I need help for the homework problem. Its 6 page long and the question is about Inventory measurement, Dollar Value LIFO, Lower of cost market value and retail inventory method. Please provide the steps.

Accounting 350 - Homework #3 Name: Section (circle) 10:00 2:00 4:00 Question 1: Inventory Measurement StayCool, Inc. sells air conditioners. On January 1, 2012, they had 5,000 air conditioner units in inventory. If StayCool reported inventory on a FIFO basis, its beginning inventory balance would include the following: Year units were purchased 2010 2011 Number of units 1,000 4,000 Cost per unit $500 $600 If StayCool reported inventory on a LIFO basis, its beginning inventory balance would include the following: Year units were purchased 1998 2002 Number of units 2,000 3,000 Cost per unit $300 $400 During 2012, StayCool purchased 5,000 air conditioner units. Related costs were as follows: Paid to supplier Freight-in charges Selling commissions $3,500,000 100,000 200,000 During 2012, StayCool sold 6,000 air conditioner units at a price of $1,200 each. StayCool uses a periodic inventory system. a. Calculate Cost of Sales for 2012 if StayCool, Inc. uses periodic LIFO to value inventory. b. Calculate the balance in ending inventory on December 31, 2012 if StayCool, Inc. uses periodic FIFO to value inventory. 1 Question 2: Dollar Value LIFO Inventory Neuman Company adopted the dollar-value LIFO method on December 31, 2011. On this date, its inventory consisted of the following items. Neuman has only one inventory pool. Item A B Number of units 300 900 Cost per unit $2.00 $5.00 Total cost $ 600 4,500 $ 5,100 Neuman purchased inventory of $45,000 during 2012. The following information regarding inventory quantities and cost of each item at December 31, 2012 is also available. Units of item A in inventory Cost per unit of item A Units of Item B in inventory Cost per unit of item B December 31, 2012 450 $3.00 1,200 $6.00 a. Calculate the price index for 2012. (Round your answer to 2 decimal places). b. Calculate Ending Inventory reported on the Balance Sheet at 12/31/12. 2 Question 3: Inventory (LIFO Disclosure) Tzachi Zach was hired as CFO of Rankin, Inc. on December 31, 2011. Rankin currently uses the LIFO method of costing its inventory. Tzachi reviews the process involved in applying the LIFO method and questions whether it is cost efficient to continue using LIFO. In order to complete his analysis, Tzachi must calculate the net income effects of using the LIFO method relative to the FIFO method. Rankin, Inc. adopted LIFO when it began operations on January 1, 2008. The following information is available from Rankin's accounting records. Ending Inventory: LIFO FIFO December 31, 2008 $1,960,000 $2,080,000 December 31, 2009 2,500,000 2,840,000 December 31, 2010 2,850,000 3,300,000 December 31, 2011 3,020,000 3,420,000 Tzachi asks you to help him complete his analysis. He tells you to assume a tax rate of 40% and to ignore present value effects in your calculations. He also tells you that he expects inventory costs and quantities to rise in the foreseeable future. Below are the specific instructions he provides you. a. Calculate the total amount of any tax differences associated with the use of LIFO since its adoption on January 1, 2008. Be sure to indicate whether more or less tax has been paid as a result of using LIFO. b. Calculate the pre-tax income statement effect associated with using LIFO for the year ended December 31, 2011. Be sure to indicate whether reported income is higher or lower when LIFO is used. c. Assume the estimated incremental cost of using LIFO (relative to FIFO) is approximately $40,000 per year (before-tax). The incremental costs are primarily due to increased recordkeeping costs. Based on this information and your analysis, would you recommend that the company stops using LIFO? Show calculations to support your answer and state any relevant assumptions you are making in your recommendation. 3 Question 4: Inventory (Lower of cost or market rule) Schmeit's Shoe Box is a large retail chain with 200 stores nationwide. The following table gives data pertinent to items included in Schmeit's inventory on December 31, 2012. Salespeople earn a 20 percent commission on all sales and normal profit margin is 40 percent of the selling price of an item. Units in ending inventory Cost Selling price Replacement cost Estimated cost to sell (20% sales commission) Ugg boots Boring loafers Trendy mules Cool clogs 100,000 50,000 20,000 30,000 $150 $130 $185 $92 0* $170 $280 $110 $150 $120 $190 $90 0 $34 $56 $22 Ceiling Floor Unit inventory value under LCM rule *A. Schmeits, the Company's CEO, recently read an article in People magazine stating that Ugg boots are no longer in fashion and as a result, deemed the Ugg boots held in the company's inventory as worthless (i.e. no longer saleable). a. Using the given information, calculate ceiling values, floor values and the unit inventory value under the lower-of-cost-or-market rule for each of the items included in Schmeits's inventory. Please write your answers in the space provided in the table above. Include any supporting calculations in the space below. 4 Question 4, continued b. Show two alternative journal entries that Schmeits may make to the record inventory write-down on December 31, 2012. c. In January 2013, Schmeits discovers that its competitors are still selling Ugg boots despite claims being made by fashion \"experts\". Schmeits decides to return Ugg boots to its shelves at a selling price of $250 per pair. The entire stock of boots is sold during January and February 2013. Assuming that no other LCM adjustments are made during the year, calculate the effect these sales will have on Schmeits's 2013 cost of goods sold and net income (before-tax). 5 Question 5 - Retail Inventory Method Start-Up Retailer began operations on January 1, 2011. On January 1, 2011, they purchased inventory at a cost of $2,400,000. The selling price of this inventory was initially set at $5,000,000. During 2011, net markdowns totaled $2,000,000, and net markups totaled $1,000,000. The ending inventory on December 31, 2011 (at Retail) was $1,600,000. During 2012, inventory was purchased at a cost of $3,000,000. The initial selling price of this inventory was set at $8,000,000. Net markdowns in 2012 were $1,000,000, and net markups were $400,000. Ending Inventory on December 31, 2012 (at Retail) was $1,800,000. a. Assuming that Start-Up Retailer uses the conventional retail inventory method, calculate the amount of inventory they should report on their December 31, 2011 Balance Sheet? b. Assuming that Start-Up uses the conventional retail inventory method, calculate the amount of cost of goods sold that they will report on their Income Statement for the year-ending December 31, 2012? 6