Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter 6, Problem 6.7BE
To determine
Lower-of-cost-or-market
The lower-of-cost-or-market (LCM) is a method which requires the reporting of the ending merchandise inventory in the financial statement of a company, at its current market value or at is historical cost price, whichever is less.
To Compute: The lower-of-cost-or-market valuation for the company’s inventory.
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Presented below is information related to Blowfish radios for the Hootie Company for the month of July.
Check below image for information
Instructions(a) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions.(1) FIFO.(2) LIFO.(3) Weighted-average.(b) Answer the following questions.(1) Which of the methods used above will yield the lowest figure for gross profit for the income statement? Explain why.(2) Which of the methods used above will yield the lowest figure for ending inventory for the balance sheet? Explain why.
Ch 9 Problem Set B
Problem 9-1 Part B
The company uses the perpetual inventory method.
It began the month of March with 100 units of inventory, at a unit cost of $55.
Purchases during March
March 5, 60 units at $60 each.
March 18, 200 units at $65 each
March 29, 40 units at $75 each.
Sales during March
March 12, 60 units.
March 25, 210 units.
All units were sold to customer for $100 each.
1. Use the following format to set up this inventory costing problem, as shown in Video #2.
Inventory
Date
Units
Cost per
Total Cost
Date
Units
Total Cost
Unit
Beg Balance
Units
Cost
Beginning Balance
+ Purchases
Goods Available for Sale
- Sold
Ending Balance
WHAT IS THE WEIGHTED-AVERAGE COST PER UNIT BASE OFF THE CHART??
You are provided with the following information for Concord Inc. for the month ended June 30, 2020. Concord uses the periodic method for inventory.
Date
Description
Quantity
Unit Cost orSelling Price
June 1
BEGINNING INVENTORY
39
41
June 4
PURCHASE
139
46
June 10
SALE
111
68
June 11
SALE RETURN
14
68
June 18
PURCHASE
53
47
June 18
PURCHASE RETURN
9
47
June 25
SALE
68
73
June 28
PURCHASE
32
51
Chapter 6 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. 6 - The key to successful business operations is...Ch. 6 - Prob. 2QCh. 6 - What is just-in-time inventory management? What...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - What is the major advantage and major disadvantage...Ch. 6 - The selection of an inventory cost flow method is...
Ch. 6 - Which assumed inventory cost flow method: (a)...Ch. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 18QCh. 6 - Why is it inappropriate for a company to include...Ch. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - Prob. 22QCh. 6 - When perpetual inventory records are kept, the...Ch. 6 - How does the average-cost method of inventory...Ch. 6 - Prob. 25QCh. 6 - Prob. 6.1BECh. 6 - Prob. 6.2BECh. 6 - Prob. 6.3BECh. 6 - Prob. 6.4BECh. 6 - Prob. 6.5BECh. 6 - Prob. 6.6BECh. 6 - Prob. 6.7BECh. 6 - Prob. 6.8BECh. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - Prob. 6.11BECh. 6 - Prob. 6.1DIECh. 6 - Prob. 6.2DIECh. 6 - Prob. 6.3ADIECh. 6 - Prob. 6.3BDIECh. 6 - Prob. 6.1ECh. 6 - Prob. 6.2ECh. 6 - Prob. 6.3ECh. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Prob. 6.6ECh. 6 - Prob. 6.7ECh. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Prob. 6.11ECh. 6 - Prob. 6.12ECh. 6 - Prob. 6.13ECh. 6 - Inventory data for Jeters Company are presented in...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Prob. 6.1APCh. 6 - Prob. 6.2APCh. 6 - Prob. 6.3APCh. 6 - Prob. 6.4APCh. 6 - Prob. 6.5APCh. 6 - Prob. 6.6APCh. 6 - Prob. 6.7APCh. 6 - Prob. 6.8APCh. 6 - Prob. 6.9APCh. 6 - Prob. 6.1CACRCh. 6 - Prob. 6.1EYCTCh. 6 - Prob. 6.2EYCTCh. 6 - Prob. 6.3EYCTCh. 6 - Prob. 6.4EYCTCh. 6 - The July 15, 2010, edition of CFO.com contains an...Ch. 6 - Prob. 6.7EYCTCh. 6 - Prob. 6.8EYCTCh. 6 - Prob. 6.9EYCTCh. 6 - Prob. 6.10EYCTCh. 6 - Prob. 6.11EYCTCh. 6 - Prob. 6.1IFRSCh. 6 - Prob. 6.2IFRSCh. 6 - Prob. 6.3IFRS
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- Data on the physical inventory of Ashwood Products Company as of December 31 follow: Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Instructions Determine the inventory at cost as well as at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: 1. Draw a line through the quantity and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the Lower of C or M column. The first item on the inventory sheet has been completed as an example.arrow_forwardUse the last-in, first-out (LIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forwardData on the physical inventory of Katus Products Co. as of December 31 follow: Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Instructions Determine the inventory at cost as well as at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item: 1. Draw a line through the quantity and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed as an example.arrow_forward
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- Telamark Company uses the moving weighted average method for inventory costing.The following incomplete inventory sheet regarding Product W506 is available for the month of March 2020. Complete the inventory sheet. (Image 1 attached) Note: March 4 reflects a return made by a customer of incorrect items shipped on March 3; these items were returned to inventory.2. Analysis Component:The gross profit realized on the sale of Product W506 during February 2020 was 39.19%. The selling price was $166 during both February and March. Calculate the gross profit ratio for Product W506 for March 2020 and determine whether the change is favorable or unfavorable from February. (Round your intermediate calculations and final answer to 2 decimal places.) Gross Profit Ratio =?arrow_forwardNevens Company uses a periodic inventory system. During November, the following transactions occurred: 1. Compute the cost of goods sold for November and the inventory at the end of November for each of the following cost flow assumptions: a. FIFO b. LIFO c. Average cost 2. Next Level What can you conclude about the effects of the inventory cost flow assumptions on the financial statements?arrow_forwardHelparrow_forward
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Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License