On December 31 of the current year, Sowell, Inc., took a periodic inventory. The following information is obtained from Sowell’s records.

Instructions:

1. Calculate the inventory costs using the FIFO, LIFO, and weighted-average inventory costing methods. Use the form in the Working Papers.

2. Total the three Total Cost columns.

3. Sowell uses the LIFO inventory costing method to determine the cost of inventory. Use the market price given in the form at the beginning of the problem to determine the cost of inventory using the lower of cost or market. Total the Lower of Cost or Market column. Use the form in the Working Papers.

4. Calculate the corporation's estimated ending inventory using the gross profit method of estimating inventory.
The corporation's records show the following on December 31 of the current year.

5. Calculate the corporation's estimated ending inventory using the retail method of estimating inventory. Round the percentage to the nearest 0.1%.

6. Use the information and the estimated inventory calculated in Instruction 4. Calculate the corporation’s merchandise inventory turnover ratio. Round the ratio to the nearest 0.1%.

7. Calculate the corporation's average number of days’ sales in merchandise inventory. Round the amount to the nearest day.

Transcribed Image Text:

Stock January 1 Inventory First Purchase Second Purchase No. Unit Unit Unit December 31 Market Inventory Price No. Price No. Price No. Price R46 14 $ 7.00 15 $ 8.00 15 $ 9.00 $10 16 5.00 10 5.00 10 8.00 26 T76 8 12.00 15 11.00 15 11.00 25 U92 7 8.00 7 8.00 7 8.00 10 V17 5 4.00 10 6.00 10 7.00 GOG55 18 $ 9.50 4.75 10.00 8.00 6.00