Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31,current year. Ending Inventory Information about the four major Items stocked for regular sale follows:ENDING INVENTORY, CURRENT YEARNet RaaliableQuantityon Hand346949Value (Market)at Year-End$ 14Unit Cont WhenAcquired (FIFO)$ 19Item48445936612431Required:1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value appliedon an item-by-item basis.2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the yearended December 31, current year?

Inventory: It is the goods and material which is purchased or the goods manufactured which are held…

Answered: Sanchez Company was formed on January 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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During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 60 Apr. 7 Purchase Jul. 16 Purchase 10 Oct. 6 Purchase 140 210 120 530 $ 52 54 57 58 $ 3,120 7,560 11,970 6,960 $ 29,610 For the entire year, the company sells 450 units of inventory for $70 each. Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Required information Use the following information for the Exercises 8-10 below. (Algo) [The following information applies to the questions displayed below.] Hemming Company reported the following current-year purchases and sales for its only product. Date January 1 January 10 March 14 March 15 July 30 October 5 October 26 Total Beginning inventory Purchases: March 14 July 30 October 26 b) Periodic LIFO Total Beginning inventory Purchases: March 14 July 30 October 26 Activities Beginning inventory Sales Purchase Sales c) Gross profit Purchase Sales Purchase Totals Exercise 6-10A (Algo) Periodic: Inventory costing LO P3 # of units Cost of Goods Available for Sale FIFO # of units 0 Hemming uses a periodic inventory system. (a) Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. (b) Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. (c) Compute the gross profit for each method. a) Periodic FIFO Cost per unit 0 Cost of…
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Fine Leather Ltd. had the following inventory at December 31 of the current year. Per Unit Item Quantity Cost Net Realizable Value Leather blazers Model 154 20 $ 100 $ 120 Model 160 15 180 168 Model 165 10 250 260 Handbags Model 11 60 30 32 Model 12 40 45 42 Model 13 25 65 63 Required: 1. Determine the value of ending inventory that should be reported on the statement of financial position by applying the LC&NRV rule to Each item of inventory Each major category of inventory Total inventory
Halicon Ltd. applies the lower of cost or NRV valuation to inventory. The company's inventory at the end of the year is as follows Required: Determine the amount of any adjustment that is required to inventory under each of the following valuation methods: (Enter all amounts as positive values.) By individual type of item. By class of inventory.
Cinco Company determined the following information for an inventory at year-end: P2,000,000 1,400,000 1,800,000 1,700,000 1,900,000 Historical cost Current replacement cost Net realizable value Net realizable value less a normal profit margin Fair value What amount should the inventory be reported at yearend? B. P1,700,000 C. P1,800,000 A. P1,400,000 D. P 1,900,000
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The following units of an inventory item were available for sale during the year: Beginning inventory 8 units at $50 First purchase 18 units at $51 Second purchase 27 units at $56 Third purchase 16 units at $61 The firm uses the periodic inventory system. During the year, 50 units of the item were sold. The value of ending inventory using LIFO is a. $961 b. $1,161 c. $1,361 d. $400
Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Item ABUD A ENDING INVENTORY, CURRENT YEAR Quantity Unit Cost When on Hand Acquired (FIF0) Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Total Net tem Quantity Total Cost Realizable Value D Required 1 Required 2 Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. C D 31 31 66 46 21 $16 45 56 33 66 DE $…

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