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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

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Answer 1

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

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#58 Which of the following is not a retrospective-type accounting change? Question 58 options: a Sum-of-the-years'-digits method to the straight-line method b LIFO method to the FIFO method for inventory valuation c "Full cost" method to another method in the extractive industry d Completed-contract method to the percentage-of-completion method for long-term construction contracts Previous PageNext Page

Problem 11-25 Multiple choice (IAA) 1. IFRS prohibits which cost flow assumption? a. LIFO b. Specific identification 6. Weighted average i Any of these cost flow assumptions is allowed с. , What is the inventory pricing procedure in which the oldest costs rarely have an effect on the ending inventory? a. FIFO b. LIFO c. Specific identification d. Weighted average 3. In a period of falling prices which inventory method generally provides the lowest amount of ending inventory? a. Weighted average b. FIFO c. Moving average d. Specific identification 4. Which inventory cost flow assumption would consistently result in the highest income in a period of rising prices or inflation? a. FIFO b. LIFO c. Weighted average d. Specific identification 3. The costing of inventory must be deferred until the end of reporting period under which of the following method of inventory valuation? a. Moving average b. Weighted average c. LIFÓ perpetual d. FIFO perpetual

Question 63 Modified True or False T means Correct and F means Wrong I. The longer its customers normally hold inventory, the longer the credit period supplier firms normally offer. Still, suppliers have some flexibility in the credit terms they offer. If a supplier lengthens the credit period offered, this will shorten the customer's cash conversion cycle but lengthen the supplier firm's own CCC. II. The cash conversion cycle (CCC) combines three factors: The inventory conversion period, the receivables collection period, and the payables deferral period, and its purpose is to show how long a firm must finance its working capital. Other things held constant, the shorter the CCC, the more effective the firm's working capital management. III. The target cash balance is typically (and logically) set so that it does not need to be adjusted for either seasonal patterns or unanticipated random fluctuations. IV. A firm's peak borrowing needs will probably be overstated if it bases its…

Answer 2

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Expert Solution & Answer

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Answer 3

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 9.6BYP

(a)&(b)

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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Answer 6

Chapter 9, Problem 9.6BYP

(a)&(b)

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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

Answer 7

Chapter 9, Problem 9.6BYP

(a)&(b)

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: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

Answer 8

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Answer 9

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

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Answer 13

Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q

Solution Summary: The author explains the accounting treatment for a change in the inventory method.

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

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