The board of directors of Ichiro Corporation is considering whether or not it should instruct the accounting department to shift from a first-in, first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available. Sales Inventory, January 1 Purchases Inventory, December 31 Operating expenses 21,000 units @ 6,000 units @ 6,000 units@ 10,000 units @ 7,000 units @ 8,000 units@ $50 20 22 25 30 ? $200,000 Prepare a condensed income statement for the year on both bases for comparative purposes.

The board of directors of Ichiro Corporation is considering whether or not it should instruct the accounting department to shift from a first-in, first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available. Sales Inventory, January 1 Purchases Inventory, December 31 Operating expenses 21,000 units @ 6,000 units @ 6,000 units@ 10,000 units @ 7,000 units @ 8,000 units@ $50 20 22 25 30 ? $200,000 Prepare a condensed income statement for the year on both bases for comparative purposes.

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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[The following information applies to the questions displayed below.] A company began January with 4,000 units of its principal product. The cost of each unit is $7. Inventory transactions for the month of January are as follows: Date of Purchase January 10 January 18 Totals * Includes purchase price and cost of freight. Date of Sale January 5 January 12 January 20 Total Average Cost Total Sales Beginning Inventory Purchases: January 10 January 18 Units 3,000 4,000 7,000 Units 5,000 units were on hand at the end of the month. 4. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system. 2,000 1,000 3,000 6,000 Number of units Purchases Unit Cost* $8 9 Cost of Goods Available for Sale Unit Cost 4,000 $7.00 3,000 $8.00 4,000 $9.00 11,000 Cost of Goods Available for Sale $ 28,000 Total Cost $ 24,000 36,000 $ 60,000 24,000 36,000 $ 88,000 Answer is not complete. Cost of Goods Sold - Average Cost Number of units sold 77,000 X Average Cost…
Widget Tek Inc.'s original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Tek Inc.'s main product for March. Inventory Date Quantity Unit Cost Total Cost Mar. 1 850 $98 $ 83,300 1,275 $95 $121, 125 Mar. 8 650 $98 $63, 700 Mar. 11 325 $98 $31, 850 Mar. 14 325 $ 98 $31,850 780 $103 $80, 340 Mar. 22 260 $98 $25, 480 Mar. 25 260 $98 $25, 480 1,900 $102 $193,800 Study the inventory record for March and answer the questions that follow. 1. Assuming that the product sells for $150 and that 90% of sales are on account, determine the gross profit from sales for March. $fill in the blank 2. Making the same assumptions as in (1), determine the ending inventory cost for March. $fill in the blank 3. Which inventory method is being used?
2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
[The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Assume the perpetual inventory system is used. Required: Activities Beginning inventory Sales Purchase Sales Purchase Totals Specific Identification Purchase Date January 1 January 20 January 30 Complete this question by entering your answers in the tabs below. FIFO Activity Units Acquired at Cost 180 units @ $10.50 = LIFO Available for Sale Beginning inventory Purchase Purchase 110 units 270 units @ 560 units # of units 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2. Determine the cost assigned to ending inventory…
Required information Use the following information for the Exercises 3-7 below. (Algo) [The following information applies to the questions displayed below.) Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 300 units from the January 30 purchase, 5 units from the January 20 purchase, and 25 units. from beginning inventory. Date January 11 January 10 January 201 January 25, January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals Exercise 5-3 (Algo) Perpetual: Inventory costing methods LO P1 Assume the perpetual inventory system is used. Required: Complete this question by entering your answers in the tabs below. Purchase Date January 11 FIFO Units Acquired at Cost. 200 units @ $12.50 130 units@ $ 11.50 = 300 units @ $ 11.00 = 630 units 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2.…
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Hemming Company reported the following current-year purchases and sales for its only product. Date Activities March 14 January 1 Beginning inventory January 10 Sales Purchase Sales Purchase Sales Purchase March 15 July 30 October 5 October 26 Totals Units Acquired at Cost @$10 200 units 350 units 450 units 100 units 1,100 units Goods Purchased @ $15 @ $20 $25 Complete this question by entering your answers in the tabs below. $ 2,000 5,250 9,000 1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. 2. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. 3. Compute the gross profit for FIFO method and LIFO method. Required 1 Required 2 Required 3 Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Perpetual FIFO: Cost of Goods Sold 2,500 $ 18,750 Exercise 5-8 (Static) Perpetual: Inventory costing methods-FIFO and LIFO LO P1 Required: Hemming uses a perpetual inventory system. Units…
Required information Use the following information for the Exercises 3-7 below. (Algo) [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 310 units from the January 30 purchase, 5 units from the January 20 purchase, and 30 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals Assume the perpetual inventory system is used. Required: Sales Req 1 Req 2 to 4 Units Acquired at Cost 205 units @ $ 13.00 = 140 units @ $ 12.00 = Complete this question by entering your answers in the tabs below. 310 units @ 655 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 LAKER COMPANY For Month Ended January 31 Weighted Average $ 11.50 = 1. Compute gross profit for the month of January for Laker Company…
Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. Activities Jan. 1 Beginning inventory Date Units Acquired at Cost 165 unitse $9.00 - $1, 485 Units sold at Retail Jan. 10 Sales 125 units e $18.00 Jan. 20 Purchase 110 unitse $8.00 - 880 Jan. 25 Sales 125 units @ $18.00 Jan. 30 Purchase 230 units@ $7.50 = 1,725 Totals 505 units $4,090 250 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 255 units, where 230 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory. Exercise 5-3 Perpetual: Inventory costing methods LO P1 Required: 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2. Determine the cost assigned to ending inventory and to…
[The following information applies to the questions displayed below.] Hemming Co. reported the following current-year purchases and sales for its only product. Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 195 units @ $13.80 = $ 2,691 Jan. 10 Sales 185 units @ $43.80 Mar. 14 Purchase 345 units @ $18.80 = 6,486 Mar. 15 Sales 235 units @ $43.80 July 30 Purchase 495 units @ $23.80 = 11,781 Oct. 5 Sales 205 units @ $43.80 Oct. 26 Purchase 695 units @ $28.80 = 20,016 Totals 1,730 units $ 40,974 625 units Required: Hemming uses a perpetual inventory system. Compute the gross margin for FIFO method. Sales revenue Less: cost of goods sold Gross Margin…
Required information [The following information applies to the questions displayed below.] A company began January with 7,000 units of its principal product. The cost of each unit is $6. Inventory transactions for the month of January are as follows: Date of Purchase January 10 January 18 Totals Total * Includes purchase price and cost of freight. Date of Sale January 5 January 12 January 20 Total Sales LIFO Beginning Inventory Purchases: Units 6,000 7,000 13,000 January 10 January 18 Units 10,000 units were on hand at the end of the month. 3,000 3,000 4,000 10,000 2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system. Cost of Goods Available for Sale Cost of Goods Available for Sale Number Cost per of units unit Purchases Unit Cost* $7 8 7,000 $ 6.00 6,000 $ 7.00 7,000 $ 8.00 20,000 $ $ 42,000 Total Cost $ 42,000 56,000 $ 98,000 42,000 56,000 140,000 Cost of Goods Sold - Periodic LIFO Cost of Goods Sold Number of units sold Cost per…