Based on a physical inventory at year-end, Cherry Company determined the chocolate inventory on a FIFO basis at P2,600,000 with a replacement cost of P2,500,000. Cherry Company estimated that, after further processing costs of P 1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. What amount should be reported as chocolate inventory at year-end?

Q: If sales are $250,000, merchandise purchases are $126,500, and the balance of the merchandise…

A: Cost of goods sold is the actual cost of goods that is being sold to the customers. It is calculated…

Q: Honesty Corporation’s shipments to and from its Quezon City branch are billed at 125% of cost. On…

A: Adjusted branch net income is an income actually earned by the branch. It is calculated after…

Q: In the current year, Laker Corporation had sales of $2,020,000 and cost of goods sold of $1,210,000.…

A: JOURNAL ENTRIESJournal Entry is the First stage of Accounting Process. Journal Entry is the Process…

Q: Mignon Company’s Number of Days’ Sales in Inventory is 30 days (assume 360 days in a year). The…

A: Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times…

Q: Win Company, which uses the FIFO inventory method, had 300,000 units in inventory at the beginning…

A: The correct option is  C. $5,000,000

Q: Com plc bought 500 items of inventory at the price of $20 per item on 1 January 20X2, and another…

A: The objective of the question is to calculate the profit under replacement cost accounting. The…

Q: 1. Assume the company does not expect to replace the units of beginning inventory sold; it plans to…

A: LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the…

Q: A company adopted the LIFO method when its inventory was $1,800. One year later its ending inventory…

A: Value of inventory: One Year Later Value of ending inventory = ($ 1,800 X 1.00) + ($ 200 X 1.05)…

Q: A company has 10,000 units of merchandise with unit cost of ₱50 at the beginning of the year.…

A: Introduction: FIFO: FIFO stands for First in First out which means first received inventory to be…

Q: The net sales for Windmill Boatworks from January 1 until June 30 amount to $360,000. Gross profit…

A: Cost of goods sold = Sales - gross profit Given sales = $360,000 Gross profit = 25% of sales =…

Q: The total value of ending inventory at the end of the quarter is: a. 1,140,000 b. 750,000 c.…

A:

Q: Win Company, which uses the FIFO inventory method, had 300,000 units ih inventory at the beginning…

A: Given, Company follows FIFO method;   Beginning Inventory = 300000 units Costing $ 50 each Details…

Q: Sequoia Co. is evaluating its inventory, computer paper, at the end of the period. The cost of each…

A: The ending inventory represents the unsold items. The inventory is recorded at cost. Sometimes the…

Q: Sim-Jo-La Electronics sells a variety of electronic devices including a variety of WIFI SMART camera…

A: Cost of Product= $450 Monthly Demand = 5000 units Annual demand (U)= 5000 units* 12 mounts= 60,000…

Q: AAA Hardware uses the LIFO method to value its inventory. Inventory at the beginning of the year…

A: Effect of Additional Purchase on Income Before Taxes1. LIFO Method:With LIFO (Last-In-First-Out),…

Q: a. EFG reports annual sales of $ 30 million. Annual costs of goods sold is $ 15 million. Inventory…

A: Inventory refers to the goods or items which are stored by the business either for selling or for…

Q: cost of goods sold and gross profit rate would be

A: The cost of goods sold is all the direct cost incurred by the company for making the product.

Q: Massy Distribution Center (MDC) had 500 boxes of IGA Cornflakes at 30 September 2022 in inventory.…

A: Net realizable value is, what is received after deducting all the cost from sales.

Q: Volcano Technology began the year with inventory of $275,000 and purchased $1,850,000 of goods…

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: BestSell Auctions carries an average inventory equal to $100,000. The company's cost of goods sold…

A: Given the following information: Average Inventory: $100,000 Cost of goods sold: $1,500,000

Q: Massy Distribution Centre (MDC) had 500 boxes of IGA Cornflakes at 30 September 2022 in inventory.…

A: Introduction: The net cost of the products obtained equals the cost of the commodities purchased.…

Q: The following information for Dorado Corporation relates to the three-month period ending September…

A: 1. Cost of goods sold (LIFO) = 400,000 units purchased at $24 each + 25,000 units from beginning…

Q: e Westmoreland Corporation uses a periodic system for its inventory. The company starts the current…

A: Cost is the expenses which have been incurred for production, marketing and selling a product, from…

Q: On March​ 1, Year​ 1, LuxWear Inc. had beginning inventory and purchases at cost of​ $50,000 and​…

A: The conventional retail​ method (LCM) which is based on the relationship between product cost and…

Q: At the end of January, Higgins Data Systems had an inventory of 750 units, which cost $13 per unit…

A: Solution:Cost of goods sold refers to the cost of the units which are sold.

Q: Rose Co. sells one product and uses the last-in, first-out method to determine inventory cost.…

A: LIFO method is one of the methods of inventory valuation in which it is assumed that recent or new…

Q: 50.85 days 72.65 days

A: Inventory is an excess amount to be maintained by companies to satisfy the needs of customers and…

Q: (A) What is the annual ordering ost of the company's current inventory policy? (B) What is the…

A: The economic order quantity (EOQ) is a quantity that a company should buy to minimize its cost of…

Q: Monroe Company had a beginning inventory of 350 cans of paint at $12 each on January 1 at a cost of…

A: Total cans purchased =Cans purchased on February 15 +Cans purchased on April 30 + Cans purchased…

Q: The cost of goods sold for Veltron International last year amounted to $547,800, and the average…

A: Inventory turnover refers to the rate at which the inventory in the company is sold, used, and…

Q: Auge Company annually purchases 1,000 tons of raw material at a cost of $100,000 with terms of 2/10,…

A: Generally, under the net price method, the purchase discounts are shown only when the discounts are…

Q: n the current year, Borden Corporation had sales of $2,000,000 and cost of goods sold of $1,200,000.…

A: Journal Entry:   Journal entry has two effects for every transaction. The journal entry is passed by…

Q: SLR Corporation has 3,000 units of each of its two products in its year-end inventory. Per unit data…

A: Inventory is an asset for the company. As the company invests money to purchase stock. The company…

Q: The company made purchases of P60,000 and sales of P85,000 with P10,000 left in inventory. If the…

A: Gross profit is calculated as difference between sales and cost of goods sold.

Q: Racine Co. determined its desiccated coconut inventory on a FIFO basis at P520,000 with a…

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: Dabble, Inc., has sales of $975,000 and cost of goods sold of $476,000. The firm had a beginning…

A: Days sales of inventory (DSI) is the average number of days it takes a company to sell off its…

Q: Blanches Company, which sells Kombucha, had $173,000 of cost of goods sold during the month of June.…

A: Purchase budget:— This budget is prepared to estimate the number of units to be purchased for…

Q: A company normally sells its product for $20 per unit. This company's current inventory consists of…

A: The lower of cost or market (LCM) method is used to value inventory by comparing the original cost…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.