Jan. 20 Apr. 21 July 25 Purchased Purchased Purchased Sept. 19 Purchased 330 units 80 units 220 units 70 units $ 4 = $1,320 $ 6 = $ 8 $10 = 480 1,760 700 During the year, The Shirt Shop sold 530 T-shirts for $15 each. Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
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- LIFO Liquidation Profit Hammond Company adopted LIFO when it was formed on January 1, 2017. Since then, the company has had the following purchases and sales of its single inventory item: In December 2020, the controller realized that because of an unexpected increase in demand, the company had sold 22,000 units but had purchased only 19,000 units during the year. In 2020, each unit had been sold for 19, and each unit purchased had cost 10. The income tax rate is 21%. Required: 1. Next Level If Hammond makes no additional purchases in 2020, how much LIFO liquidation profit will it report? 2. Prepare the appropriate annual report disclosures for 2020. 3. Next Level if Hammond purchases an additional 7,000 units in December 2020, how much income tax will the company save? 4. Next Level If Hammond purchases the additional 7,000 units, how much income tax has the company saved over the 4-year period by using LIFO instead of the FIFO cost flow assumption?3. Pear Company recorded the following data pertaining to one of its inventory items during January 2021. 1/1 Inventory, 800 units @ P2001/8 Purchased 200 units at P2081/21 Sold 400 units1/30 Purchased 250 units @ P210What is the moving average unit cost of this item at January 31, 2021? Round off to nearest peso? a. 201b. 210c. 230d. 20447. Vincenzo Cassano Company sells one product, which it purchases from various suppliers. The trial balance at December 31, 2020, included the following accounts: Sales (100,000 units at P150) P15,000,000 Sales discount 1,000,000 Purchases 9,300,000 Purchase discount 400,000 Freight in 100,000 Freight out 200,000 The inventory purchases during 2020 were as follows: Units Unit cost Total cost Beginning inventory, January 1 20,000 P60 P 1,200,000 Purchases, quarter ended March 31 30,000 65 1,950,000 Purchases, quarter ended June 30 40,000 70 2,800,000 Purchases, quarter ended Sept. 30 50,000 75 3,750,000 Purchases, quarter ended Dec. 31 10,000 80 800,000 150,000 P10,500,000 Vincenzo Cassano’s accounting policy is to report inventory in its financial statements at the lower of cost or market, applied to total inventory. Cost is determined under the first-in, first-out method. Vincenzo Cassano has determined that, at December 31, 2020, the replacement cost of its inventory…
- At 12/31/20, the end of Lincoln Company's first year of business, inventory was $6,100 and $5,100 at cost and at market, respectively. Following is data relative to the 12/31/21 inventory of Lincoln: Original Net Net Realizable Appropriate Cost Replacement Realizable Value Less Inventory Item Per Unit Cost Value Normal Profit Value A $ .65 $ .45 B .45 .40 C .70 .75 D .75 .65 E .90 .85 Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,500 units of each…NEEDED IN 10 MINUTES Computational. ABC sells item A as part of its product line. Information as to balances on hand, purchases, and sales of item A are given in the following table for the first six months of 20X3.Date Purchased Sold Balance of PurchaseJanuary 1 (Inventory beginning) 3,000 units @ P250PurchasesJanuary 24, 3,300 units @ P260June 11, 2,140 units @ P280SalesFebruary 8, 4,800 units @ P350March 16, 1,060 @ P350For the 6 months under weighted average cost (periodic) determine the gross profit (Sample answer: 254,360. Round off your answer to the nearest peso)31. Carla Company’s accounting records indicated the following for 2020: Inventory, January 1 5,000,000 Purchases 15,000,000 Sales 22,000,000 A physical inventory taken on December 31, 2020 resulted in an ending inventory of P5, 500,000. The gross profit on sales remained constant at 40% in recent years. Carla suspects that some inventory may have been taken by a new employee. At December 31, 2020, what is the estimated cost of missing inventory?
- 1.Siam Paragon Corp. started their business this year and purchases the following inventory: 15,000 units in January @$10 each, 25,000 units in March @ $12 each, 35,000 units in May @ $12 each, 50,000 units in August @ $14 each, 20,000 units in October @ $15 each, 30,000 unit in November @ $16 each, and 25,000 units in December @ $18 each. During the year they sold 170,000 units of their product. Required: 1.Calculate the value of ending inventory and COGS utilizing the Average Cost, LIFO, and FIFO methods. Chonburi Corp. has just purchased new equipment for their business at a cost $18,000,000. They expect the equipment to have a useful estimated life of 4 years and a terminal value of $3,000,000 . In addition they feel they can get total production from the machinery of 5,000,000 units. Actual production was as follows: year one 1,000,000 units, year two 1,500,000 units, year three 1,500,000 units, year four 1,000,000 units . Required: 1.Calculate the depreciation each year…1.Siam Paragon Corp. started their business this year and purchases the following inventory: 15,000 units in January @$10 each, 25,000 units in March @ $12 each, 35,000 units in May @ $12 each, 50,000 units in August @ $14 each, 20,000 units in October @ $15 each, 30,000 unit in November @ $16 each, and 25,000 units in December @ $18 each. During the year they sold 170,000 units of their product. Required: 1.Calculate the value of ending inventory and COGS utilizing the Average Cost, LIFO, and FIFO methods.Question 4Syarikat Layang uses the LIFO (Last-in, First-out) costing method for its perpetualinventory system. It had inventory on 1 January 2021 consisting of 400 articles boughtat RM4 each. The purchases during the month of January consisted of 800 at RM4.20each purchased on 8 January, and 2,000 at RM3.80 each on 18 January. It sold 2,400at RM5.00 each on 28 January. 40 of those sold were returned in perfect condition on31 January. The returned goods were bought on 18 January.Required: a. i. Calculate, by means of an inventory account the number and cost of the articles held in inventory during January 2021. ii. The unit price and total cost of the inventory. b. Show the trading account for the month ended 31 January 2021.
- 8. On December 28, 2020, INDIGO Company purchased goods costing ₱500,000. The terms were FOB destination. Some of the costs incurred in connection with the sale and delivery of the goods were packaging for shipment ₱10,000, shipping₱15,000, and special handling charges ₱25,000. These goods were received on December 31, 2020. On December 31, 2020, what total cost for these goods should be included in inventory? a. ₱ 510,000 b. ₱ 550,000 c. ₱ 500,000 d. ₱ 525,000CURRENT COST ACCOUNTINGProblem 38. WWW had the following transactions for the current year with respect to its inventory: On January 1, the entity purchased 50,000 units at P100 per unit. During the year, the entity sold 40,000 units at P180 per unit. The entity paid P700,000 for operating expenses. The current replacement cost of the inventory on December 31 is P150 per unit.Required: Based on the result of your audit, determine the following:1. What is the realized holding gain on inventory for 2010?2. What is the unrealized holding gain on inventory for 2010?3. What is the cost of sales to be reported under current cost accounting?.IN 10 MINUTES Computational. ABC sells item A as part of its product line. Information as to balances on hand, purchases, and sales of item A are given in the following table for the first six months of 20X3.Date Purchased Sold Balance of PurchaseJanuary 1 (Inventory beginning) 3,000 units @ P250PurchasesJanuary 24, 3,300 units @ P260June 11, 2,140 units @ P280SalesFebruary 8, 4,800 units @ P350March 16, 1,060 @ P350For the 6 months under weighted average cost (periodic) determine the cost per unit (Sample answer: 112.25. Round off your answer to 2-decimal places)