Umatilla Bank and Trust is considering giving Buffalo Industries a loan. Before doing so, it decides that further discussions with Buffalo's accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $262,540. Discussions with the accountant reveal the following. 1. 2. 3. Buffalo shipped goods costing $55,270 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not included in the physical inventory because they were not in the warehouse. The physical count of the inventory did not include goods costing $101.350 that were shipped to Buffalo FOB destination on December 27 and were still in transit at year-end. Buffalo received goods costing $27,030 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count Buffalo shipped goods costing $55,680 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Buffalo physical inventory. Buffalo received goods costing $44,510 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $262.540. 4 5. Determine the correct inventory amount on December 31. The correct inventory amount on December 31 $ $ Teal Mountain Inc. sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Teal Mountain Inc's purchases of EZslide snowboards during September. During the same month, 102 EZslide snowboards were sold. Teal Mountain Inc. uses a periodic inventory system. Date Sept. 1 Sept. 12 Sept. 19 Sept. 26 Unit Cost $107 110 Explanation Inventory Purchases Purchases Purchases Totals Units 13 49 53 20 135 Total Cost $ 1,391 5,390 5,883 2,240 $14,904 112 (a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, eg. 125.153 and final answers to decimal places, e.g. 125.) FIFO LIFO AVERAGE-COST The ending inventory at September 30 $ $ $ $ (b) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to decimal places, e.g. 125.) FIFO LIFO AVERAGE-COST Cost of goods sold $ $ In its first month of operation, Sheridan Company purchased 230 units of inventory for $8, then 330 units for $9, and finally 270 units for $10. At the end of the month, 310 units remained. Compute the amount of phantom profit that would result if the company used FIFO rather than LIFO. Phantom profit $ Waterway Camera Shop Inc. uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at December 31. Net Realizable Value per Unit Cost per Unit Units 5 $184 154 $147 8 162 Cameras Minolta Canon Light Meters Vivitar Kodak 12 114 109 104 127 9 What amount should be reported on Waterway Camera Shop's financial statements, assuming the lower-of-cost-or-net realizable value rule is applied? Total $ $
