Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale. Given: G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements. (a) To describe: The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods. (1) LIFO applied to units of product when the periodic inventory system is used. (2) Application of the dollar-value method to LIFO units of product.

Question

Carla Vista Manufacturing Company uses a job order cost system and keeps perpetual inventory records. June 1 Purchased raw materials for $23,600 on account. 8 Raw materials requisitioned by production: $9,440 Direct materials Indirect materials 1,180 Paid factory utilities, $2,478 and repairs for factory equipment, $9,440. 15 25 Incurred $122,000 of factory labor. 25 Time tickets indicated the following: Direct Labor (7,000 hrs x $14 per hr) $98,000 Indirect Labor (3,000 hrs x $8 per hr) 24,000 $122,000 45 25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked. 28 30 Goods costing $18,020 were completed in the factory and were transferred to finished goods inventory. Goods costing $15,020 were sold for $20,020 on account. Prepare journal entries to record the above transactions during the month of June. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit…

Answer 1

Question

Chapter 8, Problem 8CA

To determine

Introduction:

Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.

Given:

G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements.

(a)

To describe:

The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.

(1) LIFO applied to units of product when the periodic inventory system is used.

(2) Application of the dollar-value method to LIFO units of product.

To determine

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

To determine

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.

Expert Solution & Answer

Learn your wayIncludes step-by-step video

See solution

Check out sample textbook solution

04:49

Students have asked these similar questions

Carla Vista Manufacturing Company uses a job order cost system and keeps perpetual inventory records. June 1 Purchased raw materials for $23,600 on account. 8 Raw materials requisitioned by production: $9,440 Direct materials Indirect materials 1,180 Paid factory utilities, $2,478 and repairs for factory equipment, $9,440. 15 25 Incurred $122,000 of factory labor. 25 Time tickets indicated the following: Direct Labor (7,000 hrs x $14 per hr) $98,000 Indirect Labor (3,000 hrs x $8 per hr) 24,000 $122,000 45 25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked. 28 30 Goods costing $18,020 were completed in the factory and were transferred to finished goods inventory. Goods costing $15,020 were sold for $20,020 on account. Prepare journal entries to record the above transactions during the month of June. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit…

PART 2. (22 marks) Mangal Furnishings produce serving trays for the tourist industry in a five-stage process - Cutting & Shaping, Assembly, Sanding, Finishing and Packaging. Upon entering the finishing process, before the trays are stained and polished, a specialized piece of equipment is used to engrave a logo on each tray. After Packaging, the trays are sent to the business warehouse for delivery to customers. The following data relates to the Finishing Process for the month of March during which 3,800 trays valued at $597.90 each were transferred in from the Sanding Process. Other production costs incurred during the month are summarized as follows: Direct Materials Added Direct Manufacturing Wages Hireage cost of specialized logo equipment Manufacturing Overhead $343,380 $830,150 $21,300 $412,100 Process inspection occurs during the process and normally 2% of the trays entering the Finishing process are rejected and sold as scrap to local retailers at $750 each. During the month…

Cline Manufacturing Company uses a job order system and maintains perpetual inventory records. Indicate the the appropriate account(s) to be debited and credited for the transactions listed below. (On multiple entries enter answers in alphabetical order.) Transactions 1. Raw materials were purchased on account. 2. Issued a check to Dixon Machine Shop for repair work on factory equipment. 3. Direct materials were requisitioned for Job 280. 4. Factory labor was paid as incurred. 5. Recognized direct labor and indirect labor used. 6. The production department requisitioned 7. indirect materials for use in the factory. Manufacturing overhead was applied to production based on a predetermined overhead rate of $8 per labor hour. 8. Goods that were completed were transferred to finished goods inventory. 9. Goods costing $80,000 were sold for $105,000 on account. 10. Paid for raw materials purchased previously on account. Account(s) Debited

Answer 2

Question

Chapter 8, Problem 8CA

To determine

Introduction:

Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.

Given:

G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements.

(a)

To describe:

The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.

(1) LIFO applied to units of product when the periodic inventory system is used.

(2) Application of the dollar-value method to LIFO units of product.

To determine

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

To determine

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.

Expert Solution & Answer

Learn your wayIncludes step-by-step video

See solution

Check out sample textbook solution

04:49

Answer 3

Question

Chapter 8, Problem 8CA

To determine

Introduction:

Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.

Given:

G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements.

(a)

To describe:

The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.

(1) LIFO applied to units of product when the periodic inventory system is used.

(2) Application of the dollar-value method to LIFO units of product.

To determine

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

To determine

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.

Expert Solution & Answer

Learn your wayIncludes step-by-step video

See solution

Check out sample textbook solution

04:49

Answer 4

Question

Chapter 8, Problem 8CA

To determine

Introduction:

Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.

Given:

G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements.

(a)

To describe:

The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.

(1) LIFO applied to units of product when the periodic inventory system is used.

(2) Application of the dollar-value method to LIFO units of product.

To determine

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

To determine

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.

Expert Solution & Answer

Learn your wayIncludes step-by-step video

See solution

Check out sample textbook solution

04:49

Answer 5

Chapter 8, Problem 8CA

To determine

Introduction:

Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.

Given:

G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements.

(a)

To describe:

The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.

(1) LIFO applied to units of product when the periodic inventory system is used.

(2) Application of the dollar-value method to LIFO units of product.

To determine

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

To determine

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.

Answer 6

Chapter 8, Problem 8CA

To determine

Introduction:

Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.

Given:

G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements.

(a)

To describe:

The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.

(1) LIFO applied to units of product when the periodic inventory system is used.

(2) Application of the dollar-value method to LIFO units of product.

Answer 7

Chapter 8, Problem 8CA

To determine

Introduction:

Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.

Given:

G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of inventory valuation to the last-in, first-out (LIFO) method of inventory valuation to obtain tax benefits. To make the method acceptable for tax purposes, the change will also be made for its annual financial statements.

(a)

To describe:

The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.

(1) LIFO applied to units of product when the periodic inventory system is used.

(2) Application of the dollar-value method to LIFO units of product.

Answer 8

To determine

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

Answer 9

To determine

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

Answer 10

To determine

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.

Answer 11

To determine

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Learn your wayIncludes step-by-step video

See solution

Check out sample textbook solution

Answer 15

Learn your wayIncludes step-by-step video

See solution

Check out sample textbook solution

Answer 16

Learn your wayIncludes step-by-step video

See solution

Check out sample textbook solution

Answer 17

Learn your wayIncludes step-by-step video

Answer 18

Learn your wayIncludes step-by-step video

Answer 19

Learn your wayIncludes step-by-step video

Answer 20

Learn your way

Answer 21

Includes step-by-step video

Answer 22

See solution

Check out sample textbook solution

Answer 23

Ch. 8 - Prob. 1Q Ch. 8 - 2. Why should inventories be included in (a) a...Ch. 8 - 3. What is the difference between a perpetual...Ch. 8 - Prob. 4Q Ch. 8 - Prob. 5Q Ch. 8 - Prob. 6Q Ch. 8 - Prob. 7Q Ch. 8 - Prob. 8Q Ch. 8 - Prob. 9Q Ch. 8 - Prob. 10Q

(b) To distinguish: Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

(c) To discuss: The general advantages and disadvantages claimed for LIFO methods.

Chapter 8 Solutions

(b)

To distinguish:

Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)

(c)

To discuss:

The general advantages and disadvantages claimed for LIFO methods.