Items 9 to 11Harry Company sells a new product. During a move to a new location, the inventory records for theproduct were misplaced. The entity has been able to gather some information from the purchases andsales records. The July purchases are as follows:QuantityUnit CostTotal CostJuly10,00065650,0001012,00070840,0001515,00060900,0002514,00055770,000On July 31, 17,000 units were on hand.The sales for July amount to P6,000,000, or 60,000 units at P100 per unit. Gross profit on sales for Julywas P2,400,000.The entity has always used a periodic FIFO inventory costing system.9. What is the cost of the inventory on July 31?10. What is the cost of inventory on July 1?11. What is the number of units available for sale on July 1?

The company follows Periodic FIFO inventory system. Under FIFO system, the inventory that are…

Harry Company sells a new product. During a move to a new location, the inventory records for the product were misplaced. The entity has been able to gather some information from the purchases and sales records. The July purchases are as follows: Quantity Unit Cost Total Cost July 10,000 65 12,000 15,000 650,000 840,000 900,000 10 70 15 60 25 14,000 55 770,000 On July 31, 17,000 units were on hand. The sales for July amount to P6,000,000, or 60,000 units at P100 per unit. Gross profit on sales for July was P2,400,000. The entity has always used a periodic FIFO inventory costing system. 9. What is the cost of the inventory on July 31? 10. What is the cost of inventory on July 1? 11. What is the number of units available for sale on July 1?

Harry Company sells a new product. During a move to a new location, the inventory records for the product were misplaced. The entity has been able to gather some information from the purchases and sales records. The July purchases are as follows: Quantity Unit Cost Total Cost July 10,000 65 12,000 15,000 650,000 840,000 900,000 10 70 15 60 25 14,000 55 770,000 On July 31, 17,000 units were on hand. The sales for July amount to P6,000,000, or 60,000 units at P100 per unit. Gross profit on sales for July was P2,400,000. The entity has always used a periodic FIFO inventory costing system. 9. What is the cost of the inventory on July 31? 10. What is the cost of inventory on July 1? 11. What is the number of units available for sale on July 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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Poole Company purchased two identical inventory items. One of the items, purchased in January, cost $40. The other, purchased in February, cost $52. One of the items was sold in March at a selling price of $140. Poole uses LIFO. Which of the following statements is true? Multiple Choice The balance in ending inventory would be $52. The amount of ending inventory would be $46. The amount of cost of goods sold would be $40. The amount of gross margin would be $88.
Required:Determine the costs assigned to the December 31 ending inventory based on the FIFO method.
[The following information applies to the questions displayed below.] Suppose that David has elected to account for inventories and has adopted the last-in, first-out (LIFO) inventory-flow method for his business inventory of widgets (purchase prices below). Widget Number 1 Purchase Date Direct Cost Other Costs Total Cost August 15 $ 2,200 Number 2 October 30 2,350 Number 3 November 10 2,400 Widget Purchase Date Number 4 Early spring Summer Fall In late December, David sold one widget, and next year David expects to purchase three more widgets at the following estimated prices: Number 5 Number 6 $ 2,100 2,200 2,300 David's §481 adjustment amount Number of year(s) Estimated Cost $ 2,600 2,260 2,400 $ 100 150 100 d. Suppose that David initially adopted the LIFO method, but wants to apply for a change to FIFO next year. What would be his §481 adjustment for this change, and over how many year(s) would he make the adjustment? + FIFO
Testing Supplies Inventory and Expense Using IDEAYou have been assigned the task of testing the client’s Supplies Expense based on purchase records and the year-end inventory count. ELM’s unaudited Trial Balance shows a recorded amount of $33,650 for Supplies Expense during the 4th quarter. Per the client, Supplies Expense consists of the all supplies indirectly used in the factory, but which do not get included in the cost of the manufacturing process. These products are all inventory units beginning with E, Q, or J. Assume that the cost of supplies remained constant throughout the quarter. Required:a. Using the information given about beginning balances, purchases, ending counts, and the vendor price list, recalculate Supplies Expense. For the purposes of this exercise, ignore any taxes or shipping charges and base costs solely on the price list.b. Does ELM’s recorded Supplies Expense appear reasonable? Would the auditor perform any further detail testing on Supplies Expense? Explain…