menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

COST ALLOCATION AND LOWER-OF-COST-OR-MARKET Douglas Company’s beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows: There are 1,000 units of inventory on hand on December 31. REQUIRED 1. Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each of the following methods: (a) FIFO (b) LIFO (c) Weighted-average (round calculations to two decimal places) 2. Assume that the market price per unit (cost to replace) of Douglas’s inventory on December 31 was $13. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods: (a) FIFO lower-of-cost-or-market (b) Weighted-average lower-of-cost-or-market 3. Prepare required entries to apply: (a) FIFO lower-of-cost-or-market (b) Weighted-average lower-of-cost-or-market

BuyFindarrow_forward

College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160
Chapter 13, Problem 7SPA
Textbook Problem
162 views

COST ALLOCATION AND LOWER-OF-COST-OR-MARKET Douglas Company’s beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows:

Chapter 13, Problem 7SPA, COST ALLOCATION AND LOWER-OF-COST-OR-MARKET Douglas Companys beginning inventory and purchases

There are 1,000 units of inventory on hand on December 31.

REQUIRED

  1. 1. Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each of the following methods:
    1. (a) FIFO
    2. (b) LIFO
    3. (c) Weighted-average (round calculations to two decimal places)
  2. 2. Assume that the market price per unit (cost to replace) of Douglas’s inventory on December 31 was $13. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:
    1. (a) FIFO lower-of-cost-or-market
    2. (b) Weighted-average lower-of-cost-or-market
  3. 3. Prepare required entries to apply:
    1. (a) FIFO lower-of-cost-or-market
    2. (b) Weighted-average lower-of-cost-or-market

1.

(a)

To determine

Calculate the total amount of cost of goods sold and cost of ending inventory on September 30, 20-2 under FIFO method.

Explanation of Solution

First-in-First-Out (FIFO): In First-in-First-Out method, the first purchased items are sold first. The value of the ending inventory consists of the recently purchased items.

Calculate the total amount of cost of goods sold an...

2.

(b)

To determine

Calculate the total amount of cost of goods sold and cost of ending inventory on September 30, 20-2 under LIFO method.

3.

(c)

To determine

Calculate the total amount of cost of goods sold and cost of ending inventory on September 30, 20-2 under weighted average cost method.

2.

(a)

To determine

Calculate the cost of ending inventory under FIFO method (Lower of cost or market).

2.

(b)

To determine

Calculate the cost of ending inventory under weighted average cost method (Lower of cost or market).

3.

(a)

To determine

Show the journal entry would be made under lower-of-cost-or-market.

3.

(b)

To determine

Show the journal entry would be made under lower-of-cost-or-market.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 13 Solutions

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Show all chapter solutions
add
Ch. 13 - LO1 If the ending inventory is overstated by...Ch. 13 - Using the following information, compute the...Ch. 13 - Use the following information to compute cost of...Ch. 13 - Kulsrud Company would like to estimate the current...Ch. 13 - What financial statements are affected by an error...Ch. 13 - What is the main difference between the periodic...Ch. 13 - Is a physical inventory necessary under the...Ch. 13 - Is a physical inventory necessary under the...Ch. 13 - In a period of rising prices, which inventory...Ch. 13 - What two factors are taken into account by the...Ch. 13 - Which inventory method always follows the actual...Ch. 13 - When lower-of-cost-or-market is assigned to the...Ch. 13 - List the three steps followed under the gross...Ch. 13 - List the five steps followed under the retail...Ch. 13 - INVENTORY ERRORS Assume that in year 1, the ending...Ch. 13 - JOURNAL ENTRIESPERIODIC INVENTORY Paul Nasipak...Ch. 13 - JOURNAL ENTRIESPERPETUAL INVENTORY Joan Ziemba...Ch. 13 - ENDING INVENTORY COSTS Sandy Chen owns a small...Ch. 13 - LOWER-OF-COST-OR-MARKET Stalberg Companys...Ch. 13 - SPECIFIC IDENTIFICATION, FIFO, LIFO, AND...Ch. 13 - COST ALLOCATION AND LOWER-OF-COST-OR-MARKET...Ch. 13 - GROSS PROFIT METHOD A fire completely destroyed...Ch. 13 - RETAIL INVENTORY METHOD The following information...Ch. 13 - INVENTORY ERRORS Assume that in year 1, the ending...Ch. 13 - JOURNAL ENTRIESPERIODIC INVENTORY Amy Douglas owns...Ch. 13 - JOURNAL ENTRIESPERPETUAL INVENTORY Doreen Woods...Ch. 13 - ENDING INVENTORY COSTS Danny Steele owns a small...Ch. 13 - LOWER-OF-COST-OR-MARKET Bouie Companys beginning...Ch. 13 - SPECIFIC IDENTIFICATION, FIFO, LIFO, AND...Ch. 13 - COST ALLOCATION AND LOWER-OF-COST-OR-MARKET Hall...Ch. 13 - GROSS PROFIT METHOD A flood completely destroyed...Ch. 13 - RETAIL INVENTORY METHOD The following information...Ch. 13 - Hurst Companys beginning inventory and purchases...Ch. 13 - Bhushan Company has been using LIFO for inventory...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What are the main objectives of performance appraisal?

Foundations of Business (MindTap Course List)

EXPECTED RETURNS Suppose you won the lottery and had two options: (1) receiving 0.5 million or (2) taking a gam...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)