Chapter 7 pt.1

1. Splish Brothers Bank and Trust is considering giving Pohl Company a loan. Before doing so, it decides that further discussions with Pohl's accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $319,000. Discussions with the accountant reveal the following Pohl shipped goods costing $63,800 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not included in the physical inventory because they were not in the warehouse The physical count of the inventory did not include goods costing $95,000 that were shipped to Pohl FOB destination on December 27 and were still in transit at year-end. Pohl received goods costing $29,000 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count. Pohl shipped goods costing $59.160 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Pohl's physical inventory Pohl received goods costing $48,720 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $275,000. 2 3 4 5. Determine the correct inventory amount on December 31 Correct inventory on December 31 Larkspur sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Larkspur's purchases of EZslide snowboards during September. During the same month, 105 EZslide snowboards were sold. Larkspur uses a periodic inventory system Date Sept. 1 12 19 26 Explanation Inventory Purchase Purchase Purchase Total Units 15 45 50 20 130 Unit Cost $82 84 86 87 Total Cost $1.230 3,780 4,300 1.740 $11,050 Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. FIFO LIFO AVERAGE-COST Ending inventory at September 30 Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods. FIFO LIFO AVERAGE COST Cost of goods sold Flounder Corp, uses a periodic inventory system and reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 118 $4 $472 12 Purchases 6 2,832 23 Purchases 295 8 2,360 30 Inventory 275 472 (a) Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (For calculation purposes, round average cost to 3 decimal places, eg. 5.275. Round answers to 0 decimal places, eg. 125.) FIFO LIFO Average-Cost The cost of the ending inventory $ $ The cost of goods sold $ $ $