Pearson eText for Financial Accounting -- Instant Access (Pearson+)
5th Edition
ISBN: 9780137525423
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON+
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Textbook Question
Chapter 5, Problem 29BE
LIFO (Learning Objective 2) 10-15 min.
Refer to the data for E5-28B. However, instead of the FIFO method, assume Tee Time, Inc., uses the LIFO method.
Requirements
Prepare a perpetual inventory record for the putters on the LIFO basis to determine the cost of ending inventory and cost of goods sold for the month.
Journalize Tee Time, Inc.’s inventory transactions using the perpetual LIFO method. Assume all purchases and sales are on account.
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P5-5B. Journalizing inventory purchases, sales, returns, and freight transactions using the
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Paid $50 freight charges to deliver goods to P. Larson.
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Paid for the supplies purchased on July 7.
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P6-28A Accounting for inventory using the perpetual inventory system-
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1 Prepare a perpetual inventory record, using the FIFO inventory costing method,
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2. Prepare a perpetual inventory record, using the LIFO inventory costing method,
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Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods
The units of an item available for sale during the year were as follows:
Jan. 1
Inventory
4 units at $4,200
$16,800
Aug. 7
Purchase
15 units at $4,300
64,500
Dec. 11
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32 units
$138,500
There are 18 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the
inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average
cost method (Round per unit cost to two decimal places and your final answer to the nearest whole dollar).
a. First-in, first-out (FIFO)
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b.
Last-in, first-out (LIFO)
77,000 V
Weighted average cost
C.
Feedback
Check My Work
a. When the FIFO method is used, costs are included in cost of merchandise sold in the order in which they were purchased.
b. When the LIFO method is used, the cost of the units…
Chapter 5 Solutions
Pearson eText for Financial Accounting -- Instant Access (Pearson+)
Ch. 5 - Prob. 1DQCh. 5 - How are the financial statements of a manufacturer...Ch. 5 - What is a cost-flow assumption? Why is a cost-flow...Ch. 5 - If a company had two units that cost 1 each in its...Ch. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Prob. 10DQ
Ch. 5 - During April, Bargain Hardware made sales of...Ch. 5 - Prob. 2SCCh. 5 - Prob. 3SCCh. 5 - Prob. 4SCCh. 5 - Prob. 5SCCh. 5 - Prob. 6SCCh. 5 - Prob. 7SCCh. 5 - Prob. 8SCCh. 5 - Prob. 9SCCh. 5 - Prob. 10SCCh. 5 - Prob. 11SCCh. 5 - Prob. 12SCCh. 5 - Prob. 1SECh. 5 - Prob. 2SECh. 5 - Prob. 3SECh. 5 - Prob. 4SECh. 5 - Prob. 5SECh. 5 - Prob. 6SECh. 5 - Prob. 7SECh. 5 - Prob. 8SECh. 5 - Lower-of-cost-or-market rule (Learning Objective...Ch. 5 - Prob. 10SECh. 5 - Inventory principles and terminology (Learning...Ch. 5 - Prob. 12SECh. 5 - Prob. 13SECh. 5 - Prob. 14SECh. 5 - Prob. 15SECh. 5 - Prob. 16AECh. 5 - Prob. 17AECh. 5 - Prob. 18AECh. 5 - Prob. 19AECh. 5 - Prob. 20AECh. 5 - Prob. 21AECh. 5 - Prob. 22AECh. 5 - Prob. 23AECh. 5 - Prob. 24AECh. 5 - Prob. 25AECh. 5 - Prob. 26AECh. 5 - Prob. 27AECh. 5 - FIFO (Learning Objective 2) 10-15 min. Tee Time,...Ch. 5 - LIFO (Learning Objective 2) 10-15 min. Refer to...Ch. 5 - Prob. 30BECh. 5 - Prob. 31BECh. 5 - Prob. 32BECh. 5 - Prob. 33BECh. 5 - Prob. 34BECh. 5 - Prob. 35BECh. 5 - Prob. 36BECh. 5 - Prob. 37BECh. 5 - Prob. 38BECh. 5 - Prob. 39BECh. 5 - Computing LIFO and journalizing inventory...Ch. 5 - Prob. 41APCh. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 43APCh. 5 - Prob. 44APCh. 5 - Prob. 45APCh. 5 - Estimating ending inventory (Learning Objective 7)...Ch. 5 - Prob. 47APCh. 5 - Prob. 48BPCh. 5 - Prob. 49BPCh. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 51BPCh. 5 - Prob. 52BPCh. 5 - Prob. 53BPCh. 5 - Prob. 54BPCh. 5 - Prob. 55BPCh. 5 - Continuing Exercise This exercise continues the...Ch. 5 - Prob. 1CPCh. 5 - Prob. 1CFSAPCh. 5 - Prob. 1EIACh. 5 - Prob. 2EIACh. 5 - Prob. 1FACh. 5 - Prob. 1IACh. 5 - Prob. 1SBACh. 5 - Prob. 1WCCh. 5 - Comprehensive Problem The Accounting Cycle for a...
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- (Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Spear Corporation’s inventory records for its retail division show thefollowing at May 31:May 1 Beginning inventory ............... 10 units @ $160 = $1,60015 Purchase................................. 5 units @ 161 = 80526 Purchase................................. 14 units @ 170 = 2,380At May 31, 11 of these units are on hand. Journalize the following for Spear Corporation underthe perpetual system:1. Total May purchases in one summary entry. All purchases were on credit.2. Total May sales and cost of goods sold in two summary entries. The selling price was $560per unit, and all sales were on credit. Assume that Spear uses the FIFO inventory method.3. Under FIFO, how much gross profit would Spear earn for the month ending May 31? Whatis the FIFO cost of Spear Corporation’s ending inventory?arrow_forwardSelect the best answer for the question. Utilize Set 2 from the following PDF to answer this question: http://lessons.pennfoster edu/pdf/061006_Exam_Tables.pdf 4. Which one of the following statements is true for the ending inventory balance? *. O A. It will appear as a debit in the Adjusted, Trial Balance column. B. It will appear as a credit in the Balance Sheet column OC. It will appear as a credit in the Income Statement column. OD. It will appear as a debit in the Trial Balance column. O Mark for review (Will be highlighted on the review page) >arrow_forwardTask 1 : Journalizing using Perpetual Inventory System Directions: Prepare the general journal entries to record these transactions using a perpetual inventory system. (Record all purchases initially at the gross invoice amount) Please use Journal sheets for this task. Wong's Company had the following transactions during December 2020: December 1 – Sold merchandise for credit for $5,000 terms 3/10,n/30. The items sold had a cost of $3,500. 2 – Purchased merchandise for cash, $720. 4 – Purchased merchandise on credit for $2,600, terms 1/20,n/40. 10- Issued a credit memorandum for $300 to a customer who returned merchandise purchased on November 29. The return items had a cost of $210. 14- Received payment for merchandise sold on December 1. 12 – Received a credit memorandum for the return of faulty merchandise purchased on December 4 for $600. 13 – Paid freight charges of…arrow_forward
- Access EDGAR (Electronic Data Gathering, Analysis and Retrieval) on the internet at www.sec.gov. Access a 10-K filing for any company. Search for the notes regarding their inventory valuation method(s) and describe them in a paragraph. Each student should use a different company. Please remember to include a link to the 10-K of your company in your post.arrow_forwardBeginning inventory, purchases, and sales for Item Gidget are as follows: Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on September 27 and (b) the inventory on September 30.arrow_forwardBeginning inventory, purchases, and sales for Item Widget are as follows: Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on March 25 and (b) the inventory on March 31.arrow_forward
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