PIRequired information[The following information applies to the questions displayed below.]Alquist Company uses the retail method to estimate its ending inventory. Selectedinformation about its year 2024 operations is as follows:a. January 1, 2024, beginning inventory had a cost of $210,000 and a retail valueof $260,000.b. Purchases during 2024 cost $1,467,000 with an original retail value of$2,330,000.c. Freight costs were $21,000 for incoming merchandise.d. Net additional markups were $240,000 and net markdowns were $170,000.e. Based on prior experience, shrinkage due to shoplifting was estimated to be$26,000 of retail value.f. Merchandise is sold to employees at a 20% of selling price discount. Employeesales are recorded in a separate account at the net selling price. The balance inthis account at the end of 2024 is $360,000.g. Sales to customers totaled $1,860,000 for the year.Required:2. Estimate ending inventory and cost of goods sold using the LIFO retail method.Note: Assume stable prices.Estimated ending inventory at retailEstimated ending inventory at costEstimated cost of goods soldLIFO RetailMethodW

The objective of the question is to estimate the ending inventory and cost of goods sold using the…

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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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A company uses the dollar-value LIFO method of computing inventory. An external price index is used to convert ending inventory to base year. The company began operations on January 1, 2024, with an inventory of $165,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Year Ended December 31 Ending Inventory at Year-End Costs Cost Index (Relative to Base Year) 2024 $ 243,800 1.06 2025 324,500 1.18 2026 304,750 1.15 2027 299,700 1.11 Required: Calculate inventory amounts at the end of each year. (nearest whole dollars)
The inventory records of Kuffel Co. reflected the following information for the year ended December 31, 2019: Number Unit Total Cost Date of Units Cost 1/1 Transaction Beginning inventory Purchase 150 $ 30 $ 4,500 1/24 70 33 2,310 2/22 Sale (100) 3/7 90 40 3,600 Purchase. Purchase 4/10 140 36 5,040 6/11 Sale 9/28 Purchase (100) 50 (100) 39 1,950 12/4 Sale Required: a. Assume that Kuffel Co. uses a periodic inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIFO. FIFO LIFO Cost of goods sold Ending inventory b. Assume that Kuffel Co. uses a perpetual inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIFO. FIFO LIFO Cost of goods sold Ending inventory
Raleigh Department Store uses the conventional retail method for the year ended December 31, 2022. Available information follows: a. The inventory at January 1, 2022, had a retail value of $49,000 and a cost of $34,380 based on the conventional retail method. b. Transactions during 2022 were as follows: Gross purchases Purchase returns Purchase discounts Sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $ 323,040 6,300 5,400 Beginning inventory 28,500 Sales Sales returns Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Retail $530,000 14,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2023, inventory was $85,330, the cost-to-retail percentage for 2023 under the LIFO retail method was 69%, and the appropriate price index was 106% of the January 1, 2023, price level. d. The retail value of the December 31, 2024, inventory was $52,320, the cost-to-retail percentage for…
Windsor Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018-2020. 2018 2019 2020 Net Income Computed Using Average-Cost Method $16,080 17,980 19,920 FIFO Method LIFO Method $18,980 $11,940 14,020 17,050 20,800 24,890 (a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
Boulder, Incorporated is computing its inventory at December 31, 2022. The following information relates to the five major inventory items regularly stocked for resale: Item A B C D E Item A B Required: Using the lower of cost or net realizable value, compute the total valuation for each inventory item at December 31 2022, and the total inventory valuation. C Ending Inventory, Quantity on December 31, 2022 Unit Hand 140 190 45 340 740 D E Total Inventory Valuation $ Net Realizable Value (Market) at Cost when Acquired (FIFO) December 31, 2022 $44 $39 $54 $56 $104 $84 $66 $16 0 $64 $19
