homework and quizzes question

Asked by lbrdlio
Dated: 11th Jan'18 11:36 AM
Bounty offered: $40.00

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.
  

 

 

 

 

Intermediate accounting
Answered by bizgrad
Expert Rating: 2371 Ratings
Dated: 11th Jan'18 07:54 PM
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units     unit   cost (d)x(e)Quantity     (g)Cost       cost   the total     goods       and   of units     sales       as   January 1Purchase     January       January   cost of     number       for   cost per     total       and   of goods     January       per   Average cost     (b)Inventory