Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business. First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out. Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first. Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company. Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales. Current Ratio : It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year. 1. To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per: (a) LIFO numbers (b) FIFO numbers

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Answer 1

Question

Chapter 5, Problem 11E

To determine

Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company.

Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales.

Current Ratio: It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year.

1.

To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per:
(a) LIFO numbers
(b) FIFO numbers

To determine

2.

To interpret: Results of part 1.

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Answer 2

Question

Chapter 5, Problem 11E

To determine

Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company.

Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales.

Current Ratio: It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year.

1.

To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per:
(a) LIFO numbers
(b) FIFO numbers

To determine

2.

To interpret: Results of part 1.

Expert Solution & Answer

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Answer 3

Question

Chapter 5, Problem 11E

To determine

Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company.

Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales.

Current Ratio: It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year.

1.

To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per:
(a) LIFO numbers
(b) FIFO numbers

To determine

2.

To interpret: Results of part 1.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 5, Problem 11E

To determine

Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company.

Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales.

Current Ratio: It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year.

1.

To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per:
(a) LIFO numbers
(b) FIFO numbers

To determine

2.

To interpret: Results of part 1.

Expert Solution & Answer

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Answer 5

Chapter 5, Problem 11E

To determine

Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company.

Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales.

Current Ratio: It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year.

1.

To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per:
(a) LIFO numbers
(b) FIFO numbers

To determine

2.

To interpret: Results of part 1.

Answer 6

Chapter 5, Problem 11E

To determine

Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company.

Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales.

Current Ratio: It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year.

1.

To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per:
(a) LIFO numbers
(b) FIFO numbers

Answer 7

Chapter 5, Problem 11E

To determine

Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

First in first out: In case of First in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in first out: In case of Last in, First out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Inventory turnover ratio: It depicts the fraction of inventory sold or used by the company within a fiscal year. It states a ratio which shows the number of times goods were sold during an accounting period which thereby states the productivity or the efficiency level of the company regarding the inventory which apparently is the biggest asset for the company.

Days’ sales in inventory: It indicates the days taken up by the company to convert the stock items into actual sales.

Current Ratio: It depicts the efficiency of the company to set off its liabilities with the assets within a fiscal year.

1.

To compute: Current ratio, inventory turnover and days’ sales in inventory for 2017 as per:
(a) LIFO numbers
(b) FIFO numbers

Answer 8

To determine

2.

To interpret: Results of part 1.

Answer 9

To determine

2.

To interpret: Results of part 1.

Answer 10

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Answer 11

Expert Solution & Answer

Answer 12

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Answer 13

Ch. 5 - Prob. 1MCQ Ch. 5 - Prob. 2MCQ Ch. 5 - Prob. 3MCQ Ch. 5 - Prob. 4MCQ Ch. 5 - Prob. 5MCQ Ch. 5 - Prob. 6MCQ Ch. 5 - Describe how costs flow inventory to cost of goods...Ch. 5 - Where is the amount of merchandise inventory...Ch. 5 - Why are incidental costs sometimes ignored in...Ch. 5 - Prob. 4DQ

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2.

To interpret: Results of part 1.

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Chapter 5 Solutions

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2. To interpret: Results of part 1.

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Chapter 5 Solutions

2.

To interpret: Results of part 1.