INTERMEDIATE ACCOUNTING <CUSTOM LL>
10th Edition
ISBN: 9781260887068
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 8, Problem 8.5P
Various inventory costing methods
• LO8–1, LO8–4
Ferris Company began 2018 with 6,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January 2018 are as follows:
| Sales | |
| Date of Sale | Units |
| Jan. 5 | 3,000 |
| Jan. 12 | 2,000 |
| Jan. 20 | 4,000 |
| Total | 9,000 |
8,000 units were on hand at the end of the month.
Required:
Calculate January’s ending inventory and cost of goods sold for the month using each of the following alternatives:
1. FIFO, periodic system
2. LIFO, periodic system
3. LIFO, perpetual system
4. Average cost, periodic system
5. Average cost, perpetual system
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Sheffield Limited uses the average cost formula in a perpetual inventory system. Fill in the missing amounts for items [1] to [13]in the
following perpetual inventory schedule. (Round per unit cost and total cost to 2 decimal places, e.g. 15.23.)
Purchases
Date
Units
Cost
Total
Units
Cost
April
1
6
29
[1] $
$5,742
26
[5] $
14
[10]
$201
$2,211
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Question 9 of 13
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0/1
Larkspur, Inc. uses a periodic inventory system and reports the following for the month of June.
Unit
Date
Explanation
Units
Cost
Total Cost
June 1
Inventory
130
$5
$ 650
12
Purchase
340
6
2,040
23
Purchase
200
1,400
30
Inventory
203
(a)
X Your answer is incorrect.
Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round per unit cost to
3 decimal places, e.g. 15.647 and final answers to 0 decimal places, e.g. 5,125.)
FIFO
LIFO
Average-cost
Cost of the ending
inventory
2$
1640
1310
$
1464
Cost of goods sold
2$
2630
2$
2960
2$
2806
Question 3The League Company uses the LIFO (Last-in, First-out) costing method for its perpetual inventory system. It had inventory on 1st January 2021 consisting of 400 articles bought at RM4 each. The purchases during the month of January consisted of 800 at RM4.20 each purchased on 8 January, and 2,000 at RM3.80 each on 18 January. It sold 2,400 at RM5.00 each on 28 January. 40 of those sold were returned in perfect condition on 31 January. The returned goods were bought on 18 January.
Required:a. i. Calculate, by means of an inventory account the number and cost of the articles held in inventory during January 2021.
ii. The unit price and total cost of the inventory.
b. Show the trading account for the month ended 31 January 2021.
Chapter 8 Solutions
INTERMEDIATE ACCOUNTING <CUSTOM LL>
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.5ECh. 8 - Physical quantities and costs included in...Ch. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.23ECh. 8 - Prob. 8.25ECh. 8 - Prob. 8.30ECh. 8 - Prob. 8.31ECh. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Prob. 8.6PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.16PCh. 8 - Prob. 8.1DMPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Prob. 8.4DMPCh. 8 - Prob. 8.5DMPCh. 8 - Prob. 8.8DMPCh. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 1CCTCCh. 8 - Prob. 2CCTC
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