homework and quizzes question

1)Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2018 is available:
 

Aug.1	Inventory on hand—10,500 units; cost $8.40 each.
8	Purchased 29,000 units for $7.40 each.
14	Sold 20,500 units for $13.90 each.
18	Purchased 15,500 units for $6.90 each.
25	Sold 19,500 units for $12.90 each.
31	Inventory on hand—15,000 units.

 
Required:
Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using each of the following cost flow methods:

 

 

 

 

 

2)Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system.
 

Beginning inventory, January 1, 2018	1,150	units @ $80 each
Purchases:
January 15	2,400	units @ $95 each
January 21	2,200	units @ $100 each
Sales:
January 5	1,100	units @ $120 each
January 22	1,500	units @ $130 each
January 29	950	units @ $135 each
Ending inventory, January 31, 2018	2,200	units

 
Required:
1a. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2018?
1b. Which method will result in the highest ending inventory balance?
2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

 

3)On January 1, 2018, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $390,000. Inventory data for 2018 through 2020 are as follows:
 

Date	Ending Inventory at Year-End Costs			Cost Index
12/31/2018	$	430,500		1.05
12/31/2019		484,500		1.14
12/31/2020		510,450		1.23

 
Required:
Calculate Taylor's ending inventory for 2018, 2019, and 2020.

 

 

 

 

 

 

 

 

 
 

 

 

 

4)The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows:
 

	Per Unit
Product	Cost			Replacement Cost			Selling Price
A	$	56		$	51		$	76
B		96			86			116
C		56			71			96
D		116			86			146
E		36			44			46

Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal gross profit percentage is 35% of selling price.
 
Required:
What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? (Do not round intermediate calculations. Round final answers to 2 decimal places.) 
 

 

5)Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $58,800. The following information for the month of November was available from company records:
 

Purchases	$	113,000
Freight-in		3,300
Sales		195,000
Sales returns		6,500
Purchases returns		5,500

In addition, the controller is aware of $9,500 of inventory that was stolen during November from one of the company's warehouses.
 
Required:
1. Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%.
2. Calculate the estimated inventory at the end of November, assuming a markup on cost of

 

6)LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2018:
 

		Cost		Retail
Beginning inventory	$	45,000	$	65,000
Purchases		212,000		405,000
Freight-in		11,468
Purchase returns		6,500		8,500
Net markups				6,300
Net markdowns				4,000
Normal breakage				8,500
Net sales				285,000
Employee discounts				2,300

Sales are recorded net of employee discounts.
 
Required:
1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method.
2. Recompute the cost-to-retail percentage using the average cost method.
 

 

 

 

 

 

 

 

 

12)Samuelson and Messenger (S&M) began 2018 with 250 units of its one product. These units were purchased near the end of 2017 for $20 each. During the month of January, 125 units were purchased on January 8 for $23 each and another 250 units were purchased on January 19 for $25 each. Sales of 200 units and 150 units were made on January 10 and January 25, respectively. There were 275 units on hand at the end of the month. S&M uses a perpetual inventory system.
 
Required:
1. Complete the below table to calculate ending inventory and cost of goods sold for January using FIFO method.
2. Complete the below table to calculate ending inventory and cost of goods sold for January using average cost method.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11)Samuelson and Messenger (S&M) began 2018 with 350 units of its one product. These units were purchased near the end of 2017 for $24 each. During the month of January, 250 units were purchased on January 8 for $27 each and another 300 units were purchased on January 19 for $29 each. Sales of 160 units and 250 units were made on January 10 and January 25, respectively. There were 490 units on hand at the end of the month. S&M uses a periodic inventory system.
 
Required:
1. Calculate ending inventory and cost of goods sold for January using FIFO.
2. Calculate ending inventory and cost of goods sold for January using average cost.