34.

Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

	Skis	Boots	Apparel	Supplies
Selling price	$172,000	$155,000	$106,000	$77,000
Cost	145,000	143,000	74,200	50,050
Replacement cost	120,000	121,000	118,000	46,050
Sales commission	10%	10%	10%	10%

In applying the lower of cost and net realizable value rule, the inventory of apparel would be valued at:

Cinnamon Buns Co. (CBC) started 2016 with $52,000 of merchandise on hand. During 2016, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system.

Assuming CBC uses the gross method to record purchases, ending inventory would be:

35.

Cinnamon Buns Co. (CBC) started 2016 with $52,000 of merchandise on hand. During 2016, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system. Assuming CBC uses the gross method to record purchases, ending inventory would be:

$21,000.

$15,480.

$6,480.

$15,400.