s Required Information[The following information applies to the questions displayed below.]Laker Company reported the following January purchases and sales data for its only product. For specific identification,ending Inventory consists of 280 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 unitsfrom beginning Inventory.DateJanuary 1January 10January 20January 25January 30ssume the periodic Inventory system is used.equired:ActivitiesBeginning inventorySalesPurchaseSalesPurchaseTotalsUnits Acquired at Cost190 units @ $ 7.00 =Req 1110 unitsSalesCost of goods soldGross profit280 units @580 units$6.00 =Complete this question by entering your answers in the tabs below.< Req 1$5.50 =3. Does gross profit using weighted average fall between that using FIFO and LIFO?4. If costs were rising Instead of falling, which method would yield the highest gross profit?LAKER COMPANYFor Month Ended January 31Specific Identification Weighted Average$ 1,330660FIFO1,540$ 3,530Req 2 to 4 >1. Compute gross profit for the month of January for Laker Company for the four Inventory methods using the periodic Inventorysystem.2. Which method yields the highest gross profit?Units sold at Retail150 unitsLIFO130 unitsReq 2 to 4JhmCompute gross proffor the month of January for Laker Company for the four inventory methods using the periodic inventorysystem.Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.280 units@@$16.00$ 16.00

Inventory can be valued using various methods:First-in First-Out Method - Under the First-in…

Laker Company reported the following January purchases and sales data for Its only product. For specific identification, ending Inventory consists of 280 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning Inventory. Date January 1 January 10 January 20 January 25 January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals sume the periodic Inventory system is used. quired: Units Acquired at Cost $7.00 = 190 units @ 110 units. @ 280 units @ 580 units $6.00 = $5.50 = $ 1,330 660 1,540 $3,530 Units sold at Retail 150 units 130 units 280 units @ @ $16.00 $ 16.00 1. Compute gross profit for the month of January for Laker Company for the four Inventory methods using the periodic Inventor system. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO?

Laker Company reported the following January purchases and sales data for Its only product. For specific identification, ending Inventory consists of 280 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning Inventory. Date January 1 January 10 January 20 January 25 January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals sume the periodic Inventory system is used. quired: Units Acquired at Cost $7.00 = 190 units @ 110 units. @ 280 units @ 580 units $6.00 = $5.50 = $ 1,330 660 1,540 $3,530 Units sold at Retail 150 units 130 units 280 units @ @ $16.00 $ 16.00 1. Compute gross profit for the month of January for Laker Company for the four Inventory methods using the periodic Inventor system. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO?

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 4PB: The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are...

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Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2, were as follows: There are 1,200 units of inventory on hand on December 31, 20-2. REQUIRED 1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: (a) FIFO (b) LIFO (c) Weighted-average (round calculations to two decimal places) 2. Assume that the market price per unit (cost to replace) of Hursts inventory on December 31 was 18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods: (a) FIFO lower-of-cost-or-market (b) Weighted-average lower-of-cost-or-market 3. In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of 100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.
Lower-of-cost-or market inventory Data on the physical inventory of Moyer Company as of December 31, 20Y9, are presented below. 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 and at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on an 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 LCM column. The first item on the inventory sheet has been completed below as an example.
Data 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.
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.
Beginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of the merchandise sold on October 29, and (c) the inventory on October 31.
Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows: Instructions 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. Present data in columnar form, using the following headings: If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. 2. Determine the cost of the inventory on December 31 by the last-in, first-out method, following the procedures indicated in (1). 3. Determine the cost of the inventory on December 31 by the weighted average cost method, using the columnar headings indicated in (1). 4. Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of (a) rising prices and (b) declining prices.
Beginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of goods sold on October 29, and (c) the inventory on October 31.
The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 7-1B. Instructions 1. Determine the inventory on June 30 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system. 2. Determine the inventory on June 30 and the cost of merchandise sold for the three-month period, using the last-in, first-out method and the periodic inventory system. 3. Determine the inventory on June 30 and the cost of merchandise sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the dollar. 4. Compare the gross profit and June 30 inventories using the following column headings:
Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of December 31 follows: 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 and also at the lower of cost or market applied on an item-by-item basis, 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 LCM column. The first item on the inventory sheet has been completed as an example.
Lower-of-cost-or-market inventory 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 and also at the lower of cost or market applied on an item-by-item basis, 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 LCM column. The first item on the inventory sheet has been completed as an example.
Beginning inventory, purchases, and sales for Item ProX2 are as follows: Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on January 25 and (b) the inventory on January 31.
Alternative Inventory Methods Nevens Company uses a periodic inventory system. During November, the following transactions occurred: Required: 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?