Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Textbook Question
Chapter 7, Problem 9DQ
What does the EOQ formula tell us? What assumption is made about the usage rate for inventory? (LO7-5)
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How would you interpret an inventory turnover ratio of 12.4?
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For the same transactions, why does the weighted-average cost method provide different value for ending inventory and COGS depending on whether the periodic or perpetual inventory system is used?
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Select one: a. Perpetual inventory calculates and assigns costs as items are sold, while periodic inventory calculates and assigns costs at the end of the period.
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b. Perpetual inventory calculates and assigns costs at the end of the period, while periodic inventory calculates and assigns costs as items are sold.
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c. Perpetual inventory counts all the purchases for the month first before calculating the average cost, while periodic calculates the average cost after every transaction.
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d. Perpetual inventory and periodic inventory will not provide different values usingÂ
Explain also wrong options and explain with details
Based on the fundamental principle of IAS2, identify two (2) circumstances where the NRV of inventory might be lower than its cost?
Chapter 7 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Why would a financial manager want to slow down...Ch. 7 - Use The Wall Street Journal or some other...Ch. 7 - Why are Treasury bills a favorite place for...Ch. 7 - Explain why the bad debt percentage or any other...Ch. 7 - What are three quantitative measures that can be...Ch. 7 - Prob. 8DQCh. 7 - What does the EOQ formula tell us? What assumption...Ch. 7 - Why might a firm keep a safety stock? What effect...
Ch. 7 - If a firm uses a just-in-time inventory system,...Ch. 7 - City Farm Insurance has collection centers across...Ch. 7 - Prob. 2PCh. 7 - Orbital Communications has operating plants in...Ch. 7 - Postal Express has outlets throughout the world....Ch. 7 - Thompson Wood Products has credit sales of...Ch. 7 - Oral Roberts Dental Supplies has annual sales of...Ch. 7 - Knight Roundtable Co. has annual credit sales of...Ch. 7 - Darla’s Cosmetics has annual credit sales of...Ch. 7 - Barney’s Antique Shop has annual credit sales of...Ch. 7 - Mervyn’s Fine Fashions has an average collection...Ch. 7 - Route Canal Shipping Company has the following...Ch. 7 - Nowlin Pipe & Steel has projected sales of 72,000...Ch. 7 - Fisk Corporation is trying to improve its...Ch. 7 - Prob. 14PCh. 7 - Diagnostic Supplies has expected sales of 84,100...Ch. 7 - Wisconsin Snowmobile Corp. is considering a switch...Ch. 7 - Johnson Electronics is considering extending trade...Ch. 7 - Henderson Office Supply is considering a more...Ch. 7 - Fast Turnstiles Co. is evaluating the extension of...Ch. 7 - Slow Roll Drum Co. is evaluating the extension of...Ch. 7 - Global Services is considering a promotional...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...
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- Using the following data, how should the inventory be valued under lower of cost or market? Original cost 1,350 Estimated selling price 1,475 Selling expenses 180arrow_forwardUsing the following data, how should the inventory be valued under lower of cost or market? Original cost 1,350 Estimated selling price 1,475 Selling expenses 180arrow_forwardLower-of-Cost-or-Market Method On the basis of the data shown below:  Item InventoryQuantity Cost perUnit Market Value per Unit(Net Realizable Value) IA17  80 $39 $42 O5T4 150  20  16 Determine the value of the inventory at the lower of cost or market by applying lower of cost or market to each inventory item, as shown in Exhibit 9. $arrow_forward
- On the basis of the data shown below:  Item InventoryQuantity Cost perUnit Market Value per Unit(Net Realizable Value) A13Y  144 $22 $27 TX24 274  11  7 Determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item, as shown in Exhibit 9.arrow_forwardDuring a period of rising prices, which U.S. GAAP inventory method reports the most current inventory costs on the income statement and on the balance sheet? a. Income Statement Balance Sheet LIFO LIFO b.  FIFO FIFO c.  FIFO LIFO d.  LIFO FIFOarrow_forwardThe problem is stated in the picture. Here is the question: 1. How much is the estimated inventory losses?arrow_forward
- 0. The inventory evaluation method which does not represent the actual ending inventory value is?  a. standard cost  b. first-in, first-out (FIFO)  c. weighted average  d. last-in, first-out (LIFO)arrow_forwardLower-of-Cost-or-Market Method On the basis of the data shown below:  Item InventoryQuantity Cost perUnit Market Value per Unit(Net Realizable Value) MX62  113 $36 $38 BJ54 227  19  16 Determine the value of the inventory at the lower of cost or market by applying lower of cost or market to each inventory item, as shown in Exhibit 9. $fill in the blankarrow_forwardWhen would using the FIFO inventory costing method produce higher inventory account balancesthan the LIFO method would?A. inflationary timesB. deflationary timesC. alwaysD. neverarrow_forward
- On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item as shown in Exhibit below. Item Inventory Quantity Unit Cost Price ($) Unit Market Price ($) MT22 1642 91 88 4WY09 5278 37 44 1GDS 8898 185 172arrow_forwardLower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10.  Item Inventory Quantity Cost per Unit Market Value per Unit(Net Realizable Value) JFW1  134 $30 $25 SAW9 267  16  18arrow_forwardWhat is the purpose of disclosing the difference between the reported LIFO inventory amounts and replacement cost, assuming that replacement cost is equivalent to a FIFO basis?arrow_forward
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