and cost indexes for 2021 and 2022 are as follows:20212022CostRetailCostRetail$105,400 $170,000430,0002,9006,200Beginning inventory622,0004,000$630,000 $792,0002,6006,000PurchasesPurchase returns2,450Freight-inNet markupsNet markdowns5,1504,150500,00014,4001,9008,6006,400690,00014,4005,300Net sales to customersSales to employees (net of 20% discount)Normal spoilagePrice Index:January 1, 2021December 31, 2021December 31, 20221.001.041.20Problem 9-13 (Algo) Part 1Required:1. Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail method.Answer is complete but not entirely correct.20212022Estimated ending inventory at retail24351,800 X $483,400 XEstimated ending inventory at cost24342,650 X $645,590 XEstimated cost of goods sold24502,983 X $143,500 X Problem 9-13 (Algo) Retail inventory method; various applications [LO9-3, 9-4, 9-5][The following information applies to the questions displayed below.]On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail,and cost indexes for 2021 and 2022 are as follows:2022Retail2021CostRetailCostBeginning inventoryPurchases$105,400 $170,000430,0002,9006,200$630,000 $792,0002,6006,000622,0004,000Purchase returns2,450Freight-inNet markupsNet markdowns8,6006,400690,00014,4005,3005,1504,150500,00014,4001,900Net sales to customersSales to employees (net of 20% discount)Normal spoilagePrice Index:January 1, 2021December 31, 2021December 31, 20221.001.041.20Problem 9-13 (Algo) Part 1Required:1. Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail method.X Answer is complete but not entirely correct.20212022Estimatedending inventory at retail351.800 xS483 400 X

Cost indeXes are as 2021 Cost Retail Cost $105,400 $170,000 430,000 2,900 6,200 inning inventory chases 622,000 4,000 $630,C 2,6 6,0 chase returns ight-in markups markdowns 5,150 4,150 500,000 14,400 1,900 sales to customers es to employees (net of 20% discount) mal spoilage ce Index: anuary 1, 2021 1.00

Cost indeXes are as 2021 Cost Retail Cost $105,400 $170,000 430,000 2,900 6,200 inning inventory chases 622,000 4,000 $630,C 2,6 6,0 chase returns ight-in markups markdowns 5,150 4,150 500,000 14,400 1,900 sales to customers es to employees (net of 20% discount) mal spoilage ce Index: anuary 1, 2021 1.00

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 5MC: The moving average inventory cost flow assumption is applicable to which of the following inventory...

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Similar questions

( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory system, what is the cost of ending inventory under LIFO at April 30? a. $32,800 b. $38,400 c. $63,600 d. $69,200
(Appendix 8.1) Inventory Write-Down The following are the inventories for the years 2019, 2020, and 2021 for Parry Company: Required: 1. Assume the inventory that existed at the end of each year was sold in the subsequent year. Prepare journal entries to record the lower of cost or net realizable value for each of the following alternatives: a. allowance method, periodic inventory system b. direct method, periodic inventory system 2. Next Level Refer to your answer for P8-2. How does the use of the periodic inventory system affect the write-down of inventory to the lower of cost or net realizable value?
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?
Refer to the information for Morgan Inc. above. If Morgan uses a perpetual inventory system, what is the cost of ending inventory under FIFO at April 30? a. $32,500 b. $38,400 c. $63,600 d. $69,500
(Appendix 8.1) Inventory Write-Down The inventories of Berry Company for the years 2019 and 2020 are as follows: Berry uses the periodic inventory method and the FIFO inventory cost flow assumption. Required: 1. Assume the inventory that existed at the end of 2019 was sold in 2020. Prepare the necessary journal entries at the end of each year to record the correct inventory valuation if Berry uses the: a. direct method b. allowance method 2. Next Level Refer to your answer for E8-6. How does the use of a periodic or perpetual inventory system affect the valuation of inventory?
RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of inventory on credit with payment terms of 1/15, net 45. Using the net price method, prepare journal entries to record Johnsons purchases on October 23 and the subsequent payment on October 31. Using the information from RE7-8, prepare journal entries to record Johnsons purchase on October 23 and the subsequent payment on November 30.
Inventory analysis Costco Wholesale Corporation (COST) and Wal-Mart Stores Inc. (WMT) compete against each other in general merchandise retailing, gas stations, pharmacies, and optical centers. Below is selected financial information for both companies from a recent year's financial statements (in millions): a. Determine for bom companies (1) the inventory turnover and (2) the days' sales in inventory. Round to one decimal place. b. Compare and interpret the inventory metrics computed in (a).
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.
(Appendix 8.1) Inventory Write-Down Frost Companys inventory records tor the years 2019 and 2020 reveal the cost and market of the January 1, 2019, inventory to be 125,000. On December 31, 2019, the cost of inventory was 130,000, while the market value was only 128,000. The December 31, 2020, market value of inventory was 140,000, and the cost was only 135,000. Frost uses a periodic inventory system. Purchases for 2019 were 100,000 and for 2020 were 110,000. Required: 1. Assume the inventory that existed at the end of 2019 was sold in 2020. Prepare the journal entries at the end of 2019 and 2020 to record the lower of cost or net realizable value under the (a) allowance method and (b) direct method. 2. Prepare the cost of goods sold section of the income statement and show how the company would record the inventory on its balance sheet for 2019 and 2020 under the (a) allowance method and (b) direct method. 3. Next Level Refer to your answer for P8-3. How does the use of a periodic inventory system versus a perpetual inventory system affect the valuation of inventory and the amount reported as income?
Inventory Errors McLelland Inc. reported net income of $175,000 for 2019 and $210,000 for 2020. Early in 2020, McLelland discovers that the December 31, 2019 ending inventory was overstated by $20,000. For simplicity, ignore taxes. Required: 1. What is the correct net income for 2019? For 2020? 2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, 2019? At December 31, 2020?
( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory system, what is the cost of goods sold under FIFO at April 30? a. $32,800 b. $38,400 c. $63,600 d. $69,200
Webster Company adopted do liar-value LIFO on January 1, 2019. Webster produces three products: X, Y, and Z. Websters beginning inventory consisted of the following: During 2019, Webster had the following purchases and sales: Required: 1. Compute the LIFO cost of the ending inventory assuming Webster uses a single inventory pool. Round cost index to 4 decimal places. 2. Compute the LIFO cost of the ending inventory assuming Webster uses three inventory pools. Round cost indexes to 4 decimal places.