Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods: FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period. LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory. Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period. To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

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Answer 1

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Chapter 8, Problem 8.8BYP

1.

To determine

Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

2.

To determine

To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

3.

To determine

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

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Answer 2

Question

Chapter 8, Problem 8.8BYP

1.

To determine

Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

2.

To determine

To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

3.

To determine

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

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Answer 3

Question

Chapter 8, Problem 8.8BYP

1.

To determine

Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

2.

To determine

To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

3.

To determine

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.8BYP

1.

To determine

Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

2.

To determine

To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

3.

To determine

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.8BYP

1.

To determine

Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

2.

To determine

To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

3.

To determine

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

Answer 6

Chapter 8, Problem 8.8BYP

1.

To determine

Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

Answer 7

Chapter 8, Problem 8.8BYP

1.

To determine

Method of Inventory: Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO: Under this inventory method, the units that are purchased first are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO: Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method: Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To explain: as to why Company K is disclosing the replacement cost of its LIFO inventory.

Answer 8

2.

To determine

To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

Answer 9

2.

To determine

To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

Answer 10

3.

To determine

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

Answer 11

3.

To determine

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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To Calculate: the beginning inventory and ending inventory that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

To Calculate: the cost of goods sold that would have been for the year ended February 2, 2014 if Company K had used FIFO for all of its inventories.

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