Problem 6 5A Lower of cost or market LO P2 A physical inventory of Liverpool Company taken at December 31 reveals the following Per Unit Item Units Cost Market Car audio equipment Speakers 354 $ 109 $ 117 Stereos 269 130 120 Amplifiers 335 105 114 Subwoofers 213 71 61 Security equipment Alarms 489 169 159 Locks 300 112 102 Cameras 221 331 341 Binocular equipment Tripods 194 93 103 Stabilizers 179 114 124 Required 1 Calculate the lower of cost or market for the inventory applied separately to each item 2 If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account Problem 6 6A Analysis of inventory errors LO A2 Navajo Companys financial statements show the following The company recently discovered that in making physical counts of inventory, it had made the following errors Inventory on December 31, 2016, is understated by $68,000, and inventory on December 31, 2017, is overstated by $38,000 For Year Ended December 31 2016 2017 2018 (a) Cost of goods sold $ 743,000 $ 973,000 $ 808,000 (b) Net income 286,000 293,000 268,000 (c) Total current assets 1,265,000 1,378,000 1,248,000 (d) Total equity 1,405,000 1,598,000 1,263,000 Required 1 For each key financial statement figure( a ), ( b ), ( c ), and ( d ) belowprepare a table to show the adjustments necessary to correct the reported amounts 2 What is the error in total net income for the combined three year period resulting from the inventory errors Problem 6 8AA Periodic Income comparisons and cost flows LO A1, P3 QP Corp sold 5,420 units of its product at $45 80 per unit in year 2017 and incurred operating expenses of $6 80 per unit in selling the units It began the year with 680 units in inventory and made successive purchases of its product as follows Jan 1 Beginning inventory 680 units $18 80 per unit Feb 20 Purchase 1,580 units $19 80 per unit May 16 Purchase 780 units $20 80 per unit Oct 3 Purchase 480 units $21 80 per unit Dec 11 Purchase 3,380 units $22 80 per unit Total 6,900 units Required 1 Prepare comparative income statements for the three inventory costing methods of FIFO, LIFO, and weighted average which includes a detailed cost of goods sold section as part of each statement The company uses a periodic inventory system, and its income tax rate is 40 (Round your average cost per unit to 2 decimal places )

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Problem 6-5A Lower of cost or market LO P2 A physical inventory of Liverpool Company taken at December 31 reveals the following. Per Unit Item

Problem 6-5A Lower of cost or market LO P2

A physical inventory of Liverpool Company taken at December 31 reveals the following.

		Per Unit
Item	Units	Cost		Market
Car audio equipment
Speakers	354	$	109	$	117
Stereos	269		130		120
Amplifiers	335		105		114
Subwoofers	213		71		61
Security equipment
Alarms	489		169		159
Locks	300		112		102
Cameras	221		331		341
Binocular equipment
Tripods	194		93		103
Stabilizers	179		114		124

Required: 1. Calculate the lower of cost or market for the inventory applied separately to each item. 2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

Problem 6-6A Analysis of inventory errors LO A2

Navajo Companys financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Inventory on December 31, 2016, is understated by $68,000, and inventory on December 31, 2017, is overstated by $38,000.

For Year Ended December 31		2016		2017		2018
(a)	Cost of goods sold	$	743,000	$	973,000	$	808,000
(b)	Net income		286,000		293,000		268,000
(c)	Total current assets		1,265,000		1,378,000		1,248,000
(d)	Total equity		1,405,000		1,598,000		1,263,000

Required: 1. For each key financial statement figure(a), (b), (c), and (d) belowprepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the error in total net income for the combined three-year period resulting from the inventory errors?

Problem 6-8AA Periodic: Income comparisons and cost flows LO A1, P3

QP Corp. sold 5,420 units of its product at $45.80 per unit in year 2017 and incurred operating expenses of $6.80 per unit in selling the units. It began the year with 680 units in inventory and made successive purchases of its product as follows.


Jan.	1	Beginning inventory	680	units @ $18.80 per unit
Feb.	20	Purchase	1,580	units @ $19.80 per unit
May	16	Purchase	780	units @ $20.80 per unit
Oct.	3	Purchase	480	units @ $21.80 per unit
Dec.	11	Purchase	3,380	units @ $22.80 per unit
		Total	6,900	units

Required: 1. Prepare comparative income statements for the three inventory costing methods of FIFO, LIFO, and weighted average which includes a detailed cost of goods sold section as part of each statement. The company uses a periodic inventory system, and its income tax rate is 40%. (Round your average cost per unit to 2 decimal places.)