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# Inventory

### Calculate and explain inventory turnover, accounts receivable turnover

- How is inventory turnover calculated? - Explain how inventory turnover affects the amount of cash that must be invested in inventory. - How is accounts receivable turnover calculated? - Explain how accounts receivable turnover affects the amount of cash that must be invested in accounts receivable. - Assuming that

### Gross profit/ending inventory and Schedule of Cash Receipts

Gross profit and ending inventory A corporation produces a product with following costs as of July 1, 2011. Material \$2 per unit Labor \$4 per unit Overhead \$2 per unit Beginning inventory at these costs on July 1st was 3,000 units. From July 1 to December 1, 2011 the corporation produced 12,000 units. These units had a ma

### Job Order Costing System: Compute WIP Inventory

Garcia, Inc. uses a job-order costing system for its products, which pass from the Machining Department, to the Assembly Department, to finished-goods inventory. The Machining Department is heavily automated; in contrast, the Assembly Department performs a number of manual-assembly activities. The company applies manufacturing o

### Cost of Direct Materials, Goods Completed, WIP Inventory

Goodson Corporation assembles various components used in the telecommunications industry. The company's major product, a relay switch, is the result of assembling three parts: XY634, AA788, and GU321. The following information relates to activities of April: Beginning work-in-process inventory: 4,000 units, 75 percent compl

### Periodic and perpetual inventory systems and inventory costing methods

See attached file for proper format of the table. P. 2 periodic inventory system and inventory costing methods The inventory of Product PIT and data on purchases and sales for a two-month period follow. The company closes its books at the end of each month. It uses the periodic inventory system. Apr. 1 Beginning inve

### Accounting Concepts of Classification, Balances, Cash Balance

See attached file for proper format of tables. 1. For each of the following, indicate whether the transaction affects a revenue account, an expense account, the Retained Earnings account or the Common Stock account. 1. Made an investment to start the business. 2. Billed customers for services performed. 3. Paid monthly re

### Finding the Cost of Inventory

Donnelly Manufacturing sells cedar birdhouses. The company has prepared the following forecast for the third quarter of 2009: July 5,000 units August 6,000 units September 10,000 units Inventory at June 30, 2009 was budgeted at 1,000 units. Management would like the desired quantity of fi

### Inventory methods and adjusting entries

P10-8 (Nonmonetary Exchanges) Susquehanna Corporation wishes to exchange a machine used in its operations. Susquehanna has received the following offers from other companies in the industry. 1. Choctaw Company offered to exchange a similar machine plus \$23,000. (The exchange has commercial substance fo

### Method resulting in the highest inventory

In a period when inventory costs are rising, the inventory method that most likely results in the highest ending inventory is: 1. Lower-of-cost-or-market method. 2. Average cost. 3. FIFO. 4. LIFO.

### Ending balance of inventory for Julia & Co assuming that it uses FIFO

The following information pertains to Julia & Co.: March 1. Beginning inventory = 30 units @ \$5 March 3. Purchased 15 units @ \$4 March 9. Sold 25 units @ \$8 What is the ending balance of inventory for Julia & Co assuming that it uses FIFO? 1. \$125 2. \$100 3. \$110 4. \$85

### All of the following are true with regard to both inventory and also with regard to property, plant, and equipment, except: 1. Both sets of assets are tangible. 2. For both sets of assets, cost is not reflected on the income statement until the asset is sold or otherwise disposed of. 3. Both sets of assets are generally presented on the financial statements at cost rather than at fair value. [Note that "fair value" is generally the price that the item can be sold for on the balance sheet date.] 4. Both sets of assets may be written down if the fair value is less than cost.

All of the following are true with regard to both inventory and also with regard to property, plant, and equipment, except: 1. Both sets of assets are tangible. 2. For both sets of assets, cost is not reflected on the income statement until the asset is sold or otherwise disposed of. 3. Both sets of assets are genera

### The December 31, 2004 inventory of Dwyer Company consisted of four products, for which certain information is provided below. Product Original Replacement Estimated Expected Normal Cost Cost Disposal Selling Profit Cost Price on Sales A \$35.00 \$32.00 \$6.50 \$50.00 15% B \$52.00 \$51.00 \$10.00 \$60.00 25% C \$140.00 \$135.00 \$25.00 \$200.00 30% D \$24.00 \$21.00 \$3.00 \$35.00 20% INSTRUCTIONS: 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, 2004.

The December 31, 2004 inventory of Dwyer Company consisted of four products, for which certain information is provided below. Product Original Replacement Estimated Expected Normal Cost Cost Disposal Selling Profit

### Comprehensive Receivables Problem; Dollar-Value LIFO

P7-10 (Comprehensive Receivables Problem) Connecticut Inc. had the following long-term receivable account balances at December 31, 2006. Note receivable from sale of division \$1,800,000 Note receivable from officer 500,000 Transactions during 2007 and other information relating to Connecticut's long-term rec

### Estimate Inventory on Hand to Determine the Amount of Theft Loss

An inventory taken the morning after a large theft discloses \$55,000 of goods on hand as of March 12. The following additional data is available from the books: Inventory on hand, March 1 \$84,000 Purchases received, March 1-11 \$70,000 Sales (goods delivered to customers) \$104

### Eller Company: Compute the inventory at December 31, 2007, 2008, 2009, using the dollar-value LIFO method for each year.

