells. The DVD is preloaded with product setupinformation, an instruction manual including video examples, andwarranty details. Each disc cost Running Data $7.
During February, 500 discs were taken from the raw materialsinventory. Of these, 80 were taken by the sales manager to salesmeetings with prospective retailers to carry the watches and handedout as advertising. The remaining discs were included with the GPSwatches that were being manufactured in February. Of the watchesthat were bundled with the discs during May, 75% were completed andtransferred from work in process to finished goods. Of the watchescompleted during the month, 60% were sold and shipped tocustomers.
1. Determine the cost of discs that would be ineach of the following accounts at February 28:
raw material
work in process
finihed goods'
COGS
advertising expense
2. Specify whether each of the above accountswould appear on the balance sheet or on the income statement atFebruary 28.
raw material
work in process
finished goods
COGS
advertising exp

Answer & Explanation Solved by verified expert

4.2 Ratings (661 Votes)

1 Units of Discs in Raw Material on February 28 Discs Purchased Discs Transfer to Advertising Discs Transfer to Production 1600 80 50080 1100 discs Cost of Discs in Raw Material on February 28 Units of Discs in Raw Material See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member