A ebooks.cenreader.comeTextbook: Intermediate Accounting: Reporting and AnalysisTTAnnotations Accessibility BookmarkQuick TourPrintSearchExercisesE8-1. Inventory Write-DownLO 8.1 Stiles Corporation uses the FIFO cost flow assumption and is in the process of applying the LCNRV rule for each of twoproducts in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific datafor each product are as follows:Product AProduct BHistorical cost$ 80$ 96Replacement cost7098Estimated cost of disposal3230Estimated selling price150120E8-2. Inventory Write-Down

Under FIFO approach ,historical cost is considered In LIFO ,replacement cost is considerd.

Answered: E8-1. Inventory Write-Down LO 8.1…

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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PA11. LO 10.3 Calculate a) cost of goods sold, b) ending inventory, and c) gross margin for A76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for weighted average (AVG). Number of Units Unit Cost Sales 240 Beginning inventory Sold $100 160 $140 Purchased Sold 520 103 400 142 Purchased Sold Ending inventory 400 110 370 144 230 Compare the calculations for gross margin for A76 Company, based on the results of the perpetual inventory calculations using FIFO, LIFO, and AVG.
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10 Vargas Company uses the perpetual inventory method. Vargas purchased 2,200 units of inventory that cost $23.00 each. At a later date the company purchased an additional 2,600 units of inventory that cost $24.00 each. Vargas sold 2,300 units of inventory for $27.00. If Vargas uses a FIFO cost flow method, the amount of cost of goods sold appearing on the income statement will be: 1 nts 01:10:09 Multiple Choice $50,600. $53,000 $9,100 $6,900.
Problem 8. * Alfred Company measured inventory at the lower of cost and net realizable value. BTS TWICE 240,000 188,000 360,000 250,000 48,000 50,000 208,000 168,000 25% 25% Historical cost Selling Price Est. cost to complete Replacement cost Profit margin What is the measurement of the inventory? Your answer EXO 300,000 360,000 68,000 318,000 10%
e? Explain the financial statement effect of inventory cost flow assumptions. BE6.6 (LO 2), AP In its first month of operation, Hoffman Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8. At the end of the month, 180 units remained. Compute the amount of phantom profit that would result if the company used FIFO rather than LIFO. Explain why this amount is referred to as phantom profit. The company uses the periodic system. Determine correct income statement amounts.
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76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Number of Units Unit Cost Sales Beginning Inventory 260 $100 Sold 160 $140 Purchased 500 103 Sold 400 142 Purchased 420 110 Sold 370 174 Ending Inventory 250 Cost of Goods Sold FIFO $111,100 LIFO 97,900 AVG 96,805 Compare the ealculations for gross margin for A76 Company, based on the results of the perpetual inventory calculations using FIFO, LIFO, and AVG. Round intermediate calculation to 2 decimal places and final answer to nearest whole dollar. Comparison of FIFO, LIFO, AVG; Perpetual FIFO LIFO AVG Sales Revenue 24 Cost of Goods Sold Gross Margin
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