28 Numbers 28-30(Inventory Estimation – Retail Method)The following obtained from the Promises' records:CostRetailInventory, beginningPurchases1,500,7507,445,250 10,867,7092,182,291Freight-in269,250Purchase discount300,000150,000Purchase returns217,500Purchase allowance525,00075,000Abnormal spoilages and breakagesDepartmental transfer debitDepartmental transfer creditNet mark-up108,750900,0001,305,000675,000978,7501,800,000Net mark-down580,8679,750,000SalesSales discount487,500390,000585,000Sales allowanceSales returnsEmployees special discountNormal spoilages and breakages425,00054,00029. Using the average method, what is the cost of ending inventory and cost of goods sold?Ending InventoryCost of Goods solda. 2,719,578b. 2,613,200c. 2,636,326d. 2,700,0005,670,6725,777,0505,753,9245,700,00030. Using the conservative method, what is the cost of ending inventory and cost of goods sold?Ending InventoryCost of Goods solda. 2,719,578b. 2,613,2005,670,6725,777,050c. 2,636,326d. 2,700,0005,753,9245,700,000

The retail inventory method is a useful way to determine the value of inventory. Under this method,…

The following obtained from the Promises' records: Cost Retail Inventory, beginning 1,500,750 2,182,291 Purchases 7,445,250 10,867,709 Freight-in 269,250 Purchase discount 300,000 Purchase returns 150,000 217,500 Purchase allowance 525,000 Abnormal spoilages and breakages 75,000 108,750 Departmental transfer debit 900,000 1,305,000 Departmental transfer credit 675,000 978,750 Net mark-up Net mark-down Sales Sales discount 1,800,000 580,867 9,750,000 487,500 390.000

The following obtained from the Promises' records: Cost Retail Inventory, beginning 1,500,750 2,182,291 Purchases 7,445,250 10,867,709 Freight-in 269,250 Purchase discount 300,000 Purchase returns 150,000 217,500 Purchase allowance 525,000 Abnormal spoilages and breakages 75,000 108,750 Departmental transfer debit 900,000 1,305,000 Departmental transfer credit 675,000 978,750 Net mark-up Net mark-down Sales Sales discount 1,800,000 580,867 9,750,000 487,500 390.000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 44E: Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual...

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31. Apply the Retail Inventory Method to calculate the cot of ending invery Cost Beginning inventory Net purchanes Sales Ratail $20.224 $31600 59.508 97000 .00
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Under the periodic inventory system, the entry to record a purchase of P60,000, with terms 2/10. n/30 would include a. Debit to Accounts Payable for P58,800 b. Credit to Purchases for P60,000 c. Credit to Accounts Payable for P60,000 d. Debit to Purchase Discounts for P1,200
d The records of Cordova Corp. showed the following transactions, in the order given, relating to the major inventory item: Required: Complete the following schedule for each independent assumption. (Round unit costs to the nearest cent.) a. 1. Inventory 2. Purchase 3. Sale (at $15.20) 4. Purchase 5. Sale (at $15.20) 6. Purchase 7. Sale (at $18.20) 8. Purchase Independent Assumptions FIFO Weighted average, periodic inventory system Moving average, perpetual inventory system b. Unit Units Cost 5,600 $7.00 11,200 7.30 7,900 10,200 7.60 16,800 18,800 7.76 16,800 11,200 7.90 C. $ Ending Inventory 121,848 121,675 X 121,676 Units and Amounts Cost of Goods Sold $ 311,000 311,064 311,328 $ Gross Margin 370,200 370,136 X 369,872
Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items? Item InventoryQuantity Cost perUnit Market Valueper Unit TotalCost TotalMarket A 300 $15.00 $14.50 $4,500 $4,350 B 200 14.00 15.00 2,800 3,000 C 100 17.00 17.50 1,700 1,750 a. $8,850 b. $9,100 c. $9,250 d. $9,000
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Determining the Beginning and Ending Inventory from a Partial Spreadsheet: Periodic Inventory System From the following partial spreadsheet, indicate the dollar amount of beginning and ending merchandise inventory to be used to compute cost of goods sold. ADJUSTMENTS ADJUSTED TRIAL BALANCE ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT Merchandise Inventory 60,000.00 55,000.00 60,000.00 Estimated Returns Inventory 6,000.00 5,500.00 6,000.00 Supplies 4,700.00 3,300.00 Prepaid Insurance 1,600.00 3,800.00 Customer Refunds Payable 2,200.00 7,200.00 Income Summary 55,000.00 60,000.00 55,000.00 60,000.00 5,500.00 6,000.00 5,500.00 6,000.00 Sales 525,140.00 Sales Returns and Allowances 2,200.00 16,700.00 Beginning inventory Ending inventory $4 %24
I computed 72,540 but is checked wrong why?
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Inventory Valuation Specific identification method Weighted average cost method FIFO method LIFO method LIFO liquidation LIFO conformity rule LIFO reserve Replacement cost Inventory profit Lower-of-cost-or-market (LCM) rule Inventory turnover ratio Number of days sales in inventory Moving average (Appendix) The name given to an average cost method when a weighted average cost assumption is used with a perpetual inventory system. An inventory costing method that assigns the same unit cost to all units available for sale during the period. A conservative inventory valuation approach that is an attempt to anticipate declines in the value of inventory before its actual sale. An inventory costing method that assigns the most recent costs to ending inventory. The current cost of a unit of inventory. An inventory costing method that assigns the most recent costs to cost of goods sold. A measure of how long it takes to sell inventory. The IRS requirement that when LIFO is used on a tax return, it must also be used in reporting income to stockholders. An inventory costing method that relies on matching unit costs with the actual units sold. The portion of the gross profit that results from holding inventory during a period of rising prices. The result of selling more units than are purchased during the period, which can have negative tax consequences if a company is using LIFO. The excess of the value of a companys inventory stated at FIFO over the value stated at LIFO. A measure of the number of times inventory is sold during the period.