INTERMEDIATE ACCOUNTING RMU 9TH EDITION
9th Edition
ISBN: 9781260998726
Author: SPICELAND
Publisher: MCG
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Chapter 8, Problem 8.7P
Various inventory costing methods
• LO8–1, LO8–4
Carlson Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the beginning of 2018, Carlson had three cars in inventory, as follows:
| Car ID | Cost |
| 203 | $60,000 |
| 207 | 60,000 |
| 210 | 63,000 |
During 2018, each of the three autos sold for $90,000. Additional purchases (listed in chronological order) and sales for the year were as follows:
| Car ID | Cost | Selling Price |
| 211 | $63,000 | $ 90,000 |
| 212 | 63,000 | 93,000 |
| 213 | 64,500 | not sold |
| 214 | 66,000 | 96,000 |
| 215 | 69,000 | 100,500 |
| 216 | 70,500 | not sold |
| 217 | 72,000 | 105,000 |
| 218 | 72,300 | 106,500 |
| 219 | 75,000 | not sold |
Required:
1. Calculate 2018 ending inventory and cost of goods sold assuming the company uses the specific identification inventory method.
2. Calculate ending inventory and cost of goods sold assuming FIFO and a periodic inventory system.
3. Calculate ending inventory and cost of goods sold assuming LIFO and a periodic inventory system.
4. Calculate ending inventory and cost of goods sold assuming the average cost method and a periodic inventory system.
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Required information
Problem 8-7 (Algo) Various inventory costing methods [LO8-1, 8-4]
[The following information applies to the questions displayed below.]
Auto Dealers Incorporated sells a handmade automobile as its only product. Each automobile is identical; however, they
can be distinguished by their unique ID number. At the beginning of 2024, Auto Dealers had three cars in inventory, as
follows:
Car ID
203
207
210
Car ID
211
212
213
214
215
216
217
218
219
During 2024, each of the three autos sold for $129,000. Additional purchases (listed in chronological order) and sales for
the year were as follows:
Cost
Problem 8-7 (Algo) Part 3
Ending inventory
Cost of goods sold
Cost
$ 99,000
99,000
102,000
$
$ 99,000
99,000
100,500
102,000
105,000
103,500
108,000
105,300
111,000
Answer is not complete.
LIFO Periodic
Selling Price
909,000
$ 129,000
132,000
not sold
135,000
139,500
3. Calculate ending inventory and cost of goods sold assuming LIFO and a periodic inventory system.
not sold…
8 apply Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2021 year-end inventory is as follows:
Inventory,by Product Category
Quantity
Per UnitCost
Net Realizable Value
Tools:
Hammers
100
$
5.90
$
6.40
Saws
290
10.90
9.90
Screwdrivers
390
2.90
3.50
Paint products:
1-gallon cans
590
6.90
5.90
Paint brushes
100
4.90
5.40
Required:1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.2. Assuming inventory write-downs are common for Almaden, record any necessary year-end adjustment amount for each of the LCNRV applications in requirement 1.
Brief Exercise 6-6 Calculate ending inventory and cost of goods sold using LIFO (LO6-3)
During the year, Wright Company sells 475 remote-control airplanes for $120 each. The company has the following inventory purchase
transactions for the year.
Number of
Unit
Total
Date
Transaction
Units
Cost
Cost
$ 2,840
18,870
Jan. 1
Beginning inventory
40
$ 71
Маy.
5
Purchase
255
74
Nov. 3
Purchase
205
79
16,195
500
$37,905
Calculate ending inventory and cost of goods sold for the year, assuming the company uses LIFO.
LIFO
Cost of Goods Available for Sale
Cost of Goods Sold
Ending Inventory
Ending
Inventory
Cost of Goods
Cost of Goods
# of units
Cost
per unit
# of units
Cost per unit
# of units Cost per unit
Available for Sale
Sold
Beginning Inventory
Purchases:
May 5
Nov. 3
Total
Chapter 8 Solutions
INTERMEDIATE ACCOUNTING RMU 9TH EDITION
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 - Prob. 8.3BECh. 8 - Purchas e discounts; gross method LO83 On...Ch. 8 - Prob. 8.5BECh. 8 - Prob. 8.6BECh. 8 - Inventor y cost flow methods; perpetual system ...Ch. 8 - LIFO method LO84 Esquire Inc. uses the LIFO...Ch. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Ratio analysis LO87 Selected financial statement...Ch. 8 - Dollar-value LIFO LO88 At the beginning of 2018,...Ch. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Determining cost of goods sold; periodic inventory...Ch. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.6ECh. 8 - Goods in transit; consignment LO82 The December...Ch. 8 - Physical quantities and costs included in...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Inventory cost flow methods; periodic system ...Ch. 8 - Inventory cost flow methods; perpetual system ...Ch. 8 - Comparison of FIFO and LIFO; periodic system ...Ch. 8 - Average cost method; periodic and perpetual...Ch. 8 - FIFO, LIFO, and average cost methods LO81, LO84...Ch. 8 - Supplemental LIFO disclosures; LIFO reserve; AEP...Ch. 8 - LIFO liquidation LO81, LO84, LO86 The Reuschel...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Mercury Company has only...Ch. 8 - Dollar-value LIFO LO88 Carswell Electronics...Ch. 8 - Concepts; terminology LO81 through LO85 Listed...Ch. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.2PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Supple mental LIFO disclosures; Caterpillar LO84,...Ch. 8 - LIFO liquidation LO84, LO86 Taylor Corporation...Ch. 8 - LIFO liquidation LO84, LO86 Cansela Corporation...Ch. 8 - Prob. 8.11PCh. 8 - Integrating problem; inventories and accounts...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Kingston Company uses the...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018,...Ch. 8 - Prob. 8.1BYPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Judgment Case 83 The specific identification...Ch. 8 - Prob. 8.4BYPCh. 8 - Prob. 8.5BYPCh. 8 - Judgment Case 86 Goods in transit LO82 At the end...Ch. 8 - Ethics Case 87 Profit manipulation LO84 In 2017...Ch. 8 - Real World Case 88 Effects of inventory valuation...Ch. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 8.11BYPCh. 8 - Prob. 8.CCTCCh. 8 - Prob. CCIFRS
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