TAKE HOME QUIZ #1

ADVANCED FINANCIAL ACCOUNTING & REPORTING (AFAR)

Acctg 162 – July 20, 2019

Name: ___________________________________________________________________________

INSTRUCTIONS: Answer using yellow papers. Show your computation.

The Kardel Sharpeye Company manufactures a single product in a continuous process in two
departments. Cost and production data for the finishing department, the last department for the month
of April, 2019 are shown below:

Cost:

Costs from preceding department P 135,000

Work in process, April 1 P 18,000
Materials -
Labor P 85,800
Factory Overhead P 47,200

Quantity:

Units in process, April 1 (All materials, 50% 4,000

converted)
Units received from preceding department 30,000
Units in process, April 30 (All materials, 60% 6,000
overhead)

1. Using FIFO Costing in the Finishing Department, what is the total cost transferred to finished
goods?
Belsen purchased inventory on December 1, 2019. Payment of 200,000 foreign currencies was to be
made in sixty days. Also, on Dec. 1, Belsen signed a contract to purchase 200,000 foreign currencies
in sixty days. The spot rate was P1 – 2.80 FC and the 60-day forward rate was P1 = 2.60 FC. On
December 31, the spot rate was P1 – 2.90 FC and the 30-day forward rate was P1 = 2.62 FC. On
February 1, 2020, the spot rate was P1 – 2.61. Assume a fair value hedge.

2. Prepare journal entries for both the hedged item and hedging instrument on Dec 1, Dec 31, and
Feb 1, 2020.