Based on physical inventory at year-end, Cherry Company determined the chocolate inventory on a FIFO basis at P2,600,000 with a replacement cost of P2,500,000. Cherry Company estimated that, after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. What amount should be reported as chocolate inventory at year-end?   a. P2,400,000 b. P2,800,000 c. P2,600,000 d. P2,500,000

Q: The following lots of a particular commodity were available for sale during the year Beginning…

A: The stock of items in which firm deals are recorded as inventory in the books of the firm. The…

Q: Moss Co. has determined its year-end inventory on a FIFO basis to be $400,000. Information…

A: Given:Estimated selling price = $408,000Estimated costs to sell = $20,000

Q: Annanina Company reported the following information for the current year:   Beginning inventory…

A: Cost of goods available for sale is calculated by adding the cost of purchases with the beginning…

Q: Kylah Enterprises began the current month with inventory costing $10,000, then purchased inventory…

A: Perpetual Inventory System is maintained on a continual basis or perpetual record is maintained for…

Q: A company reports the following: Cost of goods sold $335,070 Average inventory 74,460 Determine (a)…

A: Inventory turnover ratio means the number of times a company turns its inventory into sales. The…

Q: Win Company, which uses the FIFO inventory method, had 300,000 units in inventory at the beginning…

A: The correct option is  C. $5,000,000

Q: A recent annual report of Gateway $2000 , Inc. , shows : cost of goods sold. $4,072; inventory at…

A: Operating cycle is the number of days required to receive Inventory, sale of Inventory and…

Q: Seven Sea Corporation sells Ovens for an average of OMR 50, and which cost OMR 25. This is a…

A: The ending inventory is the inventory left with the business at year end.

Q: A company adopted the LIFO method when its inventory was $1,800. One year later its ending inventory…

A: Value of inventory: One Year Later Value of ending inventory = ($ 1,800 X 1.00) + ($ 200 X 1.05)…

Q: The cost of goods sold for Veltron International last year amounted to $547,800, and the average…

A: The question is related to Ratio Analysis. Inventory turnover is calculated with the help of…

Q: Handbags, Inc. had 200 units of inventory on hand at the end of the year. These were recorded at a…

A: As per lower-of-cost-or-market rule Inventory will be recorded at lower of cost or market value.

Q: Win Company, which uses the FIFO inventory method, had 300,000 units ih inventory at the beginning…

A: Given, Company follows FIFO method;   Beginning Inventory = 300000 units Costing $ 50 each Details…

Q: Rizza Co. has an average age of inventory equal to 25 days. If its end of year inventory level is…

A: Average age of inventory = 25 days  Inventory level = P8,500

Q: a. EFG reports annual sales of $ 30 million. Annual costs of goods sold is $ 15 million. Inventory…

A: Inventory refers to the goods or items which are stored by the business either for selling or for…

Q: Rizza Co. has an average age of inventory equal to 25 days. If its end of year inventory level is…

A: Inventory days is a concept in costing that shows how much time it takes the firm to sale its…

Q: Seven Sea Corporation sells Ovens for an average of OMR 50, and which cost OMR 25. This is a…

A: This method is generally used by retailers to estimate ending inventory.   Under this method…

Q: Dabble, Inc. has sales of $980,000 and cost of goods sold of $640,000. The firm had an average…

A: The formula to compute days sales in inventory as follows:

Q: According to a FIFO calculation, Montana Co. estimated its year-end inventory to be worth $649,000.…

A: As per inventory valuation method, the finished goods inventory on balance sheet are carried at…

Q: The annual inventory requirement at the C &E Enterprises is P2,500 units. Each inventory item has a…

A: The annual inventory requirement at the C &E Enterprises is P2,500 units. Each inventory item…

Q: Tristan, Inc., uses the LIFO cost-flow assumption to value inventory. It began the current year with…

A: Particulars No. of units Rate per unit Total cost 9,500 units sold 8,000 $40 $320,000…

Q: Vibrant Company had $850,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased…

A:

Q: At year-end, Delectable Company experienced a storm surge which caused severe damage to the entire…

A: Formula: Cost of good sold = Net Sales - Gross profit.

