Pearson eText Intermediate Accounting -- Instant Access (Pearson+)
3rd Edition
ISBN: 9780136946649
Author: Elizabeth Gordon, Jana Raedy
Publisher: PEARSON+
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Textbook Question
Chapter 10, Problem 10.11E
Lower of Cost or Market. All-Kinds-of-Cases Company sells cases for smart phones and notepad computers. The company uses the LIFO method for costing inventory. All-Kinds-of-Cases groups inventory by the device manufacturer for which the case is made in its LCM computations. All-Kinds-of-Cases provided the following information regarding inventory at the end of the current year
Group No. | Manufacturer | CRC | No. of Units | SP | Disposal | NPM | Cost |
Smart phone case | General Tech | $8 | 450 | $14 | $1 | $ 6 | $ 5 |
Notepad case | General Tech | 14 | 300 | 35 | 2 | 18 | 16 |
Smart phone case | Pacific Base | 5 | 750 | 8 | 2 | 4 | 7 |
Notepad case | Pacific Base | 12 | 520 | 32 | 2 | 15 | 14 |
Definitions:
CRC = Current Replacement Cost
SP = Selling Price
DISPOSAL = Costs of Completion and Disposal
NPM = Normal Profit Margin
Required
- a. Conduct a lower-of-cost-or-market test for All-Kinds-of-Cases assuming that it uses the total inventory approach for LCM computations.
- b. Conduct a lower-of-cost-or-market test for Ail-Kinds-of-Cases assuming that it uses the individual-item approach for LCM computations.
- c. Conduct a lower-of-cost-or-market test for AII-Kinds-of-Cases assuming that it uses the group-by-group approach for LCM computations.
- d. Prepare the
journal entry needed to adjust All-Kinds of Cases s inventory to a lower-of-cost-or-market (LCM) basis assuming that LCM is applied to total inventory groups All-Kinds of Cases uses the indirect approach to record any adjustments to LCM
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Wildhorse Company is a multiproduct firm that uses the perpetual inventory system. The following information concerns one of its products, the Hawkeye.
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(a)
Your answer has been saved. See score details after the due date.
Compute cost of goods sold and ending inventory under the FIFO method. (Round answers to 0 decimal places, e.g. 1,245.)
FIFO
Cost of goods sold
77,900
Ending inventory
43,700
(b)
Compute cost of goods sold and ending inventory under the LIFO method. (Round answers to 0 decimal places, e.g. 1,245.)
LIFO
Cost of goods sold
$enter a dollar amount
Ending inventory
$enter a dollar amount
Journal entries for recording revenue and costs for service provider.
For a traditional inventory-carrying companies, recording journal entries for revenue and costs is something like the following:
Dr. Cash $100
Cr. Revenue $100
Dr. Cost of goods sold $50
Cr. Inventory $50
How does the journal entry work for service companies such as SaaS firms that do not carry inventory?
MusicPlace specializes in sound equipment. Company records indicate the following data for a line of speakers
(Click the icon to view the data)
Read the requirements
Requirement 1. Determine the amounts that MusicPlace should report for cost of goods sold and ending inventory two ways: a. FIFO and b. LIFO (MusicPlace uses a perpetual inventory system.)
Start by determining the amounts that MusicPlace should report for cost of goods sold and ending inventory under a FIFO
FIFO method cost of goods sold
FIFO method ending inventory
Determinie the amounts that MusicPlace should report for cost of goods sold and ending inventory under b. LIFO.
LIFO method cost of goods sold
LIFO method ending inventory
Requirement 2. MusicPlace uses the FIFO method. Prepare the company's income statement for the month ended March 31, 2021, reporting gross profit. Operating expenses totaled $280, and the
income tax rate was 40%. (Round answers to the nearest dollar)
MusicPlace
Income Statement
Month Ended…
Chapter 10 Solutions
Pearson eText Intermediate Accounting -- Instant Access (Pearson+)
Ch. 10 - How is inventory tracked under a perpetual...Ch. 10 - Barbara Wight is Chief Financial Officer at Taylor...Ch. 10 - What costs should be included in the unit cost of...Ch. 10 - When does the inventory allocation problem arise?Ch. 10 - Explain the difference between the FIFO method of...Ch. 10 - Which method of inventory results in an inventory...Ch. 10 - If unit costs are rising and inventory levels are...Ch. 10 - How can financial statements be converted from the...Ch. 10 - Explain the unit of measure under the dollar-value...Ch. 10 - What do firms use as the market value when...
