1.FIFO and LIFO Costs Under Perpetual Inventory System

The following units of an item were available for sale during the year:

Beginning inventory	7,200 units at $160
Sale	4,800 units at $300
First purchase	16,000 units at $168
Sale	12,000 units at $300
Second purchase	15,000 units at $176
Sale	11,000 units at $300

The firm uses the perpetual inventory system, and there are 10,400 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO? $

b. What is the total cost of the ending inventory according to LIFO? $

2.Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales data for DVD players are as follows:

November 1		Inventory	120 units at $39
10		Sale	90 units
15		Purchase	140 units at $40
20		Sale	110 units
24		Sale	45 units
30		Purchase	160 units at $43

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

a. Determine the cost of the goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Cost of the Goods Sold Schedule
First-in, First-out Method
DVD Players
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Goods Sold Unit Cost	Cost of Goods Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Nov. 1								$	$
Nov. 10					$	$
Nov. 15		$	$
Nov. 20
Nov. 24
Nov. 30
Nov. 30	Balances					$			$

3.Weighted Average Cost Flow Method Under Perpetual Inventory System

The following units of a particular item were available for sale during the calendar year:

Jan. 1	Inventory	10,000	units at $75.00
Mar. 18	Sale	8,000	units
May 2	Purchase	18,000	units at $77.50
Aug. 9	Sale	15,000	units
Oct. 20	Purchase	7,000	units at $80.25

The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.

Schedule of Cost of Goods Sold Weighted Average Cost Flow Method
	Purchases			Cost of Goods Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1								$	$
Mar. 18					$	$
May 2		$	$
Aug. 9
Oct. 20
Dec. 31	Balances					$		$	$

4.Effect of Errors in Physical Inventory

Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y1, Fonda incorrectly counted its inventory as $337,500 instead of the correct amount of $328,850.

a. State the effects of the error on the December 31, 20Y1, balance sheet of Fonda Motorcycle Shop.

Balance Sheet Items	Understated / Overstated	Amount
Inventory		$
Current Assets		$
Total Assets		$
Stockholders' Equity		$

b. State the effects of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 20Y1.

Income Statement Items	Understated / Overstated	Amount
Cost of Goods Sold		$
Gross Profit		$
Net Income		$

c. If uncorrected, what would be the effects of the error on the 20Y2 income statement?

Income Statement Items	Understated / Overstated	Amount
Cost of Goods Sold		$
Gross Profit		$
Net Income		$

5.Costco, Walmart, Nordstrom: Inventory turnover and Number of days' sales in inventory

The general merchandise retail industry has a number of segments represented by the following companies:

Company Name		Merchandise Concept
Costco Wholesale Corporation		Membership warehouse
Walmart Stores, Inc.		Discount general merchandise
Nordstrom, Inc.		Fashion department store

For a recent year, the following cost of goods sold and beginning and ending inventories are provided from corporate annual reports (in millions) for these three companies:

		Costco		Walmart		Nordstrom
Cost of goods sold		$98,458		$365,086		$8,406
Inventories:
Beginning of year		$7,894		$44,858		$1,531
End of year		$8,456		$45,141		$1,733

a. Determine the inventory turnover ratio for all three companies. Round all calculations to one decimal place.

		Inventory Turnover
Costco
Walmart
Nordstrom

b. Determine the number of days sales in inventory for all three companies. Assume a 365-day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place.

		Number of Days Sales in Inventory
Costco		days
Walmart		days
Nordstrom		days