Inventory Pools Stone Shoe Company adopted dollar-value LIFO on January 1. The company produces four products and uses a single inventory pool. The company's beginning inventory consists of the following: Quantity Cost per Unit Total Cost Type Running 80,000 $16 $1,280,000 Tennis 30,000 15 450,000 Basketball 60,000 14 840,000 Soccer 40,000 17 680,000 210,000 $3,250,000 During the year, the company has the following purchases and sales: Quantity Selling Price Type Purchased Cost per Unit Quantity Sold per Unit Running 150,000 $19 140,000 $40 Tennis 130,000 16 100,000 38 Basketball 100,000 14 90,000 37 Soccer 120,000 500,000 18 140,000 42 470,000 Required: 1. Compute the dollar-value LIFO cost of the ending inventory. Round the cost index to 4 decimal places and all other amounts to the nearest dollar. X 2. If the company had used four cost pools instead of one, gross profit would be higher by $20,000.

Inventory Pools Stone Shoe Company adopted dollar-value LIFO on January 1. The company produces four products and uses a single inventory pool. The company's beginning inventory consists of the following: Quantity Cost per Unit Total Cost Type Running 80,000 $16 $1,280,000 Tennis 30,000 15 450,000 Basketball 60,000 14 840,000 Soccer 40,000 17 680,000 210,000 $3,250,000 During the year, the company has the following purchases and sales: Quantity Selling Price Type Purchased Cost per Unit Quantity Sold per Unit Running 150,000 $19 140,000 $40 Tennis 130,000 16 100,000 38 Basketball 100,000 14 90,000 37 Soccer 120,000 500,000 18 140,000 42 470,000 Required: 1. Compute the dollar-value LIFO cost of the ending inventory. Round the cost index to 4 decimal places and all other amounts to the nearest dollar. X 2. If the company had used four cost pools instead of one, gross profit would be higher by $20,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 20E: Inventory Pools Stone Shoe Company adopted dollar-value LIFO on January 1, 2019. The company...

See similar textbooks

Similar questions

Calculate the cost of goods sold dollar value for A67 Company for the month, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for weighted average (AVG).
Calculate the cost of goods sold dollar value for A66 Company for the month, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for last-in, first-out (LIFO).
Bleistine Company had the following transactions for the month. Calculate the gross margin for the period for each of the following cost allocation methods, using periodic inventory updating. Assume that all units were sold for $50 each. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Sales: The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.
Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Sales: The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.
On January 1 of Year 1, Dorso Company adopted the dollar-value LIFO method of inventory costing. Dorsos December 31 ending inventory records are as follows: Year 1: Current cost, 20,000; Index, 100 Year 2: Current cost, 33,600; Index, 120 Using the dollar-value LIFO method, compute Dorsos December 31 ending inventory for Year 2.
Calculate the cost of goods sold dollar value for A74 Company for the sale on March 11, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average (AVG).
Inventory Costing Methods VanderMeer Inc. reported the following information for the month of February: During February, VanderMeer sold 140 units. The company uses a periodic inventory system. Required What is the value of ending inventory and cost of goods sold for February under the following assumptions: Of the 140 units sold, 55 cost $20, 35 cost $22, 45 cost $23, and 5 cost $24. FIFO LIFO Weighted average
Trini Company had the following transactions for the month. Calculate the ending inventory dollar value for each of the following cost allocation methods, using periodic inventory updating. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2, were as follows: There are 1,200 units of inventory on hand on December 31, 20-2. REQUIRED 1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: (a) FIFO (b) LIFO (c) Weighted-average (round calculations to two decimal places) 2. Assume that the market price per unit (cost to replace) of Hursts inventory on December 31 was 18. 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 3. In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of 100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.
Comparison of Inventory Costing Methodsâ€”Periodic System Bitten Companys inventory records show 600 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October: All expenses other than cost of goods sold amount to $3,000 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes. Required Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods: What does the Total column represent? Prepare income statements for each of the three methods. Will the company pay more or less tax if it uses FIFO rather than LIFO? How much more or less?
DeForest Company had the following transactions for the month. Calculate the ending inventory dollar value for the period for each of the following cost allocation methods, using periodic inventory updating. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)