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# Inventory

### Avon Products: Holding Costs for Inventory

Throughout this semester, I have analyzed the financial statements for Avon Products, Inc. The one area where Avon needs improvement is reducing its inventory levels. Is there a resource where I can find an average industry percentage for inventory holding costs?

### Inventory Cost Basis adjusted for inflation using the CPI

A total of 80,000 units were sold during the first quarter. The current cost per unit was \$2.10 on December 31, 2000 and \$2.40 on March 31, 2001 Use the current cost basis, compute the first quarter of 2001 1. Ending Inventory 2. Cost of Goods Sold Calculations Items Units Price

### Tori Amos Inventory Methods: specific ID, FIFO, LIFO, average cost, Dollar-Value LIFO

See attached file. Problem: Tori Amos Corporation began operations on December 1, 2006. The only inventory transactions in 2006 was the purchase of inventory on December 10, 2006 at a cost of \$20 per unit. None of this inventory was sold in 2006. Relevant information is as follows. Ending inventory units December 31,

### Comparison of Increase in Sales & Inventory

Is the increase in sales related to the increase in inventory? Year Inventories Net Sales 1991 \$378 1,812 1992 \$411 1,886 1993 \$452 1,954 1994 \$491 2,035.

### Allocating Costs in a Process System

See the attached file. Allocating costs in a Process Costing System. Moreno Corporation, a manufacturer of diabetic testing kits, started November production with \$75,000 in beginning inventory. During the month, the company incurred \$420,000 of materials cost and \$240,000 of labor cost. It applied \$165,000 of overhead co

### Work in Progress Inventory: Process Costing

Passage for Questions 1-4: The direct labor rate for McGregor's Company is \$9.00 per hour, and manufacturing overhead is applied to products using a predetermined overhead rate of \$6.00 per direct labor hour. During May, the company purchased \$60,000.00 in raw materials (all direct materials) and worked 3,200 direct labor hours.

### Comprehensive cycle problem: perpetual system

At the beginning of 2005, the C. Eaton Company had the following balances in its accounts: Cash \$6,500 Inventory \$9,000 Retained Earnings \$15,500 During 2005, the company experienced the following events. 1. Purchased inventory with a list price of \$3,000 on account from

### Financial problems

Ardmore Farm and Seed has an inventory dilemma. It has been selling a brand of very popular insect spray for the past year. It has never really analyzed the costs incurred from ordering and holding the inventory and currently faces a large stock of the insecticide in the warehouse. Ardmore estimates that it costs \$25 to place an

### Lower-of-Cost-or-Market- Journal Entries & Retail Inventory Method

Please Help. I am studying and don't understand the following exercises... E9-4 (Lower-of-Cost-or-Market?Journal Entries) Corrs Company began operations in 2007 and determined its ending inventory at cost and at lower-of-cost-or-market at December 31, 2007, and December 31, 2008. This information is presented below.

### Calculate FIFO and LIFO using perpetual and periodic inventory methods

FIFO and LIFO?Periodic and Perpetual) The following is a record of Pervis Ellison Company's transactions for Boston Teapots for the month of May 2007. May 1 Balance 400 units @ \$20 May 10 Sale 300 units @ \$38 12 Purchase 600 units @ \$25 20 Sale 540 units @ \$38 28 Purchase 400 units @ \$30 Instructions Assuming that

### Calculate Beginning Works in Process Inventory

Aug1 Aug 31 Raw Mat Inventory 6592 WIP Inventory 12,731 Finished Goods Inventory 21,726 31,313 Sales 31,313 Manu Ov 40,366 Dir Labor 71,180 Purchase Raw Mat 77,308 Adm Expenses 36,793 COGM 193,132 Raw Mat Used in Pro 73,957 Selling Expenses 12,455

### Inventory Cost Flows and Net Income

Dave's Electronics had the following inventory transactions during January: Jan. 1: Beginning Inventory 1,500 units @ \$9 each = \$13,500 Jan. 15: Purchase 2,000 units @ \$8 each = \$16,000 Jan. 21: Sold 2,700 units @ \$12 each Jan. 22: Purchase 3,000 units @ \$7 each = \$21,000 Jan. 30: Sold 2,000 u

### JIT Inventory Management for Grant Company

Grant Company began the year with \$870,000 of raw materials inventory, \$1,390,000 of work-in-progress inventory, and \$620,000 of finished goods inventory. During the year, the company purchased \$3,550,000 of raw material and used \$3,720,000 of raw materials in production. Labor used in production for the year was \$2,490,000. Ove

### Inventory using weighted average, FIFO and LIFO

The Dance Company sells ballet shoes. It began in 20X6 with a beginning inventory of 1,000 shoes at a cost of \$10 each and made the following purchases during the year: February 7 Purchased 3,500 shoes @ \$11.50 each May 19 Purchased 4,700 shoes @ \$12.00 each September 3 Purchased 2,300 shoes @ \$13.00 each The ending in

### Estimating Inventory Shortages Using Historical Amounts

Mark Knight, owner of Knight 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 2009 and 2010: 2009: 2010: Net Sales \$140,000 \$200,000 Cost of goods sold 6

