Based on 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 P1,200,000, 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?   a. P2,400,000 b. P2,800,000 c. P2,600,000 d. P2,500,000

Q: Wal-Get Company sells apparel (clothing) to retail customers. Historical results show that about 10%…

A: Ratio of sales returns= 10% Cost of goods sold to sales = 70%   Sales = $ 50,00,000   Returns = $…

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: 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: Mac's Hardware's gross profit on sales is 40%. At the beginning of January, the cost of inventory…

A:

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: Hubble Space Incorporated has the following data which includes inventory conversion period or ICP…

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

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: 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: Part A. Conte Company has a beginning inventory in year one of $700,000 and an ending inventory of…

A: Answer: Dollar-value LIFO Method: Doller value LIFO method is an accounting method for inventory of…

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: A company’s normal selling price for its product is $21 per unit. However, due to market…

A: "Lower of cost or market" is an inventory valuation method under which the value of the inventory is…

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: (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: 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: At year-end, IMMUTABLE Co reported inventory at P3,900,000. Allowance for inventory write-down…

A: Answer: An inventory write-down is the required process used to reflect when an inventory loses…

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: Assume that D = 5,000, k = $ 186, c = $ 15, and five setups (orders) are required per year. What is…

A: Economic order quantity is method of calculating ideal lot to order for inventory at a time to…

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.