exercise 5-16

January 6 purchase and Periodic: Cost flow hine the cost assigned to ending inventory and to cost of assumptions goods sold using (a) specific identification, (b) weighted average. (e) FIFO, and (d) LIFO. (Round per unit P1 costs and inventory amounts to cents.) (e) Which method yields the lowest net income? Jan. 1 Jan. 6 Jan. 17 Jan. 25 Beginning inventory. Purchase Purchase Purchase Totals 138 units a $3.00 = $ 414 300 units @ $2.80 = 840 540 units a $2.30 = 1.242 22 units a $2.00 44 1.000 units $2.540 Check Inventory UFO $180,00 FIFO $131 40 Martinez Company's ending inventory includes the following items. Compute the lower of cost or market Exercise 5-16 for ending inventory applied separately to each product. P2 Market per Unit Lower of cost or market Product Units Cost per Unit Helmets Bats. Shoes. Uniforms 24 17 38 42 $50 78 95 36 $54 72 91 36 Check LCM $7,394 errors Vibrant Company had $850,000 of sales in each of Year 1. Year 2, and Year 3, and it purchased merchan- Exercise 5-17 dise costing $500,000 in each of those years. It also maintained a $250.000 physical inventory from the Analyzing inventory beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of Year I that caused its Year 1 ending inventory to appear on its statements as $230,000 rather than the A2 correct $250.000 1. Determine the correct amount of the company's gross profit in each of Year 1 Year 2, and Year 3. 2. Prepare comparative income statements as in Exhibit 5.11 to show the effect of this error on the com- pany's cost of goods sold and gross profit for each of Year 1. Year 2 nd Year 3. Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recom- Comparing LIFO numbers Mulled in antanut and most of goods sold using FIFO for comparison purposes. Exercise 5-18 to FIFO numbers, ratio analysis