Happlia Co. imports household appliances. Each model has many variations and each unit has an identificationnumber. Happlia pays all costs for getting the goods from the port to its central warehouse in Des Moines. Afterrepackaging, the goods are consigned to retailers. A retailer makes a sale, simultaneously buys the appliance fromHapplia, and pays the balance due within one week.To alleviate the overstocking of refrigerators at a Minneapolis retailer, some were reshipped to a Kansas Cityretailer where they were still held in inventory at December 31, 2018. Happlia paid the costs of this reshipment.Happlia uses the specific identification inventory costing method.Required:1. In regard to the specific identification inventory costing method:a. Describe its key elements.b. Discuss why it is appropriate for Happlia to use this method.2. a. What general criteria should Happlia use to determine inventory carrying amounts at December 31, 2018?b. Give four examples of costs included in these inventory carrying amounts.3. What costs should be reported in Happlia’s 2018 income statement? Ignore lower of cost or marketconsiderations.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Happlia Co. imports household appliances. Each model has many variations and each unit has an identification
number. Happlia pays all costs for getting the goods from the port to its central warehouse in Des Moines. After
repackaging, the goods are consigned to retailers. A retailer makes a sale, simultaneously buys the appliance from
Happlia, and pays the balance due within one week.
To alleviate the overstocking of refrigerators at a Minneapolis retailer, some were reshipped to a Kansas City
retailer where they were still held in inventory at December 31, 2018. Happlia paid the costs of this reshipment.
Happlia uses the specific identification inventory costing method.
Required:
1. In regard to the specific identification inventory costing method:
a. Describe its key elements.
b. Discuss why it is appropriate for Happlia to use this method.
2. a. What general criteria should Happlia use to determine inventory carrying amounts at December 31, 2018?
b. Give four examples of costs included in these inventory carrying amounts.
3. What costs should be reported in Happlia’s 2018 income statement? Ignore lower of cost or market
considerations.
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