Please just answer question 3 Inventory Principles1. Shepherd Cycles used the FIFO inventory method in 2010. Shepherd Cyclesplans to continue using the FIFO method in future years.A. Which inventory principle is most relevant to Shepherd's decision?Enter answer here.2. Shepherd Cycles does not expect prices to change dramatically and wantsto use a method that averages price changes.B. Which inventory method would best meet Shepherd's goal?Enter answer here.C. What if Shepherd wanted to expense out the newer purchases of goodsinstead? Which inventory would best meet that need?Enter answer here.3. Refer to the information below that shows Boston Cycles' inventory datafor the year ending December 31, 2011. Answer the following questions:• Assume that the ending inventory was accidentally overstated by $2,200.Enter answer here.• What are the correct amounts for cost of goods sold and gross profit?Enter answer here.Main DescriptionSecondary DescriptionAmountSales revenue$46,000Cost of goods sold:Beginning inventory$5,400Net purchases$26,700Cost of goods available $32,100|Less: Ending inventory($3,600)Cost of goods sold$28,500Gross profit$17,500

Overstatement of ending inventory will decrease cost of goods sold and will increase gross profit in…

3. Refer to the information below that shows Boston Cycles' inventory data for the year ending December 31, 2011. Answer the following questions: Assume that the ending inventory was accidentally overstated by $2,200. Enter answer here. What are the correct amounts for cost of goods sold and gross profit? Enter answer here. Main Description Secondary Description Amount Sales revenue $46,000 Cost of goods sold: Beginning inventory $5,400 Net purchases $26,700 Cost of goods available $32,100| Less: Ending inventory ($3,600) Cost of goods sold $28,500 Gross profit $17,500

3. Refer to the information below that shows Boston Cycles' inventory data for the year ending December 31, 2011. Answer the following questions: Assume that the ending inventory was accidentally overstated by $2,200. Enter answer here. What are the correct amounts for cost of goods sold and gross profit? Enter answer here. Main Description Secondary Description Amount Sales revenue $46,000 Cost of goods sold: Beginning inventory $5,400 Net purchases $26,700 Cost of goods available $32,100| Less: Ending inventory ($3,600) Cost of goods sold $28,500 Gross profit $17,500

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 25CE: Effects of Inventory Costing Methods Refer to your answers for Filimonov Inc. in Cornerstone...

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Inventory Purchase Price Volatility In 2019, Steel Technologies Inc. changed from the LIFO to the FIFO method for its inventory costing. Steel Technologies' annual report indicated that this change had been instituted because the price at which the firm purchased steel was highly volatile. Required: Explain how FIFO cost of goods sold and ending inventory would be different from LIFO when prices are volatile.
Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was recorded in the accounting records at $17,800. Due to technological changes in the market, Garcia would be able to replace its inventory for $16,500. Required: 1. Using the lower of cost or market method, what amount should Garcia report for inventory on its balance sheet at the end of the year? 2. Prepare the journal entry required to value the inventory at the lower of cost or market.
Effects of Inventory Costing Methods Refer to your answers for Filimonov Inc. in Cornerstone Exercises 6-22 through 6-24. Required: 1. In a period of rising prices, which inventory costing method produces the highest amount for ending inventory? 2. In a period of rising prices, which inventory costing method produces the highest net income? 3. In a period of rising prices, which inventory costing method produces the lowest payment for income taxes? 4. In a period of rising prices, which inventory method generally produces the most realistic amount for cost of goods sold? For inventory? Would your answer change if inventory prices were decreasing during the period?
Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?
Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of applying the LCNRV rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows: Inventory Write-Down Use the information in E8-1. Assume that Stiles uses the LIFO cost flow assumption and is applying the LCM rule. Required: 1. What is the correct inventory value for each product? 2. Next Level With regard to requirement 1, what effect does the imposition of the constraints on market value have on the inventory valuations?
LIFO and Inventory Pools On January 1, 2016, Grover Company changed its inventory cost flow method to the LIFO cost method from the FIFO cost method for its raw materials inventory. It made the change for both financial statement and income tax reporting purposes. Grover uses the multiple-pools approach under which it groups substantially identical raw materials into LIFO inventory pools. It uses weighted average costs in valuing annual incremental layers. The composition of the December 31, 2018, inventory for the Class F inventory pool is as follows: Inventory transactions for the Class F inventory pool during 2019 were as follows: On March 2, 2019, 4,800 units were purchased at a unit cost of 13.50 for 64,800. On September 1, 2019, 7,200 units were purchased at a unit cost of 14.00 for 100,800. A total of 15,000 units were used for production during 2019. The following transactions for the Class F inventory pool took place during 2020: On January 11, 2020, 7,500 units were purchased at a unit cost of 14.50 for 108,750. On May 14, 2020, 5,500 units were purchased at a unit cost of 15.50 for 85,250. On December 29, 2020, 7,000 units were purchased at a unit cost of 16.00 for 112,000. A total of 16,000 units were used for production during 2020. Required: 1. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2019. Show supporting computations in good form. 2. Prepare a schedule to compute the cost of Class F raw materials used in production for the year ended December 31, 2019. 3. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2020. Show supporting computations in good form.
Effects of Inventory Costing Methods Refer to the information for Tyler Company above. Required: 1. Which inventory costing method produces the highest amount for net income? 2. Which inventory costing method produces the lowest amount for taxes? 3. Which inventory costing method produces the highest amount for ending inventory? 4. How would your answers to Requirements 1-3 change if inventory prices declined during the period?
Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net realizable value of 300, a normal profit margin of 35, and a current replacement cost of 250. Determine the amount per unit that should be used as the market value to apply the lower of cost or market rule to determine Blacks ending inventory.
The following data pertain to 2012 activities of Twisp Industries: Use your completed worksheet to determine the firms cost of goods sold for 2012. Remember to change the year in row 24 and to enter new beginning inventory balances. Save the 2012 file as MFG3. Print the worksheet when done. If sales and other expenses were identical in 2011 and 2012, during which year did Twisp earn more income? Why?
Inventory Write-Down The following information is taken from Aden Companys records: Required: 1. What is the correct inventory value if the company applies the LCNRV rule to each of the following? a. individual items b. groups of items c. the inventory as a whole 2. Next Level Are there any conditions under which a company may ignore the decline in the value of inventory below its cost?
The dollar-value LIFO inventory cost flow method involves computations based on A Specific Price Index for Each Year O O Inventory Pools of Similar Items G No g Yes Yes NO NO Yes Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
What critical assumptions has TESLA made to value inventory? Does TESLA use FIFO or LIFO? Explain what is LCM (the lower of cost or market) and how this may impact inventory every year.