Question
QS 6-5 Perpetual: Inventory costing with LIFO LO P1 A company reports the following beginning inventory and two purchases for the month of January. On
QS 6-5 Perpetual: Inventory costing with LIFO LO P1
A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 430 units. Ending inventory at January 31 totals 170 units.
| Units | Unit Cost | |||
| Beginning inventory on January 1 | 390 | $ | 3.80 | |
| Purchase on January 9 | 90 | 4.00 | ||
| Purchase on January 25 | 120 | 4.10 | ||
Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on LIFO.
Required information
Use the following information for the Quick Study below.
Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 30 units for $50 each.
| Purchases on December 7 | 20 units @ $20.00 cost |
| Purchases on December 14 | 34 units @ $30.00 cost |
| Purchases on December 21 | 30 units @ $36.00 cost |
QS 6-10 Perpetual: Assigning costs with FIFO LO P1
Required: Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory based on the FIFO method.
equired information
Use the following information for the Quick Study below.
Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 30 units for $50 each.
| Purchases on December 7 | 20 units @ $20.00 cost |
| Purchases on December 14 | 34 units @ $30.00 cost |
| Purchases on December 21 | 30 units @ $36.00 cost |
QS 6-11 Perpetual: Inventory costing with LIFO LO P1
Required: Monson sells 30 units for $50 each on December 15. Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory when costs are assigned based on LIFO.
Required information
Use the following information for the Quick Study below.
Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 30 units for $50 each.
| Purchases on December 7 | 20 units @ $20.00 cost |
| Purchases on December 14 | 34 units @ $30.00 cost |
| Purchases on December 21 | 30 units @ $36.00 cost |
QS 6-12 Perpetual: Inventory costing with weighted average LO P1
Required: Monson sells 30 units for $50 each on December 15. Monson uses a perpetual inventory system. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. (Round your per unit costs to 2 decimal places.)
Required information
Use the following information for the Quick Study below.
Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 30 units for $50 each.
| Purchases on December 7 | 20 units @ $20.00 cost |
| Purchases on December 14 | 34 units @ $30.00 cost |
| Purchases on December 21 | 30 units @ $36.00 cost |
QS 6-13 Perpetual: Inventory costing with specific identification LO P1
Required: Monson sells 30 units for $50 each on December 15. Of the units sold, 16 are from the December 7 purchase and 14 are from the December 14 purchase. Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory when costs are assigned based on specific identification.
Required information
Use the following information for the Exercises below.
[The following information applies to the questions displayed below.]
Laker Company reported the following January purchases and sales data for its only product.
| Date | Activities | Units Acquired at Cost | Units sold at Retail | |||||||||||||||
| Jan. | 1 | Beginning inventory | 235 | units | @ | $ | 16.00 | = | $ | 3,760 | ||||||||
| Jan. | 10 | Sales | 185 | units | @ | $ | 25.00 | |||||||||||
| Jan. | 20 | Purchase | 180 | units | @ | $ | 15.00 | = | 2,700 | |||||||||
| Jan. | 25 | Sales | 200 | units | @ | $ | 25.00 | |||||||||||
| Jan. | 30 | Purchase | 370 | units | @ | $ | 14.50 | = | 5,365 | |||||||||
| Totals | 785 | units | $ | 11,825 | 385 | units | ||||||||||||
The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 400 units, where 370 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory.
Exercise 6-3 Perpetual: Inventory costing methods LO P1
Required: 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. 3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO. 4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.
equired information
Use the following information for the Exercises below.
[The following information applies to the questions displayed below.]
Laker Company reported the following January purchases and sales data for its only product.
| Date | Activities | Units Acquired at Cost | Units sold at Retail | |||||||||||||||
| Jan. | 1 | Beginning inventory | 235 | units | @ | $ | 16.00 | = | $ | 3,760 | ||||||||
| Jan. | 10 | Sales | 185 | units | @ | $ | 25.00 | |||||||||||
| Jan. | 20 | Purchase | 180 | units | @ | $ | 15.00 | = | 2,700 | |||||||||
| Jan. | 25 | Sales | 200 | units | @ | $ | 25.00 | |||||||||||
| Jan. | 30 | Purchase | 370 | units | @ | $ | 14.50 | = | 5,365 | |||||||||
| Totals | 785 | units | $ | 11,825 | 385 | units | ||||||||||||
The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 400 units, where 370 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory.
Exercise 6-4 Perpetual: Income effects of inventory methods LO A1
Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $2,200, and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.)
2. Which method yields the highest net income?
LIFO
Weighted average
Specific identification
FIFO
3. Does net income using weighted average fall between that using FIFO and LIFO?
No
Yes
4. If costs were rising instead of falling, which method would yield the highest net income?
Weighted average
LIFO
Specific identification
FIFO
Required information
Use the following information for the Exercises below.
[The following information applies to the questions displayed below.] Hemming Co. reported the following current-year purchases and sales for its only product.
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||||||
| Jan. | 1 | Beginning inventory | 230 | units | @ $11.20 | = | $ | 2,576 | ||||||||
| Jan. | 10 | Sales | 160 | units | @ $41.20 | |||||||||||
| Mar. | 14 | Purchase | 350 | units | @ $16.20 | = | 5,670 | |||||||||
| Mar. | 15 | Sales | 320 | units | @ $41.20 | |||||||||||
| July | 30 | Purchase | 430 | units | @ $21.20 | = | 9,116 | |||||||||
| Oct. | 5 | Sales | 400 | units | @ $41.20 | |||||||||||
| Oct. | 26 | Purchase | 130 | units | @ $26.20 | = | 3,406 | |||||||||
| Totals | 1,140 | units | $ | 20,768 | 880 | units | ||||||||||
Exercise 6-7 Perpetual: Inventory costing methods-FIFO and LIFO LO P1
Required: Hemming uses a perpetual inventory system. 1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. 2. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. 3. Compute the gross margin for FIFO method and LIFO method.
Reference links
Inventory Costing Illustration opens in a new window
Required information
Use the following information for the Exercises below.
[The following information applies to the questions displayed below.] Hemming Co. reported the following current-year purchases and sales for its only product.
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||||||
| Jan. | 1 | Beginning inventory | 230 | units | @ $11.20 | = | $ | 2,576 | ||||||||
| Jan. | 10 | Sales | 160 | units | @ $41.20 | |||||||||||
| Mar. | 14 | Purchase | 350 | units | @ $16.20 | = | 5,670 | |||||||||
| Mar. | 15 | Sales | 320 | units | @ $41.20 | |||||||||||
| July | 30 | Purchase | 430 | units | @ $21.20 | = | 9,116 | |||||||||
| Oct. | 5 | Sales | 400 | units | @ $41.20 | |||||||||||
| Oct. | 26 | Purchase | 130 | units | @ $26.20 | = | 3,406 | |||||||||
| Totals | 1,140 | units | $ | 20,768 | 880 | units | ||||||||||
Exercise 6-8 Specific identification LO P1
Required: Hemming uses a perpetual inventory system. Assume that ending inventory is made up of 50 units from the March 14 purchase, 80 units from the July 30 purchase, and all 130 units from the October 26 purchase. Using the specific identification method, calculate the following.
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Advanced Financial Accounting
Authors: Richard Baker, Valdean Lembke, Thomas King, Cynthia Jeffrey
7th Edition
0073526746, 978-0073526744
