Cost Allocation and Lower-of-Cost-or-Market Douglas Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as shown. Units Unit Price Total Cost January 1, 20-- Beginning inventory 1,110 $ 7.90 $ 8,769 March 5 1st purchase 900 8.90 8,010 April 16 2nd purchase 380 9.40 3,572 June 3 3rd purchase 690 10.10 6,969 August 18 4th purchase 610 10.80 6,588 September 13 5th purchase 780 11.80 9,204 November 14 6th purchase 420 13.60 5,712 December 3 7th purchase 520 13.65 7,098 5,410 $ 55,922 There are 1,000 units of inventory on hand on December 31 Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each of the following methods: Cost of Goods Sold Cost of Ending Inventory a. FIFO ____ _ b. LIFO _ _ c. Weighted-average (round calculations to two decimal places) _ _ Assume that the market price per unit (cost to replace) of Douglas's inventory on December 31 was $13. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods: a. FIFO lower-of-cost-or-market _ b. Weighted-average lower-of-cost-or-market _ Prepare required entries to apply: a. _ b. _____ If no entry is required, type "No Entry Required".

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cost Allocation and Lower-of-Cost-or-Market

Douglas Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as shown.

		Units	Unit Price	Total Cost
January 1, 20--	Beginning inventory	1,110	$	7.90	$	8,769
March 5	1st purchase	900		8.90		8,010
April 16	2nd purchase	380		9.40		3,572
June 3	3rd purchase	690		10.10		6,969
August 18	4th purchase	610		10.80		6,588
September 13	5th purchase	780		11.80		9,204
November 14	6th purchase	420		13.60		5,712
December 3	7th purchase	520		13.65		7,098
		5,410			$	55,922

There are 1,000 units of inventory on hand on December 31

Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each of the following methods:

	Cost of Goods Sold	Cost of Ending Inventory
a. FIFO	________	_________
b. LIFO	_________	_________
c. Weighted-average (round calculations to two decimal places)	_________	_________

Assume that the market price per unit (cost to replace) of Douglas's inventory on December 31 was $13. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

a. FIFO lower-of-cost-or-market	_________
b. Weighted-average lower-of-cost-or-market	_________

Prepare required entries to apply:

a. _________
b. _________

If no entry is required, type "No Entry Required".

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