Jamona Corporation Financial Information

Topics: Inventory, Generally Accepted Accounting Principles, FIFO and LIFO accounting Pages: 2 (470 words) Published: August 10, 2012
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Jamona Corporation

On January 1, 2006, Jamona Corp. purchased 12% bonds, having a maturity value of $300,000, for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2006, and mature January 1, 2011, with interest receivable December 31 of each year. The company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale. The fair value of the bonds at December 31 of each year is as follows:

o2006 – $320,500
o2007 – $309,000
o2008 – $308,000
o2009 – $310,000
o2010 – $300,000

The following information is available from Jamona’s inventory records:

UnitsUnit Cost
January 1, 2007 (beginning inventory)600$ 8.00
Purchases:
January 5, 20071,2009.00
January 25, 20071,30010.00
February 16, 200780011.00
March 26, 200760012.00

A physical inventory on March 31, 2007, shows 1,600 units on hand. Select any one of the inventory methods (LIFO, FIFO, Average Cost, or others).

oOn July 6, Jamona Corp. acquired the plant assets of Berry Company, which had discontinued operations. The appraised value of the property is:

Land $ 400,000
Building 1,200,000
Machinery and equipment 800,000
Total $2,400,000

Jamona Corp. gave 12,500 shares of its $100 per value common stock in exchange. The stock had a market value of $168 per share on the date of the purchase of the property.

Jamona Corp. expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building.

Repairs to building$105,000
Construction of bases for machinery to be installed later 135,000 Driveways and parking lots 122,000
Remodeling of office space in building161,000
Special assessment by city on land 18,000

On December 20, the company paid cash for machinery, $260,000, subject to a 2% cash discount, and freight on machinery of $10,500.

On January 1, 2007,...
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