LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases. To compute: Current ratio , inventory turnover, and days’ sales in inventory.

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Answer 1

Question

Chapter 5, Problem 18E

1. (a)

To determine

Introduction: LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

1. (b)

To determine

Introduction: FIFO means first in first out. It is an inventory valuation method. The amount incurred on the first product will be realized first. Sales are computed using price of older purchase while inventory is computed using recent purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

2

To determine

Introduction: Inventory valuation is the methods used by the companies to determine the value of ending inventory while preparing the financial statements. Different company uses different valuation methods. Inventory valuation impacts the cost of goods sold and net income.

To comment: On the results of current ratio, inventory turnover, and days’ sales in inventory.

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Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of sold using FIFO for comparison purposes. LIFO inventory LIFO cost of goods sold FIFO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO number Current ratio Inventory turnover Days' sales in inventory Answer is not complete. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. Current ratio Inventory turnover Days' sales in inventory Current ratio Inventory turnover Days' sales in inventory $ $ $ $ Year 2 $ 290 870 360 825 350 420 170 Numerator 1 Denominator 350.0 / $ $ 870.0 111.0 X $ $ $ Numerator 1 350.0 / (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers.…

s Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes. LIFO inventory LIFO cost of goods sold FIFO inventory FIFO cost of goods sold i Current assets (using LIFO) Current assets (using FIFO) Current liabilities 110 645 180 180 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. Year 2 $ 160 740 240 660 220 300 200 Current rabo Inventory tumover Days' sales in inventory (a) Compute its current ratio, Inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. Denominator Current ratio Inventory turnover have sales in invandrn Year 1 $ 110 680 Numerator (b) Computa its current ratio, inventory turnover, and days' sales in inventory for Year 2 uning FIFO numbers. Denominator Ratio Numerator Ratio

Cruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes. LIFO inventory LIFO cost of goods sold PIPO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities Year 2 $ 160 740 240 660 220 300 200 Year 1 $ 110 680 110 645 180 100 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers.

Answer 2

Question

Chapter 5, Problem 18E

1. (a)

To determine

Introduction: LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

1. (b)

To determine

Introduction: FIFO means first in first out. It is an inventory valuation method. The amount incurred on the first product will be realized first. Sales are computed using price of older purchase while inventory is computed using recent purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

2

To determine

Introduction: Inventory valuation is the methods used by the companies to determine the value of ending inventory while preparing the financial statements. Different company uses different valuation methods. Inventory valuation impacts the cost of goods sold and net income.

To comment: On the results of current ratio, inventory turnover, and days’ sales in inventory.

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Answer 3

Question

Chapter 5, Problem 18E

1. (a)

To determine

Introduction: LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

1. (b)

To determine

Introduction: FIFO means first in first out. It is an inventory valuation method. The amount incurred on the first product will be realized first. Sales are computed using price of older purchase while inventory is computed using recent purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

2

To determine

Introduction: Inventory valuation is the methods used by the companies to determine the value of ending inventory while preparing the financial statements. Different company uses different valuation methods. Inventory valuation impacts the cost of goods sold and net income.

To comment: On the results of current ratio, inventory turnover, and days’ sales in inventory.

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Answer 4

Question

Chapter 5, Problem 18E

1. (a)

To determine

Introduction: LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

1. (b)

To determine

Introduction: FIFO means first in first out. It is an inventory valuation method. The amount incurred on the first product will be realized first. Sales are computed using price of older purchase while inventory is computed using recent purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

2

To determine

Introduction: Inventory valuation is the methods used by the companies to determine the value of ending inventory while preparing the financial statements. Different company uses different valuation methods. Inventory valuation impacts the cost of goods sold and net income.

To comment: On the results of current ratio, inventory turnover, and days’ sales in inventory.

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Answer 5

Chapter 5, Problem 18E

1. (a)

To determine

Introduction: LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

1. (b)

To determine

Introduction: FIFO means first in first out. It is an inventory valuation method. The amount incurred on the first product will be realized first. Sales are computed using price of older purchase while inventory is computed using recent purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

2

To determine

Introduction: Inventory valuation is the methods used by the companies to determine the value of ending inventory while preparing the financial statements. Different company uses different valuation methods. Inventory valuation impacts the cost of goods sold and net income.

To comment: On the results of current ratio, inventory turnover, and days’ sales in inventory.

Answer 6

Chapter 5, Problem 18E

1. (a)

To determine

Introduction: LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

Answer 7

Chapter 5, Problem 18E

1. (a)

To determine

Introduction: LIFO means last in first out. It is an inventory valuation method. The amount incurred on the last product will be realized first. Sales are computed using price of recent purchase while inventory is computed using older purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

Answer 8

1. (b)

To determine

Introduction: FIFO means first in first out. It is an inventory valuation method. The amount incurred on the first product will be realized first. Sales are computed using price of older purchase while inventory is computed using recent purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

Answer 9

1. (b)

To determine

Introduction: FIFO means first in first out. It is an inventory valuation method. The amount incurred on the first product will be realized first. Sales are computed using price of older purchase while inventory is computed using recent purchases.

To compute: Current ratio, inventory turnover, and days’ sales in inventory.

Answer 10

2

To determine

Introduction: Inventory valuation is the methods used by the companies to determine the value of ending inventory while preparing the financial statements. Different company uses different valuation methods. Inventory valuation impacts the cost of goods sold and net income.

To comment: On the results of current ratio, inventory turnover, and days’ sales in inventory.

Answer 11

2

To determine

Introduction: Inventory valuation is the methods used by the companies to determine the value of ending inventory while preparing the financial statements. Different company uses different valuation methods. Inventory valuation impacts the cost of goods sold and net income.

To comment: On the results of current ratio, inventory turnover, and days’ sales in inventory.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 5 - Prob. 1QS Ch. 5 - Prob. 2QS Ch. 5 - Prob. 3QS Ch. 5 - Prob. 4QS Ch. 5 - Perpetual: Inventory costing with FIFO P1 A...Ch. 5 - Prob. 6QS Ch. 5 - Prob. 7QS Ch. 5 - Prob. 8QS Ch. 5 - Prob. 9QS Ch. 5 - A Periodic: Inventory costing with weighted...

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Chapter 5 Solutions