Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 10.8E
Dollar-Value LIFO, LIFO Reserve. CWB Teleconcepts, Inc. manufactures and distributes three models of handheld devices the Flame, the Globe, and the HD3 CWB uses the dollar-value UFO method information for 2018, 2019, and 2020 is presented in the following table.
| Description | Base Year 2018 | 2019 | 2020 | |||
| Inventory | Units | Total FIFO Cost | Units | Total FIFO Cost | Units | Total FIFO Cost |
| Flame | 5,000 | $450,000 | 7000 | $658,000 | 4.000 | $392,000 |
| Globe | 6,000 | 660,000 | 5,000 | 580,000 | 3.000 | 375,000 |
| HD3 | 3,000 | 450,000 | 5,000 | 800,000 | 1.000 | 170,000 |
The cumulative price indices for 2018, 2019, and 2020, respectively are 1.00, 1 056, and 1.1155.
Required
- a. Compute the company s ending inventory using dollar-value LIFO tor each year. Treat the three models as one group. Round to the nearest dollar,
- b. Prepare the
journal entry required to adjust the LIFO reserve for each year.
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USW Ltd a manufacturing entity manufactures specialized robust cell phone cases for resale. The manufacturing cost per ton is R850. Finished products are sold for R935 per ton. Sales expenses amount to R45 per ton, delivery costs amount to R35 per ton and other directly associated costs to inventory to make a sale is R25 per ton. Closing inventories on hand at 31 December 2020 amounts to 3 500 tons.
The amount that must be used to write down inventories to its net realisable value is?
R70 000
R75 000
R80 000
R85 000
Blue Company reported the following information in its financial statements.
Blue Company (FIFO)
$millions
Sales
COGS
Inventories
2021
$60,000
$45,000
$15,000
2020
52,000
36,000
13,000
The LIFO reserve for Blue Company is $2,760 at the end of 2020 and $2,500 at the end of 2021.What is the 2021 gross profit for Blue Company, assuming Blue Company had used LIFO?
Select one:
a. $14,740
b. $15,740
c. $14,260
d. $15,000
e. $15,260
Jules company as we know produces two (2) products, GK320 and GK340. The following sales forecast for both products was decided on for the financial year January 1, 2020 to December 31, 2020:
Details
Q1
Q2
Q3
Q4
Total
GK320
6,500
5,200
5,500
4,000
21,200
GK340
4,800
4,600
4,500
3,700
17,600
Notes:
(a) The company planned to sell both GK320 and GK340 for $50 each.
(b) The sales forecast for the first quarter of 2021 is 5,900 units of GK320 and 4,000 units of GK340.
(c) The closing stock level for both products at the end of each quarter is to be held at a level equal to twenty percent (20%) of the budgeted sales for the next quarter.
(d) At the start of 2020 there were in stock 1,200 units of GK320 and 950 units of GK320.
(e) To make one unit of GK320 four (4) units of raw material A are required, while six (6) units of raw material B are required to make one unit of GK340. The cost of raw material A is $20 per unit, while the…
Chapter 10 Solutions
Intermediate Accounting (2nd Edition)
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