Q: The following information for Dorado Corporation relates to the three-month period ending September…

A: 1. Cost of goods sold (LIFO) = 400,000 units purchased at $24 each + 25,000 units from beginning…

Q: Vibrant Company had $950,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased…

A: The gross profit is calculated as difference between sales and cost of goods sold. Cost of goods…

Q: A retailer has annual sales of $500,000 and an average finished-goods inventory of$15,000. If the…

A: Introduction: Inventory turnover ratio is defined as the number of times a business would sell or…

Q: At the end of January, Mineral Labs had an inventory of 905 units, which cost $13 per unit to…

A: Under the LIFO method, the inventory which has been purchased most recently is sold first and under…

Q: The cost of goods sold for Veltron International last year amounted to $547,800, and the average…

A: Inventory turnover refers to the rate at which the inventory in the company is sold, used, and…

Q: The cost of goods sold for Veltron International last year amounted to $534,600, and the average…

A: The inventory turnover ratio can be calculated by dividing the cost of goods sold by average…

Q: The King Corporation has ending inventory of $386,735, and cost of goods sold for the year just…

A: Calculate the inventory turnover as follows:

Q: Based on a physical inventory taken on December 31, 2020, ABC Co. determined its chocolate inventory…

A: As per the Lower of Cost or Net Realizable Value Rule the inventory will be valued at the lower of…

Q: Endor Company begins the year with $90,000 of goods in inventory. At year-end, the amount in…

A: Inventory Turnover Choose Numerator:     /  Choose Denominator:    = Inventory Turnover Cost of…

Q: At year-end 20X8, Ancho Canned Chile has 8,000 units on hand at a weighted-average cost of $13 per…

A: Ending inventory is computed by adding the beginning inventory and purchases and then subtracting…

Q: What is the average age of inventory for Patsy if it has sales of P320,000, an average inventory of…

A: The average age of inventory is calculated as daus in year divided by inventory turnover ratio.

Q: Nord Store’s perpetual accounting system indicated ending inventory of $20,000, cost of goodssold of…

A: Cost of inventory Shrinkage = Inventory as per records - Physical count inventory Gross profit =…

Q: Vaughn Manufacturing began using dollar-value LIFO for costing its inventory two years ago. The…

A: Solution: Computation of inventory at base year prices and change from prior year - David Davis…

Q: End of Year data suggests that noise Ltd. has 6000 items of product A and 2,000 of product B,…

A: Lets understand the basics. As per IAS 2 "Inventories", inventory needs to be valued at the cost of…

Q: The following information for Quadrado Corporation relates to the three-month period ending…

A: Formula: Gross profit = Sales - cost of goods sold

Q: Freedman Company estimates that sales this year of $12,000 will be returned next year and customers…

A: When a sales return occurs, perpetual inventory system requires recognition of the inventory's…

Q: Tefft Industires has an average inventory of $170,000, sells on term of 2/10, net 30, and its cost…

A: Inventory conversion period is the number of days in which the inventory is stored before being sold

Q: Epsilon Corp. reported the following information for the current year: Beginning inventory..…

A: Working note: Computation of cost of inventory out on consignment: Inventory out on…

Q: The cost of goods sold for Home Depot last year amounted to $3,536,800 and the average inventory at…

A: Inventory turnover: It is the rate at which the company sells its inventory. Calculating inventory…

Q: Based on physical inventory at year-end, Cherry Company determined the chocolate inventory on a FIFO…

A: Inventory is reporter at Lower of Cost of Net realizable value. where, Net relizable value =…

Q: Anthony Corporation reported the following amounts for the year:           Net sales $ 296,000…

A: Inventory turnover = Cost of goods sold / Average inventory = $138,000/50000 = 2.76

Q: In December year 1, Johnny corporation produced three products that it still has in inventory at…

A: Inventory refers to the stock that the company held for resale purposes or which is not sold in the…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.