Inventory Write-DownThe following information for Tuell Company is available:Case245Cost$5.00 $5.00 $5.00 $5.00 $5.00Net realizable value5.205.504.904.30 4.7ONet realizable value less normal profit4.905.304.804.004.60Replacement cost5.305.204.604.154.80Required:1. Assume Tuell uses the LIFO cost flow assumption. What is the correct inventory value in each of the preceding situations under U.s. GAAP? If required, round your answers to the nearest cent.InventoryCasevalue1242.243452. Assume Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? If required, round your answers to the nearest cent.InventoryCasevalue124342$5$43. Assume that Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations if Tuell uses IFRS? If required, round your answers to the nearest cent.InventoryCasevalue1$42243%2445$4

The LIFO approach used the lower of the cost or market value within US GAAP, while the other…

The following information for Tuell Company is available: Case 1 2 4 5 Cost $5.00 $5.00 $5.00 $5.00 $5.00 Net realizable value 5.20 5.50 4.90 4.30 4.70 Net realizable value less normal profit 4.90 5.30 4.80 4.00 4.60 Replacement cost 5.30 5.20 4.60 4.15 4.80 Required: 1. Assume Tuell uses the LIFO cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? If required, round your answers to the nearest cent. Inventory Case value 2

The following information for Tuell Company is available: Case 1 2 4 5 Cost $5.00 $5.00 $5.00 $5.00 $5.00 Net realizable value 5.20 5.50 4.90 4.30 4.70 Net realizable value less normal profit 4.90 5.30 4.80 4.00 4.60 Replacement cost 5.30 5.20 4.60 4.15 4.80 Required: 1. Assume Tuell uses the LIFO cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? If required, round your answers to the nearest cent. Inventory Case value 2

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 64E: ( Appendix 6B) Inventory Costing Methods: Periodic System Harrington Company had the following data...

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( 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
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?
( 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
Perpetual inventory using FIFO Beginning inventory, purchases, and sales for Item Zeta9 are as follows: Oct. 1 Inventory 175 units at 30 7 Sale 155 units 15 Purchase 200 units at 33 24 Sale 140 units Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (A) the cost of goods sold on October 24 and (B) the inventory on October 31.
Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of December 31 follows: Description Inventory Quantity Market Value per Unit (Net Realizable Value) A54 37 56 C77 24 178 F66 30 132 H83 21 545 K12 375 5 Q58 90 18 S36 8 235 V97 140 20 Y88 17 744 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Description Last Purchases Invoice Next-to-the-Last Purchases Invoice Quantity Purchased Unit Cost Quantity Purchased Unit Cost A54 30 60 40 58 C77 25 174 15 180 F66 20 130 15 128 H83 6 547 15 540 K12 500 6 500 7 Q58 75 25 80 26 S36 5 256 4 260 V97 100 17 115 16 Y88 10 750 8 740 Instructions Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: 1. Draw a line through the quantity, and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed as an example. Inventory Sheet December 31 Description Unit Inventory Quantity Cost per Unit Market Value per Unit(Net Realizable Value) Total Cost Market LCM A54 37 30 60 56 1,800 1,680 7 58 56 406 392 2,206 2,072 2,072
( Appendix 6B) Inventory Costing Methods Grencia Company uses a periodic inventory system. For 2018 and 2019, Grencia has the following data (assume all purchases and sales are for cash): Required: 1. Compute cost of goods sold, the cost of ending inventory, and gross margin for each year using FIFO. 2. Compute cost of goods sold, the cost of ending inventory, and gross margin for each year using LIFO. 3. Compute cost of goods sold, the cost of ending inventory, and gross margin for each year using the average cost method. ( Note: Use four decimal places for per unit calculations and round all other numbers to the nearest dollar.) 4. CONCEPTUAL CONNECTION Which method would result in the lowest amount paid for taxes? 5. CONCEPTUAL CONNECTION Which method produces the most realistic amount for income? For inventory? Explain your answer. 6. CONCEPTUAL CONNECTION What is the effect of purchases made later in the year on the gross margin when LIFO is employed? When FIFO is employed? Be sure to explain why any differences occur. 7. CONCEPTUAL CONNECTION If you worked Problem 6-68B, compare your answers. What are the differences? Be sure to explain why any differences occurred.
( Appendix 6B) Inventory Costing Methods: Periodic System Harrington Company had the following data for inventory during a recent year: Assume that Harrington uses a periodic inventory accounting system. Required: 1. Using the FIFO, LIFO, and average cost methods, compute the ending inventory and cost of goods sold. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 2. CONCEPTUAL CONNECTION Which method will produce the most realistic amount for income? For inventory? 3. CONCEPTUAL CONNECTION Which method will produce the lowest amount paid for taxes?