Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc. There are several methods of calculating the value of inventory in closing stock which are as below: FIFO method (First In First Out) is the most using method of inventory valuation . The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on. LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter. Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate. Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available. Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly. Requirement-1: To Calculate: In the given question we have to calculate the following details under perpetual inventory system: Cost of goods and quantity available for sale

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Answer 1

Question

Chapter 6, Problem 3PSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Requirement-2:

To determine

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

Requirement-3:

To determine

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

Requirement-4:

To determine

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-5:

To determine

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

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Problem No. 1 On January 1, 2025, Manuel Cruz and Sherimae Diasalo agreed to form a partnership that will manufacture and sell biscuits. The partnership agreement specified that Cruz is to invest cash of P1,000,000 and Diasalo is to contribute land and building to serve as the office and factory of the business. The following amounts are applicable to the property of Diasalo: Acquisition Cost Fair Market Value Land Building P1,000,000 500,000 P1,500,000 850,000 During the formation, it was found out that Cruz has accounts receivable amounting to P70,000 and the partners agreed that it will be assumed by the partnership. The name of the partnership will be Fita Pan. Required: 1. Prepare journal entry to record: a. The investment of Cruz to the partnership b. The investment of Diasalo to the partnershipood relay ni 000,219 2. Prepare the statement of financial position of the partnership as of January 1, 2025 Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February…

Answer 2

Question

Chapter 6, Problem 3PSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Requirement-2:

To determine

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

Requirement-3:

To determine

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

Requirement-4:

To determine

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-5:

To determine

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 6, Problem 3PSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Requirement-2:

To determine

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

Requirement-3:

To determine

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

Requirement-4:

To determine

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-5:

To determine

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 3PSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Requirement-2:

To determine

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

Requirement-3:

To determine

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

Requirement-4:

To determine

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-5:

To determine

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 3PSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Requirement-2:

To determine

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

Requirement-3:

To determine

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

Requirement-4:

To determine

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

Requirement-5:

To determine

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Answer 6

Chapter 6, Problem 3PSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Answer 7

Chapter 6, Problem 3PSB

To determine

Perpetual Inventory system is an inventory system in which a organization continuously update its inventory records. All the movements related to inventory are updated continuously such as purchase quantity, sales quantity, and purchase or sales return etc.

There are several methods of calculating the value of inventory in closing stock which are as below:

FIFO method (First In First Out) is the most using method of inventory valuation. The quantity which comes first in stock will be sold first. In closing inventory the quantity will be counted from the last purchase and so on.

LIFO method (Last In First Out) is the method in which the quantity which purchase in last before sale transaction will be sold first. In closing inventory the quantity will be counted from the beginning inventory and purchase thereafter.

Weighted Average method is the most commonly used method after FIFO method. In weighted average the quantity of all purchases and beginning inventory is clubbed and then a weighted average rate is calculated and closing inventory is valued at weighted average rate.

Specific Identification method is the method in which the quantity is specifically identified that from which lot or purchases the closing stock is available and the closing inventory is valued by taking rates and quantities of that specific lot(s) from which closing inventory is available.

Under perpetual method a job card is prepared for each lot and calculation is done for each lot/transactions accordingly.

Requirement-1:

To Calculate:

In the given question we have to calculate the following details under perpetual inventory system:

Cost of goods and quantity available for sale

Answer 8

Requirement-2:

To determine

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

Answer 9

Requirement-2:

To determine

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

Answer 10

Requirement-3:

To determine

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

Answer 11

Requirement-3:

To determine

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

Answer 12

Requirement-4:

To determine

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

Answer 13

Requirement-4:

To determine

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

Answer 14

Requirement-5:

To determine

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Answer 15

Requirement-5:

To determine

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 6 - Inventory ownership Homestead Crafts, a...Ch. 6 - QS 6-2 Inventory costs C2 A car dealer acquires a...Ch. 6 - Prob. 3QS Ch. 6 - Prob. 4QS Ch. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Inventory costing with LIFO Refer to...Ch. 6 - Perpetual Inventory costing with weighted average...Ch. 6 - Periodic: Inventory costing with FIFO P3 Refer to...Ch. 6 - Periodic: Inventory costing with LIFO Refer to the...Ch. 6 - Periodic: Inventory costing with weighted average...

Concept explainers

Videos

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Want to see the full answer?

Chapter 6 Solutions

Concept explainers

Videos

To calculate: We have to calculate units in closing stock under perpetual inventory system.

To calculate: We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

To calculate: We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.

We have to determine that manager will prefer valuation method as it earns on percentage of gross profit.

Want to see the full answer?

Chapter 6 Solutions

To calculate:

We have to calculate units in closing stock under perpetual inventory system.

To calculate:

We have to calculate cost of closing inventory using FIFO, LIFO, Weighted Average and Specific Identification method.

To calculate:

We have to calculate gross profit under FIFO, LIFO, and Weighted Average and Specific Identification method under perpetual inventory system.