Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 5, Problem 11SE
Inventory principles and terminology (Learning Objectives 1, 3, 4, & 5) 5-10 min.
Match the accounting terms on the right with the corresponding definitions on the left.
| _______ 1. Assigns the most recent inventory costs to ending inventory | a. Conservatism |
| _______ 2. Results in cost of goods sold that falls between what FIFO and LIFO produce, assuming rising prices | b. Full-disclosure |
| _______ 3. Principle that is the basis for using the lower-of-cost-or-market rule | c. LIFO |
| _______ 4. Principle that prevents a company from using a different inventory costing method each year | d. Average cost |
| _______ 5. Identifies exactly which inventory item was sold: usually used for unique inventory items | e. FIFO |
| _______ 6. Requires a company to report enough information for outsiders to make decisions | f. Consistency |
| _______ 7. Treats the most recent/newest purchases as the first units sold | g. Materiality |
| _______ 8. Principle that states significant items must conform to GAAP | h. Specific-identification |
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Lesson 7: Valuing Inventory
11. Describe how to find inventory value using the average cost method.
(Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Griffin Company’s inventory records for its retail division show thefollowing at December 31:Dec 1 Beginning inventory ............... 9 units @ $165 = $1,48515 Purchase................................. 5 units @ 166 = $ 83026 Purchase................................. 13 units @ 175 = $2,275At December 31, 11 of these units are on hand. Journalize the following for Griffin Companyunder the perpetual system:1. Total December purchases in one summary entry. All purchases were on credit.2. Total December sales and cost of goods sold in two summary entries. The selling price was$500 per unit, and all sales were on credit. Assume that Griffin uses the FIFO inventorymethod.3. Under FIFO, how much gross profit would Griffin earn for the month ending December 31?What is the FIFO cost of Griffin Company’s ending inventory?
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Chapter 5 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 5 - Prob. 1DQCh. 5 - How are the financial statements of a manufacturer...Ch. 5 - What is a cost-flow assumption? Why is a cost-flow...Ch. 5 - If a company had two units that cost 1 each in its...Ch. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Prob. 10DQ
Ch. 5 - During April, Bargain Hardware made sales of...Ch. 5 - Prob. 2SCCh. 5 - Prob. 3SCCh. 5 - Prob. 4SCCh. 5 - Prob. 5SCCh. 5 - Prob. 6SCCh. 5 - Prob. 7SCCh. 5 - Prob. 8SCCh. 5 - Prob. 9SCCh. 5 - Prob. 10SCCh. 5 - Prob. 11SCCh. 5 - Prob. 12SCCh. 5 - Prob. 1SECh. 5 - Prob. 2SECh. 5 - Prob. 3SECh. 5 - Prob. 4SECh. 5 - Prob. 5SECh. 5 - Prob. 6SECh. 5 - Prob. 7SECh. 5 - Prob. 8SECh. 5 - Lower-of-cost-or-market rule (Learning Objective...Ch. 5 - Prob. 10SECh. 5 - Inventory principles and terminology (Learning...Ch. 5 - Prob. 12SECh. 5 - Prob. 13SECh. 5 - Prob. 14SECh. 5 - Prob. 15SECh. 5 - Prob. 16AECh. 5 - Prob. 17AECh. 5 - Prob. 18AECh. 5 - Prob. 19AECh. 5 - Prob. 20AECh. 5 - Prob. 21AECh. 5 - Prob. 22AECh. 5 - Prob. 23AECh. 5 - Prob. 24AECh. 5 - Prob. 25AECh. 5 - Prob. 26AECh. 5 - Prob. 27AECh. 5 - FIFO (Learning Objective 2) 10-15 min. Tee Time,...Ch. 5 - LIFO (Learning Objective 2) 10-15 min. Refer to...Ch. 5 - Prob. 30BECh. 5 - Prob. 31BECh. 5 - Prob. 32BECh. 5 - Prob. 33BECh. 5 - Prob. 34BECh. 5 - Prob. 35BECh. 5 - Prob. 36BECh. 5 - Prob. 37BECh. 5 - Prob. 38BECh. 5 - Prob. 39BECh. 5 - Computing LIFO and journalizing inventory...Ch. 5 - Prob. 41APCh. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 43APCh. 5 - Prob. 44APCh. 5 - Prob. 45APCh. 5 - Prob. 46APCh. 5 - Prob. 47APCh. 5 - Prob. 48BPCh. 5 - Prob. 49BPCh. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 51BPCh. 5 - Prob. 52BPCh. 5 - Prob. 53BPCh. 5 - Prob. 54BPCh. 5 - Prob. 55BPCh. 5 - Continuing Exercise This exercise continues the...Ch. 5 - Prob. 1CPCh. 5 - Prob. 1CFSAPCh. 5 - Prob. 1EIACh. 5 - Prob. 2EIACh. 5 - Prob. 1FACh. 5 - Prob. 1IACh. 5 - Prob. 1SBACh. 5 - Prob. 1WCCh. 5 - Prob. 1COP
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- 141 20 28 Totals c. Determin Start by en Once all of hand at the Date Aug. 1 3 12 More info Aug. 1 Aug. 3 Aug. 12 Aug. 15 Aug. 20 Aug. 28 8 $ Beginning merchandise inventory, 10 books @ $15 each Sold 3 books @ $20 each Purchased 8 books @ $18 each Sold 9 books @ $20 each Purchased 4 books @ $20 each Sold 5 books @ $25 each 18 S Print 144 3 $ Done 15 S 45 - X 10 S 7 $ 7 S 8 $ 18 LA CA 15 S 15 S 15 S 18 S CA CAT cord us ew inv of mer Hand To Coarrow_forwardDetermine the cost assigned to ending inventory and to cost of goods sold using weighted average.arrow_forwardP5-5B. Journalizing inventory purchases, sales, returns, and freight transactions using the perpetual inventory system; calculating gross profit (Learning Objectives 3, 4, 5, & 6) 25-30 min. The following transactions for Westcoast Tire Co. occurred during July: Jul Purchased $5,500 of merchandise on account from Meridian Tire Supply. Terms, 1/15, n/45, 4 FOB shipping point. Meridian Tire Supply prepaid the $475 shipping cost and added the amount to the invoice. 7 9 11 13 15 16 18 20 22 23 Purchased $300 of supplies on account from Office Express. Terms, 3/10, n/30, FOB destination. Sold $5,100 (cost, $2,800) of merchandise on account to P. Larson. Terms, 2/15, n/45, FOB destination. Paid $50 freight charges to deliver goods to P. Larson. Returned $500 of the merchandise purchased on July 4 and received a credit. Sold $900 (cost, $545) of merchandise to cash customers. Paid for the supplies purchased on July 7. Paid Meridian Tire Supply the amount due from the July 4 purchase in full.…arrow_forward
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