Desmond Consolidated, Inc. is a leading manufacturer of steel products. The following inventory data relates to the firm’s production during the first quarter of 2020:At the end of the first quarter of 2020, Desmond’s internal auditors determined that 1,700 tons of raw steel had been processed and sold.Assume that the net realizable value per ton is $38.50 at the end of the quarter. What amount should Desmond’s ending inventory be valued at on its March 31 balance sheet under each of the following methods? FIFO, LIFO and Weighted-Average? **Calculating the Value of Ending Inventory and Cost of Goods Sold: Periodic Method**Desmond Consolidated, Inc. is a leading manufacturer of steel products. This table presents inventory data related to the firm’s production during the first quarter of 2020:| Date of Purchase | Tons of Raw Steel Purchased | Purchase Price per Ton | Total Cost ||------------------|-----------------------------|------------------------|-------------|| Jan. 1 | 500 | $38 | $19,000 || Jan. 15 | 700 | $35 | $24,500 || Feb. 7 | 200 | $33 | $6,600 || Feb. 21 | 450 | $30 | $13,500 || March 15 | 350 | $43 | $15,050 || **Total** | **2,200** | | **$78,650** |**Explanation:**- The table lists five purchase transactions for raw steel, highlighting the amount of steel purchased, the purchase price per ton, and the total cost for each date. - On January 1, 500 tons of steel were purchased at $38 per ton, totaling $19,000.- Subsequent purchases were made on January 15, February 7, February 21, and March 15, with varying quantities and prices. - The total raw steel purchased during this period was 2,200 tons, with a cumulative cost of $78,650.This data is crucial for calculating inventory valuations and determining the cost of goods sold using the periodic inventory method.

Inventory: It refers to the items held by an organization which were in various forms like raw…

Answered: P6.23 Calculating the Value of Ending…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Desmond Consolidated, Inc. is a leading manufacturer of steel products. The following inventory data relates to the firm’s production during the first quarter of 2020:

At the end of the first quarter of 2020, Desmond’s internal auditors determined that 1,700 tons of raw steel had been processed and sold.

Assume that the net realizable value per ton is $38.50 at the end of the quarter. What amount should Desmond’s ending inventory be valued at on its March 31 balance sheet under each of the following methods? FIFO, LIFO and Weighted-Average?

**Calculating the Value of Ending Inventory and Cost of Goods Sold: Periodic Method**

Desmond Consolidated, Inc. is a leading manufacturer of steel products. This table presents inventory data related to the firm’s production during the first quarter of 2020:

| Date of Purchase | Tons of Raw Steel Purchased | Purchase Price per Ton | Total Cost |
|------------------|-----------------------------|------------------------|-------------|
| Jan. 1 | 500 | $38 | $19,000 |
| Jan. 15 | 700 | $35 | $24,500 |
| Feb. 7 | 200 | $33 | $6,600 |
| Feb. 21 | 450 | $30 | $13,500 |
| March 15 | 350 | $43 | $15,050 |
| **Total** | **2,200** | | **$78,650** |

**Explanation:**

- The table lists five purchase transactions for raw steel, highlighting the amount of steel purchased, the purchase price per ton, and the total cost for each date.

- On January 1, 500 tons of steel were purchased at $38 per ton, totaling $19,000.
- Subsequent purchases were made on January 15, February 7, February 21, and March 15, with varying quantities and prices.

- The total raw steel purchased during this period was 2,200 tons, with a cumulative cost of $78,650.

This data is crucial for calculating inventory valuations and determining the cost of goods sold using the periodic inventory method.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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