Mercury Company has only one inventory pool. On December 31, 2024, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $215,000. Inventory data are as follows: Year 2025 2026 2027 Ending Inventory at Year-End Costs $ 262,500 350,750 354,000 Ending Inventory at Base Year Costs $ 250,000 305,000 295,000 Required: Compute the inventory at December 31, 2025, 2026, and 2027, using the dollar-value LIFO method. Note: Round "Year end cost index" to 2 decimal places. Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Inventory at Date Year-End Cost Year-End Cost Index 12/31/2024 12/31/2025 12/31/2026 = Inventory DVL Cost Ending Inventory at Base Year Ending Inventory at Base Year Year-End Cost Index Cost Cost Inventory Layers Converted to Cost Base $ ° Base 2025 $ 0 Base 2025)
Swifty Corporation began operations on December 1, 2022. The only inventory transaction in 2022 was the purchase of inventory on December 10, 2022, at a cost of $23 per unit. None of this inventory was sold in 2022. Relevant information for fiscal 2023 is as follows: Ending inventory units: Dec. 31, 2022 Dec. 31, 2023, by purchase date Dec. 2, 2023 July 20, 2023 Mar. 15. July Sept. Dec. 2 During 2023, the following purchases and sales were made: Purchases 20. (a1) 4 320 units at $26 320 units at $27 240 units at $29 120 units at $32 120 31 Ending inventory $ 120 Nov. 151 Dec. Sales Apr. Aug. 20 310 10 18 The company uses the periodic inventory method. 12 200 180 279 Determine ending inventory under specific identification.
Current Attempt in Progress Marigold Inc. uses a perpetual inventory system. At January 1, 2025, inventory was $368,080 at both cost and net realizable value. At December 31, 2025, the inventory was $491,920 at cost and $455,800 at net realizable value. Prepare the entry under (a) the cost-of-goods-sold method and (b) the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation (a) (b) e Textbook and Media List of Accounts Save for Later Debit Credit Attempts: 1 of 3 used Submit Answer
Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the records indicate the following data: Beginning inventory Purchases Freight-in on purchases Purchase returns Net markups Net markdowns Net sales ($ in 000s) Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Cost $ 60 533 26 1 $ $ Retail $ 100 935 1 Required: Assuming the price level increased from 1.00 at January 1 to 1.80 at December 31, 2024, use the dollar-value LIFO retail method to approximate cost of ending inventory and cost of goods sold. Note: Round your intermediate and final answers to the nearest whole dollar. Enter your answers in thousands. +372 X Answer is complete but not entirely correct. ($ in 000s) 209 X 130 X 650 X 812 Screenshot
Charleston Company has elected to use the dollar-value LIFO retail method to value its inventory. The following data has been accumulated from the accounting records: Merchandise inventory, January 1, 2024 Cost $ 299,390 661,388 Net purchases Net markups Net markdowns Net sales Pertinent retail price indexes: January 1, 2024 December 31, 2024 Required: Estimate the ending inventory for December 31, 2024. 1.00 1.10 Note: Round "Cost-to-retail percentage" to 2 decimal places. Estimated ending inventory (At Retail) Estimated ending inventory (At Cost) Retail $ 470,000 1,017,000 13,700 3,700 633,500
Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company’s interim income statements as originally reported under the LIFO method follow: 2019 2020 1stQ 2ndQ 3rdQ 4thQ 1stQ Sales $ 14,000 $ 16,000 $ 18,000 $ 20,000 $ 22,000 Cost of goods sold (LIFO) 4,400 5,400 6,200 7,400 8,900 Operating expenses 2,400 2,600 3,000 3,400 3,600 Income before income taxes $ 7,200 $ 8,000 $ 8,800 $ 9,200 $ 9,500 Income taxes (25%) 1,800 2,000 2,200 2,300 2,375 Net income $ 5,400 $ 6,000 $ 6,600 $ 6,900 $ 7,125 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2019 2020 1stQ 2ndQ 3rdQ 4thQ…
Bonita Company began operations in 2025 and determined its ending inventory at cost and at LCNRV at December 31, 2025, and December 31, 2026. This information is presented below. 12/31/25 12/31/26 Cost $312,750 393,920 Date Net Realizable Value $286,430 371,370 (a) Prepare the journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit Credit

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