Ch. 10 - Do U.S. GAAP and IFRS treat inventory write-downs...Ch. 10 - Under IFRS, how do firms determine...Ch. 10 - How does the conventional retail method...Ch. 10 - Why would a company use the gross profit method to...Ch. 10 - How are required LIFO disclosures used to compute...Ch. 10 - How does a company build LIFO layers under the...Ch. 10 - Giddens Company adopted the dollar-value UFO...Ch. 10 - The Loyd Company lad 150 units of product Omega on...Ch. 10 - Simmons, Inc. uses the lower-of-cost-or-market...Ch. 10 - Simmons, Inc. uses the lower-of-cost-or-market...Ch. 10 - The Loyd Company had 150 units of product Omega on...Ch. 10 - The Loyd Company had 150 units of product Omega on...Ch. 10 - On March 1, Year 1, LuxWear me had beginning...Ch. 10 - Prob. 10.1BECh. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Prob. 10.4BECh. 10 - FIFO, Perpetual Basis. Spider incorporated...Ch. 10 - LIFO, Perpetual Basis. Using the information...Ch. 10 - Prob. 10.7BECh. 10 - LIFO Reserve. Best Stores is considering a change...Ch. 10 - LIFO. Perpetual Basis. Source Enterprises reports...Ch. 10 - LIFO Liquidation. Using the information provided...Ch. 10 - Prob. 10.11BECh. 10 - Dollar-Value LIFO, Conversion to FIFO. Using the...Ch. 10 - Lower of Cost or Market. Count Clothing Company...Ch. 10 - Lower of Cost or Market. Using the information in...Ch. 10 - Lower of Cost or Market, IFRS. Using the...Ch. 10 - Prob. 10.16BECh. 10 - Prob. 10.17BECh. 10 - Lower of Cost or Market. Sarat Boot Company...Ch. 10 - Prob. 10.19BECh. 10 - Prob. 10.20BECh. 10 - Prob. 10.21BECh. 10 - Gross Profit Method. Sammi Company needs to...Ch. 10 - Prob. 10.23BECh. 10 - LIFO Retail Inventory Method. Complete the...Ch. 10 - LIFO Retail Inventory Method. Complete the...Ch. 10 - Moving Average, FIFO, LIFO. Arthur Lloyd...Ch. 10 - Moving Average, FIFO, LIFO, Presentation, and...Ch. 10 - Moving Average, FIFO, LIFO. Zoola, Inc. provided...Ch. 10 - Prob. 10.4ECh. 10 - LIFO, Conversion to FIFO. Inventory transactions...Ch. 10 - LIFO. Burke Company uses the LIFO perpetual method...Ch. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Prob. 10.10ECh. 10 - Lower of Cost or Market. All-Kinds-of-Cases...Ch. 10 - Prob. 10.12ECh. 10 - Lower of Cost or Market. Printmaster Distributors...Ch. 10 - Prob. 10.14ECh. 10 - Prob. 10.15ECh. 10 - Conventional Retail Inventory Method. Melvin...Ch. 10 - Gross Profit Method. A tsunami destroyed Kyoto...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - Dollar-Value LIFO Retail Inventory Method....Ch. 10 - Moving Average, FIFO, LIFO. Morocco Imports...Ch. 10 - Prob. 10.2PCh. 10 - Prob. 10.3PCh. 10 - Prob. 10.4PCh. 10 - Prob. 10.5PCh. 10 - Prob. 10.6PCh. 10 - Dollar-Value LIFO. LIFO Liquidation. Silvio's...Ch. 10 - Lower of Cost or Market. Framingdale Factories....Ch. 10 - Lower of Cost or Market. O'Sullivan Corporation...Ch. 10 - Conventional Retail Inventory Method. John Stevens...Ch. 10 - Prob. 10.11PCh. 10 - Prob. 10.12PCh. 10 - Basic Retail Inventory Method and Conventional...Ch. 10 - Basic Retail Inventory Method and Conventional...Ch. 10 - Prob. 10.15PCh. 10 - Conventional Retail Inventory Method, Lower of...Ch. 10 - Prob. 1JCCh. 10 - Judgment Case 2: Inventory Costing BBS is a...Ch. 10 - Prob. 3JCCh. 10 - Prob. 1FSCCh. 10 - Prob. 2FSCCh. 10 - Prob. 1SSCCh. 10 - Prob. 2SSCCh. 10 - Surfing the Standards Case 3: Time Shares Treasure...Ch. 10 - Surfing the Standards Case 4: Lower of Cost or...Ch. 10 - Prob. 1BCCCh. 10 - Basis for Conclusions Case 2: The Lower of Cost or...
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