1. The following data concerns inventory and purchases at Davenport Company: Inventory, January 1 90 units at $103 Purchases: January 6 60 units at $102 January 15 45 units at $102 January 22 35 units at $96 Inventory, January 31 88 units INSTRUCTIONS Determine the cost of the ending inventory on January 31 under each of the following methods: (a) average cost method; (b) first in, first out (FIFO) method; and (c) last in, first out (LIFO) method. When using the average cost method, compute the unit cost to two decimal places. 2. The following data pertains to Smart Investment Accounting software packages in the inventory of Computer Program Smart Outlets: Inventory, January 1 170 units at $107 Purchases: May 10 110 units at $105 August 18 180 units at $104 October 1 170 units at $105 Inventory, December 31 175 units INSTRUCTIONS 1. Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under each of the following valuation methods: (a) FIFO, (b) LIFO, and (c) average cost. When using the average cost method, compute the unit cost to the nearest cent. 2. Assume that the replacement cost of each unit on December 31 is $105.25. Using the lower of cost or market rule, find the inventory amount under each of the methods given in instruction 1. 3. Printer Cartridges Item 119 50 $ 16.00 $ 16.50 Item 120 60 17.25 17.10 Item 121 90 23.00 23.50 Fax Machines Item 210 15 86.00 89.00 Item 211 10 192.00 186.00 Item 212 9 225.00 210.00 Determine the amount to be reported as the inventory valuation at cost or market, whichever is lower, under each of these methods: 1. Lower of cost or market for each item separately. 2. Lower of total cost or total market. 3. Lower of total cost or total market by group. 4. Over the past several years, Haven Forrest Company has had an average gross profit of 30 percent. At the end of 2013, the income statement of the company included the following information: Sales $1,668,750 Cost of Goods Inventory, January 1, 2013 $ 117,000 Purchases 1,170,000 Total Merchandise Available for Sale 1,287,000 Less Inventory, December 31, 2013 136,875 Cost of Goods Sold 1,150,125 Gross Profit on Sales $ 518,625 Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31. Instead, they had merely estimated the inventory Using the gross profit method of inventory estimation, verify the reasonableness (or lack of reason- ableness) of the ending inventory shown on the income statement. If a physical inventory count on December 31, 2013, revealed an ending inventory of $135,563, calculate the gross profit percentage to the nearest one-tenth of 1 percent.

Student Name: Class: Problem 17.01A DAVENPORT COMPANY Number of Units 90 Description Beginning Inventory, January 1 Purchases: January 6 January 15 January 22 Total Merchandise Available for Sale 60 45 35 230 Unit Cost $103.00 Total Cost $9,270.00 102.00 102.00 96.00 6,120.00 4,590.00 3,360.00 $23,340.00 Correct! a. Average Cost Method Cost of Ending Inventory b. FIFO Method From January 22 Purchase From January 15 Purchase From January 6 Purchase c. LIFO Method Cost from Beginning Inventory Given Data P17.01A DAVENPORT COMPANY Inventory Data Units Inventory, January 1 Purchases: January 6 January 15 January 22 Inventory, January 31 90 60 45 35 88 Cost 103.00 102.00 102.00 96.00 Student Name: Class: Problem 17.02A COMPUTER PROGRAM SMART OUTLETS equirement 1: Description Beginning Inventory, January 1 Purchases: May 10th August 18th October 1st Total Merchandise Available for Sale Number of Units 170 Unit Cost $107.00 Total Cost $18,190.00 110 180 170 630 105.00 104.00 105.00 11,550.00 18,720.00 17,850.00 $66,310.00 Correct! Number of Units Description a. FIFO Method Unit Cost Inventory Valuation Cost of Goods Sold Valuation Basis Lower of Cost or Market b. LIFO Method c. Average Cost Method Requirement 2: Valuation Based on: Method a. FIFO b. LIFO c. Average Cost Number of Units Cost Market Analyze: The difference between cost and market value of inventory using LIFO is: Given Data P17.02A COMPUTER PROGRAM SMART OUTLETS Inventory Data Units Inventory, January 1 Purchases: May 10 August 18 October 1 Inventory, December 31 170 110 180 170 175 Cost 107.00 105.00 104.00 105.00 Student Name: Class: Problem 17.03A ELECTRONICS SUPPLY COMPANY Description Printer Cartridges Item 119 Item 120 Item 121 Total Cartridges Quantity Unit Cost 50 60 90 16.00 17.25 23.00 Description Fax Machines Item 210 Item 211 Item 212 Total Fax Machines Grand Totals Quantity Unit Cost 15 10 9 86.00 192.00 225.00 Inventory Valuations 1. Lower of cost or market by individual items 2. Lower of total cost of total market 3. Lower of total cost or total market by groups Printer Cartridges Fax Machines Total inventory by groups Lower of Cost or Market Market Value 16.50 17.10 23.50 Market Value 89.00 186.00 210.00 Total Cost 800.00 1,035.00 2,070.00 $3,905.00 Total Cost 1,290.00 1,920.00 2,025.00 Total Market Lower of Cost or Market 825.00 1.03 2,115.00 $2,941.03 Total Market 1,335.00 1,860.00 1,890.00 Lower of Cost or Market Given Data P17.03A ELECTRONICS SUPPLY COMPANY Inventory Data Quantity Unit Cost Market Value Printing Cartridges Item 119 Item 120 Item 121 50 60 90 $16.00 17.25 23.00 $16.50 17.10 23.50 Fax Machines Item 210 Item 211 Item 212 15 10 9 86.00 192.00 225.00 89.00 186.00 210.00 Student Name: Class: Problem 17.06A ANDERSON SAILING COMPANY 2. Cost of items still on hand in ending inventory on August 31: Item Cost 3. Cost of Goods Sold during August: Item Cost Given Data P17.06A ANDERSON SAILING COMPANY Inventory Data August 1, 2013 28' Starfish 30' Perch 24' Sea King 30' Holiday 20' Lake King Cost $35,000 55,000 21,000 41,000 23,000 Retail $47,000 75,000 25,000 50,000 29,500 Additional Information August sales at retail value shown above: 30' Holiday 20' Lake King