Eller Company manufactures one product. On December 31, 2006, Eller adopted the dollar-value-value LIFO inventory method. The inventory on that date using the dollar value LIFO inventory method was \$250,000. Inventory data are as follows: Year Inventory at year-end prices price index (base year 2002)

### Inventory Using FIFO and LIFO

Compute inventory and cost of goods sold using FIFO and LIFO Andrea's Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. information relating to Andrea's purchase of Xpert snowboards during September is shown below. During the same month, 121 Xpert snowboards were sold. Andrea's uses a periodic inven

### Compute Press Corporation Depreciation

3. Press Corporation purchased a truck for \$40,000. The company expected the truck to last four years or 100,000 miles, with an estimated residual value of \$4,000 at the end of that time. During the first year, the truck was drive 27,500 miles. Compute the depreciation for the first year under each of the following methods: (a

### Compute Tedesco's CGS, ending inventory; Bank reconciliation for Crawford Company

1. Tedesco Company's beginning inventory and purchases during the month of October were as follows: Oct. 1 Beginning inventory 100 units @ \$20 Oct. 5 Purchases 100 units @ \$22 Oct. 15 Purchases 100 units @ \$24 Oct. 20 Purchases 100 units @ \$26 Tedes

### Whether the Item Should be Included in Ending Inventory

For each of the transactions,specify whether the item in question should be included in ending inventory, and if so, at what amount. For each item that is not included in ending inventory, indicate who owns it and what account, if any, it should have been recorded in. See attached file.

### Which method of accounting, periodic or perpetual, for inventory would you choose for a retail store that you managed.

1 Which method of accounting, periodic or perpetual, for inventory would you choose for a retail store that you managed. Make your choice and explain why you made it. Narratives about your prior or current experience with inventory are welcome. 2 With the adoption of international accounting standards, the LIFO inv

### FIFO and LIFO are explicated.

FIFO and LIF0 Analyze the following scenario: The Hospital for Ordinary Surgery uses pharmaceuticals for its patients. It started the year on January 1, with an inventory of 1,000 doses of an antibiotic drug that cost \$17 per dose. On January 2, it purchased another 300 does for \$21 each. From January 3 through June 30 it u

### Request for Proposal (RFP) for catalog seed company

I sell seeds from a catalog, and business is good. However, my inventory tracking system is not adequate. When busy we have seen supply outages and customers complain about delays. I worry about the business folding unless something is done and soon. I want to hire a management consultant to design a new inventory tracking sys

### Sales: Critical questions before opening new distribution channels for excess inventory

An overoptimistic sales forecast has resulted in excess inventory sitting idle at a company's warehouse. As the manager of the company, my job is to troubleshoot the problem and get results. My instinctive reaction is to open up new channels of distribution. I need to come up with five critical questions I should ask myself befo

### Determine the amount of cost in the Raw Materials, Work in Process, and Finished Goods Inventory as of the date of the storm

Top Switch Inc. designs and manufactures switches used in telecommunications. Serious flooding throughout the state of Tennessee affected Top Switch's facilities. Inventory was completely ruined, and the company's computer system, including all accounting records, was destroyed. Before the unfortunate incident, recovery speci

### Sample of inventory cost flow assumptions

See the attached Excel worksheet. Complete the worksheet and answer the following questions: Which inventory cost flow assumption produces the most net income? Which inventory cost flow assumption produces the least net income? And why between these two answers. Which inventory cost flow assumption produces the highest

### LIFO/FIFO

Model Inventory Purchase Invoices Inventory Costs Jan 1 1st 2nd 3rd Dec 31st BB900 27 at \$213 21 at \$215 18 at \$222 18 at \$225 30 C911 10 at 60 6 at 65 2 at 65

### PV and Inventory problems

Problem #1 Sales are \$112,000 COGS are 88% Gross Margin \$ are: \$13,440 I think this is correct-----please confirm Problem #2 Expense for January are \$140,000 This expense is expected to increase 1.5% each month for the next 6 months What is the cumulative expense on June 30 140,000 x (1.015)^6 140,000 x 1.09344912

### Preparing an inventory purchases budget

Jan Feb Mar Budgeted cost of goods sold \$70,000 \$74,000 \$80,000 Plus: Desired ending inventory 7,400 ? ? Inventory needed \$77,400 ?

### Problem 14-3A, Cost classification and explanation, Problem 14-8A, Manufacturing and income statements, inventory analysis

Problem 14-3A Cost classification and explanation Assume that you must make a presentation to the marketing staff explaining the difference between product and period costs. Your supervisor tells you the marketing staff would also like clarification regarding prime and conversion costs and an explanation of how these terms fit

### Dollar LIFO for Norman Television

Norman's Televisions produces television sets in 3 categories: portable, midsize , and flat-screen. On Jan 1, 2010, Norman adopted dollar value LIFO and decided to use a single inventory pool. Jan 1 inventory is: Category Quantity cost per Unit Total Cost Portable 6,000