Max Sdn Bhd is a local wheel trading company and started to operate at the beginningof year 2021. Now, they are considering which inventory methods should theyimplemented for their company. Based on the transaction record, the beginninginventory consists of 10,000 units at a cost of RM 80 each. A long the year, a total of18,000 units were sold at RM 150 each and additional 20,000 units were purchased ata cost of RM85.Q2.(a)Distinguish the effect of First in first out (FIFO), Last in last out (LIFO) andaverage cost on COGS.(b)Suggest to Max Sdn Bhd which method will be best suit for them if they areinterested to reduce their taxable income. Provide evidence and justify youranswer.

Answered: Max Sdn Bhd is a local wheel trading…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Can you help solve this & explain the answers. Thank you Plum Corporation began the month of May with $900,000 of current assets, a current ratio of 2201, and an acid-test ratio of 1.30.1. During the month, it completed the following transactions (the company uses a perpetual inventory system). Hay 2 Purchased $75,000 of merchandise inventory on credit. May 8 Sold merchandise inventory that cost $45,0e0 for $125,000 cash. May 10 Collected $22,000 cash on an account receivable. May 15 Paid $27,500 cash to settle an account payable. May 17 Wrote off a $5,0e0 bad debt against the Alilowance for Doubtful Accounts account. May 22 Declared a $1 per share cash dividend on its 68,000 shares of outstanding common stock. May 26 Paid the dividend declared on May 22. May 27 Borrowed $85,000 cash by giving the bank a 30-day, 10% note. May 28 Borrowed $105,e00 cash by signing a long-tere secured note. May 29 Used the $190,000 cash proceeds from the notes to buy new machinery. Required: Complete the…
On January 1, 2022, Bulldogs Inc. has an inventory account has a balance of P450,000. During the year, Bulldogs Inc. purchased P2,950,000 additional merchandise. On December 31, 2022, the inventory was counted and determined to have a balance of P925,000. What is the inventory turnover for 2022?
Constructor Inc. sells sacks of cement. The inventory records show the following: Date Transaction Number Unit Cost Total Cost of Sacks May 1 Beginning Balance 600 P200 P120,000 5 Purchase 900 210 189,000 7 Sales 1,300 1,400 1,200 1,000 14 Purchase 190 266,000 15 Sales 24 Purchase 200 200,000 28 Sales 1,200 If the entity uses the FIFO method to cost inventories, how much should it report as Cost of Goods Sold?
Complete the table below for the transactions provided using the following methods of inventory valuation: 4.1.1 Weighted average cost4.1.2 FIFO
Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2024. On that date, the cost of the inventory on hand was $22,000 and its retail value was $27,500. Information for 2024 and 2025 is as follows: Date 12/31/2024 12/31/2025 Ending Inventory Retail Price at Retail $ 36,000 $ 39,000 Required: 1. What is the cost-to-retail percentage for the inventory on hand at 1/1/2024? 2. Calculate the inventory value at the end of 2024 and 2025 using the dollar-value LIFO retail method. Required 1 Required 2 Index 1.25 1.30 Ending inventory Complete this question by entering your answers in the tabs below. 23,092 $ Cost-to-Retail Percentage 84% 854 Answer is complete but not entirely correct. Calculate the inventory value at the end of 2024 and 2025 using the dollar-value LIFO retail method. Note: Round your answers to the nearest whole dollar amount. 2024 2025 24,112
CHERRY Company has 10,000 units of merchandise with unit cost of ₱50 at the beginning of the year. Purchases in chronological order during the year are as follows: 2,000 units at ₱51; 1,000 units at ₱52; 500 units at ₱53. The entity sold 13,100 units during the year. What is the ending inventory cost at year-end using FIFO? A. ₱ 20,000 B. ₱ 21,200 C. ₱ 655, 000 D. ₱ 680, 000
The following information was extracted from the accounting records of Leeds Limited for the month ended 30 April 2021: INFORMATION There is no inventory on hand at the beginning of the month of April for Leeds Limited. The total expected production and sales are 75 000 units and 70 000 units respectively. The selling price per unit is R12. The company’s expenses can be broken down as follows: Leeds limited uses the First-In-First out method of inventory evaluation. REQUIRED: Using the information provided above, prepare the Income statement of Leeds Limited for the month ended 30 April 2021 using: Fixed manufacturing cost is R34 500, Variable manufacturing cost per unit is R3.30, Fixed sales and administration costs are R32 000, Variable sales and administration costs are R1.45 Leeds limited uses the First-In-First out method of inventory evaluation. Using the information provided above, prepare the Income statement of Leeds Limited for the month ended 30 April 2021 using: The…
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The following data was obtained from the records of ABC Inc., for the current year. Sales during the year were 210 units. Jan 1, 2021 Beginning Inventory 80 units at $8 Jan 11, 2021 Purchases 65 units at $10 Jan 23, 2021 Purchases 55 units at $ 12 January 31 Purchases 53 units at $14 IF THE TAX RATE IS 30%, HOW MUCH IN TAXES WILL ABC SAVE IN THE CURRENT YEAR IF THEY CHOOSE TO USE LIFO INSTEAD OF FIFO?
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2. A company has inventory on hand at year-end (31 December 2021) that it expects to be able to sell in the ordinary course of business for Rs. 10,000. The cost of these inventories is Rs: 7,000. In order to sell this inventory, the company expects to incur selling costs of Rs. 2,000 and expects to incur further costs of Rs. 3,000 to put this inventory into a saleable condition. Required: a. Calculate the net realizable value b. Calculate any possible write-down and c. Journalize any write-down necessary. d. Show where the write-down would be included and disclosed in the financial statements.
Syarikat Layang uses the LIFO (Last-in, First-out) costing method forits perpetual inventory system. It had inventory on 1st January 2021 consisting of 400 articles bought at RM4 each. The purchases during the month of January consisted of 800 at RM4.20 each purchased on 8 January, and 2,000 at RM3.80 each on 18 January. It sold 2,400 at RM5.00 each on 28 January. 40 of those sold were returned in perfect condition on 31 January. The returned goods were bought on 18 January. Required: a) i. Calculate, by means of an inventory account the number and cost of the articles held in inventory duringJanuary 2021. ii. The unit price and total cost of the inventory. b. Show the trading account for the month ended 31 January 2021.

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