### CGS and inventory, FIFO, LIFO, Wgted average, income stmt

The accounting records of Brooks Photography, Inc., reflected the following balances as of January 1, 2012: Cash \$19,000 Beginning Inventory 6,750 (75 units \$90) Common Stock 7,500 Retained Earnings 18,250 The following five transactions occurred in 2012: 1. First purchase (cash) 100 units @ \$92 2. Second purchase (ca

### Inventory Conversion Problems

IN CLASS PROBLEMS: Class, the following data applies to all four problems. Good Luck with them! . The Textile Corporation has an inventory conversion period of 45 days, a receivables collection period of 36 days, and payables deferral period of 35 days. . 1) What is the length of the firm's cash conversion cycle? . 2) If

### ACC 423: fair value method, accounting change, inventory errors, deferred tax

Please see the attached file. 1. Dane, Inc., owns 35% of Marin Corporation. During the calendar year 2007, Marin had net earnings of \$300,000 and paid dividends of \$30,000. Dane mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. What effect would this have on the in

### Auditing: confirmations, fraud awareness, inventory, cash controls; Green Corp audit

1. Which of the following is ordinarily considered "extended procedure" in external auditors' independent audits of financial statements? A. Send positive confirmations on recorded customer accounts receivable balances. B. Perform physical observation and test count during the client's inventory taking. C. Measure the tim

### Borrowing amount / inventory

This should not take more than half an hour to complete. 1. Canal Street Financing Corporation needs to borrow long term funds but would prefer not to show more than \$ 100 million in face amount of debt outstanding. It also prefers to pay an annual coupon, in the European style, of not more than 6% per annum. Canal's banker

### Ratio analysis & EOQ calculations

Assuming a 360-day year, claculate what average investment in inventory would be for a firm, given the following information in each case. A.) The firm has sales of 600,000, a gross profit margin of 10 percent, and an inventory trunover ratio of 6. B.) The firm has a cost-of-goods-sold figure of \$480,000 and an average age

### Pale Company was established on January 1, 20X1. Along with other assets, it immediately purchased land for \$80,000, a building for \$240,000, and equipment for \$90,000. On January 1, 20X5, Pale transferred these assets, cash of \$21,000, and inventory costing \$37,000 to a newly created subsidiary, Bright Company, in exchange for 10,000 shares of Bright's \$6 par value stock. Pale uses straight-line depreciation and useful lives of 40 years and 10 years for the building and equipment, respectively, with no estimated residual values.

Pale Company was established on January 1, 20X1. Along with other assets, it immediately purchased land for \$80,000, a building for \$240,000, and equipment for \$90,000. On January 1, 20X5, Pale transferred these assets, cash of \$21,000, and inventory costing \$37,000 to a newly created subsidiary, Bright Company, in exchange for

### Lampley Company: Breakeven Calculations

The Lampley Company has 2,000 obsolete items in its inventory which are valued at \$22 each. If the item are reworked they could be sold for \$30 each otherwise they would be sold for only \$5 each. If Lampley Company decides to re-work the items, how much should the company be willing to invest to ensure that they would at least b

### Expected Sales, Carrying Costs, Ordering Costs

Higgins Athletic Wear has expected sales of 22,500 units a year, carrying costs of \$1.50 per unit, and an ordering cost of \$3 per order. a) What is the economic order quantity? b) What will be the average inventory? The total carrying cost? c) Assume an additional 30 units of inventory will be required as safety stock. Wha

### Three systems for controlling inventory

Discuss three systems for controlling inventory and the advantages and disadvantages of each.

### Items in a Merchandise Inventory

Identify the items that are included in merchandise inventory. (Address the special situations of goods in transit, consigned goods, and damaged goods.)

### Inventory Accounting, FIFO and Aftertax Income

Please see the attached Income statement. The firm uses FIFO inventory accounting. a) Assume in 2009 the same 10,000-unit volume is maintained, but that the sales price increases by 10 percent. Because of FIFO inventory policy, old inventory will still be charged off at \$10 per unit. Also assume that seliing and administrativ

### Questions: Accrued revenue distortion, plant assets, adjusting entries, CPA president, inventory turnover, self-constructed assets

1. How does failure to record accrued revenue distort the financial reports? If an annual financial report is in error (distorted) what action should be taken? 2. What are the major characteristics of plant assets? Are plant assets necessarily confined to a manufacturing plant? 3. Why is it necessary to make adjusting

### Gertup Inventory Turnover Calculation: How much cash would be freed up?

Below is selected data for Gertup Corporation as of 12/31/05: Total assets \$ 5,500 Current assets 2,750 Long-term debt 450 Current ratio 2.5 Inventory 1,500 For year ended 12/31/05 Sales \$20,000 Cost of goods sold 16,000 Gertup has maintained the same inventory levels throughout 2005. If end of year inventory

### Calculating Cash Freed Up After Inventory Turnover Increase

Below is selected data for Gertup Corporation as of 12/31/05: Total assets \$ 5,500 Current assets 2,750 Long-term debt 450 Current ratio 2.5 Inventory 1,500 For year ended 12/31/05 Sales \$18,500 Cost of goods sold