College Accounting (Book Only): A Career Approach
13th Edition
ISBN: 9781337280570
Author: Scott, Cathy J.
Publisher: South-Western College Pub
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Chapter C, Problem 2P
Use the information presented in Problem C-1 to solve this problem.
Bean Nursery sells bark to its customers at retail. Bean buys bark from a plywood mill in bulk and transports the bark in its own trucks. Information relating to the beginning inventory and purchases of bark is as follows:
Required
Find the cost of the ending inventory by the first-in, first-out method.
Check Figure
Cost of ending inventory, $562
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Use the following information for the Quick Study below.
Trey Monson starts a merchandising business on December 1 and enters into three inventory purchases:
Purchases on December 7
15 units @ $18.00 cost
Purchases on December 14
29 units @ $27.00 cost
Purchases on December 21
25 units @ $32.00 cost
QS 5-11 Periodic: Inventory costing with LIFO LO P1
Required:Monson sells 25 units for $45 each on December 15. Assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. (Amounts to be deducted should be indicated with a minus sign. Round cost per units to 2 decimals.)
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the next two questions use the following facts. The Corner Frame Shop wants to know theeffect of different inventory costing methods on its financial statements. Inventory and purchases data for June are:Units Unit Cost Total CostJun 1 Beginning inventory 2,500 $11.00 $27,5004 Purchase 1,800 $11.80 21,2409 Sale (1,900)Q6-48. If The Corner Frame Shop uses the FIFO method, the cost of the ending inventory will bea. $21,200.b. $20,900.c. $21,240.d. $27,840.
A home improvement store, like Lowe’s, carries the following items:
Inventory Items
Quantity
Unit Cost
Unit NRV
Hammers
100
$6.80
$7.30
Saws
50
9.80
8.80
Screwdrivers
130
1.80
2.40
Drills
40
24.80
21.60
One-gallon paint cans
160
5.30
4.80
Paintbrushes
180
5.80
6.30
Required:
1. Compute the total cost of inventory.2. Determine whether each inventory item would be reported at cost or net realizable value, and then place that unit amount in the “Lower of Cost and NRV per unit” column. Multiply the quantity of each inventory item by the appropriate cost or NRV unit amount and place the total in the “Total” column.3. Record any necessary adjusting entry to write down inventory from cost to net realizable value.4. Determine the financial statement effects of using lower of cost and net realizable value to report inventory.
Chapter C Solutions
College Accounting (Book Only): A Career Approach
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