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Need some help please, tried to do but its very confusing and not getting close to finding a solution. E8-3 (L02) (Inventoriable Goods and Costs)

Need some help please, tried to do but its very confusing and not getting close to finding a solution.
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E8-3 (L02) (Inventoriable Goods and Costs) Assume that in an annual audit of Harlowe Inc. at December 31, 2017, you find the following transactions near the closing date. 1. A special machine, fabricated to order for a customer, was finished and specifically segregated in the back part of the shipping room on December 31,2017 . The customer was billed on that date and the machine excluded from inventory although it was shipped on January 4,2018 . 2. Merchandise costing $2,800 was received on January 3,2018 , and the related purchase invoice recorded January 5 . The invoice showed the shipment was made on December 29, 2017, f.o.b. destination. 3. A packing case containing a product costing $3,400 was standing in the shipping room when the physical inventory was taken. It was not included in the inventory because it was marked "Hold for shipping instructions." Your investigation revealed that the customer's order was dated December 18,2017 , but that the case was shipped and the customer billed on January 10, 2018. The product was a stock item of your client. 4. Merchandise received on January 6,2018 , costing $680 was entered in the purchase journal on January 7, 2018. The invoice showed shipment was made fo.b. supplier's warehouse on December 31, 2017. Because it was not on hand at December 31, it was not included in inventory. 5. Merchandise costing $720 was received on December 28,2017 , and the invoice was not recorded. You located it in the hands of the purchasing agent; it was marked "on consignment." Instructions Assuming that each of the amounts is material, state whether the merchandise should be included in the client's inventory, and give your reason for your decision on each item. E8-19 (L03,4) (Alternative Inventory Methods-Comprehensive) Tori Amos Corporation began operations on December 1, 2016. The only inventory transaction in 2016 was the purchase of inventory on December 10, 2016, at a cost of $20 per unit. None of this inventory was sold in 2016. Relevant information is as follows. During the year, the following purchases and sales were made. The company uses the periodic inventory method. Instructions (a) Determine ending inventory under (1) specific identification, (2) FIFO, (3) LIFO, and (4) average-cost. (b) Determine ending inventory using dollar-value LIFO. Assume that the December 2, 2017, purchase cost is the current cost of inventory. (Hint: The beginning inventory is the base layer priced at $20 per unit.) Before working the above Homework: please invest time in doing a careful review of the Chapter 8 Introduction Module covering Imventories and of course Chapter 8 in the text. Pay close attention to the differences, while at the same time the similarities, in the two schedules below covering Periodic vs. Perpetual Periodic: We start with the inventory at the beginning of the period and prepare a schedule as shown below: Beginning lrventory (this would be last accounting period's ending ioventory based on phyrical count) - Inventory Available For Sale - Ending lnventory thth would be our curnent ending inentury detemined by shricical courti) - Cost of Goods Sold Perpetual: Because "perpetual inventory" " is updating our inventory as we buyit from vendork, and also as we sell it to customers, we have a current record in the compsiter of inventory on tund at any given point in time, measured both in quantity and cost. But notice the schedule below, at frst giance it looks the same, and for the nost purt it is, with one exceetion, after arriving at hoventory Available for Sole, next we subtract our "rutning batance" of cost of goods sold being maintained on a perpetual bssio, the difference is whtat our ending inventory on hasd should be. Beginning Inventory (this weuld be last period's ending inventory detennined by physical count) - Inventory Available For Sale - Cost of Goods Sold (notice we are subtracting CCS to eet inventory on Hand] - Inventory on Hand (see important comments on next page regarding this itemy) Very lmportant: even though a perpetual inventory method is constandy upduting our limentery on hand. we must still take a phiveical inyentory count at the end of an accounting period to be sare what is "physically" on band aerees to what is shown to be on hand per the perpetual records malntained by the conputer. Also Don't Forset FIFO Shirst in-first out,, does NOT mean the inventory always moves throuph the comoany on a first in first out fow. LFO (ant in-first out), does NOT mean inventory always moves through the company on a Lst in first out flow: Also remember Average Cost method is bused an a "weighted average: And when it comes to lnventory "Cut-Orf" Remember that inventory beine shipped to is FOB Shipping Point means that as sgon as it leaves the vendor's location. It is our inventory and must be included in both purchases and our phrsical count. Cooverselv, it the inventory is being shipped FOB Destination, we do not include it in purchases nor in our physical inventory until it is recelved. Taking the Inflation Out When Using Dollar Value UFO Look back again at E 8-21 "Dollar Value LIFO page 429 presented the Chapter 8 introduction Module We first took out the "inflation" from ending inventory (\$140000/1.12) Next we compared the ending inventory without infation to the beginning inventory. When doing this it whowed that we had actually dipped into the beginning in other woeds, "depleted" a porbon of the begining ther by the amount of 535,000 . From a "UFO" standpoint, we still have just one laver of inventory totilins 5125,000 . Notice the added layer in the 2nd yeac. We went through the same steps as we fid for the fint year, however we did NOT dip further into the bezinning imentory and therefore added a 2et tiver

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