!Required information[The following information applies to the questions displayed below.]A company began 2024 with 17,000 units of inventory on hand. The cost of each unit was $5.00. During 2024, anadditional 35,000 units were purchased at a single unit cost, and 27,000 units remained on hand at the end of 2024(25,000 units therefore were sold during 2024). The company uses a periodic inventory system. Cost of goods sold for2024, applying the average cost method, is $142,500. The company is interested in determining what cost of goods soldwould have been if the FIFO or LIFO methods were used.Required:2. Determine the cost of goods sold for 2024 using the LIFO method.Note: Do not round intermediate calculations.LIFO cost of goods sold

Inventory, based on its intended use and where it is in the manufacturing or distribution process.…

Answered: A company began 2024 with 17,000 units…

A company began 2024 with 17,000 units of inventory on hand. The cost of each unit was $5.00. additional 35,000 units were purchased at a single unit cost, and 27,000 units remained on hand

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 15E: Habicht Company was formed in 2018 to produce a single product. The production and sales for the...

See similar textbooks

Similar questions

Assume your company uses the periodic inventory costing method, and the inventory count left out an entire warehouse of goods that were in stock at the end of the year, with a cost value of $222,000. How will this affect your net income in the current year? How will it affect next years net income?
Habicht Company was formed in 2018 to produce a single product. The production and sales for the next 4 years were as follows: Required: 1. Determine the gross profit for each year under each of the following periodic inventory methods: a. FIFO b. LIFO c. Average cost (Round unit costs to 3 decimal places.) 2. Next Level Explain whether the companys return on assets (net income divided by average total assets) would be higher under FIFO or LIFO.
Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.
Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning inventory is 100,000. 2. Purchases returns of 4,000 were made. 3. Purchases of 300,000 were made on terms of 2/10, n/30. Eighty percent of the discounts were taken. 4. At December 31, purchases of 20,000 were in transit, FOB destination, on terms of 2/10, n/30. 5. The company made sales of 640,000. The gross selling price per unit is twice the net cost of each unit sold. 6. Sales allowances of 6,000 were made. 7. The company uses the LIFO periodic method and the gross method for purchase discounts. Required: 1. Compute the cost of the ending inventory before the physical inventory is taken. 2. Compute the amount of the cost of goods sold that came from the purchases of the period and the amount that came from the beginning inventory.
Inventory Costing and LCM Ortman Enterprises sells a chemical used in various manufacturing processes. On January 1, 2019, Ortman had 5,000,000 gallons on hand, for which it had paid $0.50 per gallon. During 2019, Ortman made the following purchases: During 2019, Ortman sold 65 000,000 gallons at $0.75 per gallon (35,000,000 gallons were sold on June 29 and 30,000,000 gallons were sold on Nov. 22), leaving an ending inventory of 7,000,000 gallons. Assume that Ortman uses a perpetual inventory system. Ortman uses the lower of cost or market for its inventories, as required by generally accepted accounting principles. Required: 1. Assume that the market value of the chemical is $0.76 per gallon on December 31, 2019. Compute the cost of ending inventory using the FIFO and average cost methods, and then apply LCM. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 2. Assume that the market value of the chemical is $0.58 per gallon on December 31, 2019. Compute the cost of ending inventory using the FIFO and average cost methods, and then apply LCM. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.)
The management of Swifty Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is average- cost. The company requests your help in determining the results of operations for 2022 if either the FIFO or the LIFO method had been used. For 2022, the accounting records show these data: Inventories Beginning (8,000 units) Ending (13,000 units) Purchases were made quarterly as follows. Quarter Units 1 50,000 2 (a) 3 4 40.000 40.000 $32,000 60,000 190,000 Unit Cost $4.20 4.35 4.50 4.70 Your Answer Correct Answer Total net sales (185,000 units) Total cost of goods purchased (190,000 units) Total Cost $210,000 174,000 180,000 282,000 $846,000 Operating expenses were $130,000, and the company's income tax rate is 40%. Purchases and Sales Prepare comparative condensed income statements for 2022 under FIFO and LIFO. SWIFTY INC. Condensed Income Statements December 31, 2022 For the Year Ended December 31, 2022 For the Month Ended December 31, 2022 $1,137,750…
A company began 2024 with 16,000 units of inventory on hand. The cost of each unit was $6.00. During 2024, an additional 36,000 units were purchased at a single unit cost, and 26,000 units remained on hand at the end of 2024 (26,000 units therefore were sold during 2024). The company uses a periodic inventory system. Cost of goods sold for 2024, applying the average cost method, is $179,400. The company is interested in determining what cost of goods sold would have been if the FIFO or LIFO methods were used. 1. Determine the cost of goods sold for 2024 using the LIFO method.
A company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company's records under this system reveal the following inventory layers at the beginning of 2024 (listed in chronological order of acquisition): 10,000 units @ $15 15,000 units @ $20 Beginning inventory $ 150,000 300,000 $ 450,000 During 2024, 30,000 units were purchased for $25 per unit. Due to unexpected demand for the company's product, 2024 sales totaled 40,000 units at various prices, leaving 15,000 units in ending inventory. Required: 1. Calculate the amount to report for cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements. Assume an income tax rate of 25%. 3. If the company decided to purchase an additional 10,000 units at $25 per unit at the end of the year, how much income tax currently payable would be saved? Answer is not complete. S 950,000 $…
Causwell Company began 2018 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During2018 an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the endof 2018 (20,000 units therefore were sold during 2018). Causwell uses a periodic inventory system. Cost of goodssold for 2018, applying the average cost method, is $115,000. The company is interested in determining what costof goods sold would have been if the FIFO or LIFO methods were used.Required:1. Determine the cost of goods sold for 2018 using the FIFO method. [Hint: Determine the cost per unit of 2018purchases.]2. Determine the cost of goods sold for 2018 using the LIFO method.
Cansela Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company began 2024 with inventory of 7,000 units of its only product. The beginning inventory balance of $114,000 consisted of the following layers: 3,000 units at $14 per unit 4,000 units at $18 per unit Beginning inventory || || $ 42,000 72,000 $ 114,000 During the three years 2024-2026, the cost of inventory remained constant at $20 per unit. Unit purchases and sales during these years were as follows: Purchases Sales 2024 25,000 26,500 2025 33,000 35,500 2026 27,000 28,500 Required: 1. Calculate cost of goods sold for 2024, 2025, and 2026. 2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for each of the three years. 3. Determine the effects of LIFO liquidation on cost of goods sold and net income for 2024, 2025, and 2026. Cansela's effective income tax rate is 25%. Complete this question by entering your answers in the tabs…
The Reuschel Company began 2021 with inventory of 10,000 units at a cost of $7 per unit. During 2021, 50,000 units were purchased for $8.50 each. Sales for the year totaled 54,000 units leaving 6,000 units on hand at the end of 2021. Reuschel uses a periodic inventory system and the LIFO inventory cost method.Required:1. Calculate cost of goods sold for 2021.2. From a financial reporting perspective, what problem is created by the use of LIFO in this situation? Describethe disclosure required to report the effects of this problem.
Hazelton Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2024 with $85,000 in inventory of its only product. The beginning inventory consisted of the following layers: 5,300 units at $6 per unit $ 31,800 7,600 units at $7 per unit 53,200 Total $ 85,000 During 2024, 7,300 units were purchased at $8 per unit and during 2025, 9,600 units were purchased at $9 per unit. Sales, in units, were 9,600 and 17,200 during 2024 and 2025, respectively. Required: Calculate cost of goods sold for 2024 and 2025. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for 2024 and 2025.