BCO 114 Miami Computing Financial Statements for Dry Fruits Wholesale CO Excel Task Attached is the PDF for the task ahead. Must analyse the information an

BCO 114 Miami Computing Financial Statements for Dry Fruits Wholesale CO Excel Task Attached is the PDF for the task ahead. Must analyse the information and answer the questions in the PDF. Please read through 🙂 The rubric is also attached. BCO114
ACCOUNTING I
Task brief & rubrics
Task: Final Assignment (60% of the Final grade)
You must answer all the questions in the proposed business case.
This task assesses the following learning outcomes:


Critically understand the differences between the methods of valuation of the inventory
Knowing how to properly elaborate an income statement and determine the ending inventory balance.
LAUNCH: WEEK 7 / DELIVERY: JULY 19th, 2020, 23:59HRS ON MOODLE
Submission file format: Excel document with all the answers, clearly identifying all steps, results, journals and including comments besides each answer.
BUSINESS CASE (100 points)
Jim has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios.
During its first month of activity, the company has made the following transactions:
February 2: Purchase of Pistachios:
2.500Kg@8$/Kg
$ 20.000
Purchase of Almonds:
4.000Kg @ 4$/Kg
$ 16.000
Purchase of Peanuts:
6.000Kg @ 2$/ Kg
$ 12.000
1.500Kg@10$/Kg
$15.000
Purchase of Almonds:
2.000Kg @ 5$/Kg
$ 10.000
Purchase of Peanuts:
2.000Kg @ 3$/ Kg
$ 6.000
February 3: Purchase of Pistachios:
February 6: Sold to several clients:
Pistachios:
2.000Kg@ 18$/Kg
$ 36.000
Almonds:
2.500Kg @ 10$/Kg
$ 25.000
Peanuts:
3.000Kg @ 6$/ Kg
$ 18.000
February 6: Sold to Fruits Lovers Inc.:
Pistachios:
500Kg @18$/Kg.
$ 9.000
Almonds:
1.000Kg @ 10$/Kg
$ 10.000
Peanuts:
1.500Kg @ 7$/ Kg
$ 10.500
February 12 Purchase of Pistachios:
Purchase of Almonds:
1.500Kg@12$/Kg
$ 18.000
2.000Kg @ 7$/Kg
$ 14.000
February 13: Sale of peanuts to Peanuts Lovers Inc.: 3.500Kg @7$/kg
$ 24.500
February 14: Purchase of Peanuts
$18.000
6.000 Kg @3$/Kg
February 19: Sold to several clients:
Pistachios:
1.000Kg@ 20$/Kg.
$ 20.000
Almonds:
1.500Kg @ 12$/Kg
$ 18.000
Peanuts:
3.000Kg @ 8$/ Kg
$ 24.000
February 25: Purchased from various suppliers:
Pistachios:
1.000Kg@12$/Kg.
$ 12.000
Almonds:
1.000Kg @ 8$/Kg
$ 8.000
Peanuts:
1.000Kg @ 3$/ Kg
$ 3.000
Besides these transactions, the company has had the following expenses:
Salaries: $3.000
Electricity bill: $200
Renting of equipment: $700
Rent of warehouse and office: $1.000
Miscellaneous: $1.000
Jim’s accountant recommended that he should use the average cost method in order to determine the cost of the inventory sold but he is not sure about the
consequences it may have on his financial situation.
Relying on your accounting knowledge, Jim asks you the following questions:
1: Why in your opinion did Jim’s accountant recommend the average cost method and what difference is there with the two other methods FIFO and LIFO?
Explain the main characteristics of each method of valuation of the inventory and the consequences they may have on the valuation of the inventory and
determination of the net income in case of price fluctuation. (20 points)
2: Prepare an Income statement of the company at the end of February using as method of valuation of the inventory the average cost method, FIFO and LIFO
for each one of the products sold by Jim, and calculate the balance of the inventory at the end of the month. Explain the calculations. (40 points: 30 points for the
calculation and 10 for explanations)
3: In order to compare with the records made by his accountant, Jim asks you to prepare the different journal entries for the purchases and sales mentioned
above for each one of the 3 different methods used above. (15 points)
4: Jim’s accountant insisted that he should use a perpetual inventory system instead of a periodic inventory system and the average cost method for valuating
the inventory. Do you agree with this advice (justify your answer)? Would the balance of the inventory at the end of the month be the same? And the net
income? (10 points)
5: Jim would like to know a forecast of the number of days to sell the inventory based on the results of the month of February. Explain your calculation and the
steps followed. (10 points: 5 for calculation and 5 for explanation)
6. Jim expects that the prices of the merchandises will dramatically decrease in the next future as a result of the Covid 19 crisis. Which method of valuation of the
inventory would you thus recommend to Jim? Explain your answer. (5 points)
Rubrics
9-10
8-8.9
7-7.9
6-6.9
3-5.9
1-2.9
0
Descriptor
The student demonstrates an excellent understanding of the
concepts.
The student demonstrates a good understanding of the concepts.
The student demonstrates a fair understanding of the concepts.
The student demonstrates some, but insufficient understanding of the
concepts.
The student demonstrates insufficient understanding of the concepts.
They may mention some relevant ideas or concepts, although it is
clear that the relationship between them is not understood by the
student.
The student demonstrates insufficient understanding of the concepts
and does not mention any relevant ideas or concepts.
The student leaves the question blank or cheats.
95% of the grade based on the approach, calculations and comments, and 5% based on the presentation and look & field of the spreadsheet.
Points are at the end of each question.

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