Bryson Co. is a specialty retailer that operates in several locations in western North Carolina. Bryson sells bicycles and related equipment and supplies. Data related to purchases and sales of one of its top selling bicycle models for the years 2016 and 2017 are shown below:

Date

Description

Units

Cost Per Unit

01/01/16

Inventory

27

$314

03/02/16

Purchase

37

$326

05/19/16

Purchase

21

$349

07/25/16

Purchase

58

$355

2016

Sales

104

02/26/17

Purchase

32

$373

05/11/17

Purchase

26

$389

07/22/17

Purchase

65

$416

2017

Sales

116

Bryson uses a periodic inventory system to account for its inventory transactions. The company prepares financial statements just once a year, at its December 31 year-end. None of the companys inventory was stolen or damaged during these two years.

Instructions

Address the following matters related to Bryson Co.s accounting for, and reporting of, its inventory activities during 2016 and 2017:

Compute the companys inventory at December 31, 2016 and its cost of goods sold for 2016 under each of the following cost flow methods:

FIFO method

LIFO method

Average cost method (round the average cost per unit to the nearest cent)

Compute the companys inventory at December 31, 2017 and its cost of goods sold for 2017 under each of the following cost flow methods:

FIFO method

LIFO method

Average cost method (round the average cost per unit to the nearest cent)

Assume Bryson uses a perpetual system and the FIFO method for day-to-day bookkeeping purposes, and the company converts its accounts to the LIFO method (periodic system) for financial reporting. Give the adjusting entry Bryson must make at December 31, 2016 to convert its accounts to LIFO. Ignore income taxes.

As in (c), assume Bryson keeps its accounts on a FIFO basis and converts them at year-end to the LIFO method. Give the adjusting entry needed at December 31, 2017 to convert the companys accounts to LIFO. Ignore income taxes. (Note Bryson follows the practice of making reversing entries to reverse the effects of certain prior-year adjusting entries. Proceed as if Bryson recorded an entry on January 1, 2017 to reverse the effects of the December 31, 2016 LIFO conversion entry. You do not need to make this reversing entry; simply note that it has been made.)

Independent of the information given and your work in parts (a) through (d), assume Bryson adopts the dollar-value LIFO method on December 31, 2016. The following information pertains to the companys inventory at year-ends 2016 and 2017:

Date

Inventory at Year-End Prices

Relevant Price Index

December 31, 2016

$391,000

100

December 31, 2017

$477,000

112

Compute Brysons December 31, 2017 inventory using the dollar-value LIFO method. Similar to parts (c) and (d), assume Bryson keeps its accounts on a FIFO basis and converts them at year-end to the LIFO method. Give the adjusting entry needed at December 31, 2017 to convert Brysons accounts to dollar-value LIFO. Ignore income taxes. (Hint You may assume there was no difference in the FIFO and LIFO amounts at year-end 2016