1 What are the differences between the periodic and the perpetual methods for tracking inventory? What are some advantages and disadvantages to each method? 2 Describe the differences between the FIFO and LIFO methods of inventory valuation. What might be some reasons a company would pick one method over another?
In an inflationary environment, which inventory cost flow method will produce the lowest amount of cost of goods sold? a. LIFO b. FIFO c. Weighted Average. d. All methods will produce the same amount of cost of goods sold. 2 Williams Company uses the perpetual inventory method. Williams purchased 50
Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether or not it would overstate(+), understate (-), or not affect(NA) the account. See attached file for full problem description. Effect on Inventory Errors on Financial Statements The following incom
Estimating Ending Inventory. See attached file for full problem description. Estimating Ending Inventory: Gross margin Method Don Green, owner of Plains Company, is reviewing the quarterly financial statements and thinks the cost of goods sold is out of line with past years. The following historical data is available for 200
BE5-3 Prepare the journal entries to record the following transactions on Benson Company's books using a perpetual inventory system. (a) On March 2, Benson Company sold $800,000 of merchandise to Edgebrook Company, terms 2/10, n/30. The cost of the merchandise sold was $620,000. (b) On March 6, Edgebrook Company returned $12
E6-6 Zambia Company reports the following for the month of June. Units Unit Cost Total Cost June 1 Inventory 200 $5 $1,000 12 Purchase 300 6 1,800 23 Pu
Use the following info to answer questions 5 to 8 Control Furniture Company Annual Report Excerpts (Figures in thousands of dollars) December 31 Year X1 Year X2 Inventories at FIFO cost
P6-2A Breathless Distribution markets CDs of the performing artist Christina Spears. At the beginning of October, Breathless had in beginning inventory 1,000 Spears CDs with a unit cost of $5. During October Breathless made the following purchases of Spears CDs. Oct. 3 3,500 @ $6 Oct. 19 2,000 @ $8 Oct. 9 4,000 @ $7 Oct. 25
Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change. a. Average receivables go up b. Credit payment time for customers are increased c. Inventory turnover goes from 3 times to 7 times d. Payables turno
Using the lower of cost or market approach applied on an individual item basis, compute the inventory valuation that should be reported for each product on December 31, 2007. The accounting book is Intermediate Accounting by Weygandt and Kiesko, it is the newest edition. See attached file for full problem description.
The following information was derived from the 2004 accounting records of Kelly: Kelly's Goods Kelly's Central Warehouse Held by Consignees Beginning inventory $260,000 $ 28,000 Purchases 950,000 140,000 Freight-in 20,000 Transportation to consignees 10,000 Freight-out 60,000 16,000 Ending inventory 290,000
Alternative inventory methods- comprehensive. Using the December data for Amos Corp, calculate the value of ending inventory under five different methods.
Amos Corp. began operations on Dec 1, 2006. the only inventory transaction in 2006 was the purchase of inventory on Dec 10, 2006, at cost of $20 per unit. None of this inventory was sold in 2006. Relevant information is as follows. Ending inventory units Dec 31, 2006 100 Dec 31,
(All sales and purchases are on credit.) Indicate in each of the spaces provided the effect of the described errors on the various elements of a company's financial statements. Use the following codes: O = amount is overstated; U = amount is understated; NE = no effect. Assume a periodic inventory system. Accounts Acco
Inventory Control Models 1. Rascal's Inc. stocks beef jerky, an item that has a normally distributed demand during the reorder period with a mean of 7 dozen boxes and a standard deviation of three dozen boxes. If it is desirable to experience a stockout only 10 percent of the time, what is the appropriate safety stock? 2
The following information has been given for two clothing stores. Plaids & Stripes and Audrey's Apparel expect that August and September will be the busiest months for their children's clothing departments. 1. Using the information given, which store generated the most total profit from inventory sales? 2. Calculate the ret
BE9-2 Robin Corporation has the following four items in its inventory: Item Cost Replacement Cost Net Realizable Value NRV less Norm Profit Margin Jokers 2,000 1,900 2,100
1) In ____ the inventory and cost of goods sold accounts are kept up to date throughout the accounting period . A) perpetual inventory system (B) periodic inventory system (C) manufacturing inventory system (D) physical inventory sheet 2) A company that sells a low volume of high cost merchandise is more likely to use a ___
Sherpers sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Sherpers's purchases of Xpert snowboards during September. During the same month, 124 Xpert snowboards were sold. Sherpers uses a periodic inventory system. Date Explanation Units Unit Cost
3. The company is considering the previous policy on inventory. Management estimates the carrying cost of inventory to be $65.00 per unit. However, the sales department is complaining that the company is losing money by having inadequate inventory levels. They have provided you with the following information. Safety stock
See attached file for full problem description. Compute the following for 2004, without considering the LIFO reserve Liquidity 1. Days' sales in invetory 2. Merchandise inventory turnover 3. inventory turnover in days 4. operating cycle 5. working capital 6. current ratio 7. acid test ratio 8. cash ratio Debt 1.
Do you think it is necessary to have as many different valuation and flow assumptions as we have? Why or why not?
The A&M Hobby Shop carries a line of radio controlled model racing cars. Demand for the cars is assumed to be constant at rate of 40 cars per month. The cars cost $60 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%. a. Determine the economic order
The Integrated Products Corporation (IPC) is developing ordering policies for materials that it stocks for resale to its customers. One of the items is a TS500 component. a. IPC purchases the TS500 for $24.95 per unit. The forecast of the customer demand for this component is 10,000 units annually. IPC estimates that each
1. During 2005, the Latrex Corporation had cash and credit sales of $47,000 and $45,500 respectively. The company also collected accounts receivable of $26,700 and incurred expenses of $68,500, 80 percent of which were paid during the year. In addition, Latrex paid $24,000 for a 12-month building rental, beginning on July 1, 200
This exercise stresses the relationships between the information recorded in a periodic inventory system and the basic elements of an income statement. Each of the five lines represents a separate set of information. please fill in the missing amounts. a net loss in the right hand column is to be indicated by placing brackets ar
Name and briefly describe each of the inventory methods that are generally accepted in the United States. Which one is the best? Why? this is for an accounting class so i am assuming that it would be related to that field.
Calculate Cost of Goods Sold (COGS) and Ending Inventory (EI) under FIFO, LIFO, and W/A (Periodic Inventory).
1. Calculate Cost of Goods Sold (COGS) and Ending Inventory (EI) under FIFO, LIFO, and W/A (Periodic Inventory). The units of an item available for sale during the year were as follows: Jan. 1 Inventory 6 units at $28 Feb. 4 Purchase
Explain perpetual and periodic inventory methods of reording merchandise inventory. Record the following transactions in general journal in perpetrual and periodic inventory methods.Give necessary working for cost of goods sold and ending inventory in support of your solution. Jan 1, 2005 nventory on hand 1-1-2005
The four unique characteristics of professional service organizations are "(1) an absence of an inventory of sale able merchandise, (2) the importance of professional employees, (3) difficulty in measuring the quantity and quality of output, and (4) small size". Out of these 4 which one causes the greatest problem for a professi
100 Units @ $10.00 200 Units @ 10.50 200 Units @ 11.50 100 Units @ 12.00 Each company sold 400 units but A company uses LIFO inventory costing and Z company uses FIFO inventory costing. Assume there was no beginning inventory. Calculate the value of ending inventory for both companies and the cost of goods sold for both