Hammond Company adopted LIFO when it was formed on January 1, 2017. Since then, the company has had the following purchases and sales of its single inventory item:   Year Units Purchased Cost per Unit Units Sold Price per Unit   2017 10,000 $5 8,000      $12 2018 12,000   6 9,000        13 2019 15,000   8 14,000        16   In December 2020, the controller realized that because of an unexpected increase in demand, the company had sold 22,000 units but had purchased only 19,000 units during the year. In 2020, each unit had been sold for $19, and each unit purchased had cost $10. The income tax rate is 21%. Required: 1. If Hammond makes no additional purchases in 2020, how much LIFO liquidation profit will it report? $fill in the blank 7a6026fb6f8f01d_1   2. Prepare the appropriate annual report disclosures for 2020.       2020 2019 Inventory at FIFO $fill in the blank b2a8b8fedfc6fff_1 $fill in the blank b2a8b8fedfc6fff_2 Less: LIFO valuation allowance fill in the blank b2a8b8fedfc6fff_3 fill in the blank b2a8b8fedfc6fff_4 Inventory at LIFO $fill in the blank b2a8b8fedfc6fff_5 $fill in the blank b2a8b8fedfc6fff_6   3. If Hammond purchases an additional 7,000 units in December 2020, how much income tax will the company save? $fill in the blank 149705091f86ff4_1

Q: Sanborn Inc. is a new manufacturing company founded on February 2, 2012. The company had to choose…

A: FIFO: FIFO stands for First-In, First-Out.  In this method inventory purchased first will be sell…

Q: Taylor Corporation has used a periodic inventory system and the LIFO cost method since its inception…

A:

Q: Hubble Space Incorporated has the following data which includes inventory conversion period or ICP…

A: Inventory conversion period is the number of days required to convert raw materials into finished…

Q: On January 1, 2012, Jackson Enterprises opened its doors. Jackson uses the first-in, first-out…

A: Please find the answer to the above question below:

Q: Shirley, Inc. had the following information regarding 2016 inventories:     Units Price Amount…

A: Ending inventory with LIFO method is determined by the ending inventory units valued at the oldest…

Q: If this were done, by how much would inventories decrease? Ass

A: Information Provided: Inventory = 20,000 COGS = 85,000 ICP (current) = 85.88 Benchmark ICP = 38

Q: The management of Gresa Inc. is reevaluating the appropriateness of using its present inventory cost…

A: Calculation of COGS under FIFO method As per FIFO Method: Particulars Units Cost per unit Total…

Q: Suppose Holt Renfrew, the specialty retailer, had these records for ladies' evening gowns during…

A: Average method of inventory is one of method used to determine the inventory value under this method…

Q: he Dormer Company uses the gross profit

A: 1. Calculation of cost of goods sold Sales = Cost of goods sold + Mark up(%) Mark up (%) = 50% of…

Q: Alster Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2015.…

A: Solution : Computation of inventory at base year prices and change from prior year - Alster…

Q: Metro Computer Company had the following balances and transactions during 2014. Beginning inventory…

A: As per LIFO method, the ending inventory would consist of items from the first purchases as the…

Q: Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax…

A: 1. Prepare journal entry to record the change in value of inventory value.

Q: On January 4, 2015, the president of the company, Connie Kilmer, asked for your advice on costing…

A: (1) To calculate the cost of December 31, 2014 inventory under periodic system as shown below,

Q: Wildhorse Company was formed in 2016 and maintains its books and records on calendar-year basis. The…

A: Inventory refers to the goods held by the business either for selling or for further production so…

Q: Hubble Space Incorporated has the following data which includes inventory conversion period or ICP…

A: Inventory refers to the goods or items which are stored by the business either for selling or for…

Q: Muscat Company uses the periodic .24 inventory system to account for inventories. Information…

A: Total units available for sale = Beginning inventory + Purchase on 1/15/2020 + Purchase on 1/28/2020…

Q: During 2020, Fresh Express Company sold 2,400 units of its product on September 20 and 2,500 units…

A: Working Notes: Operating expenses = Number of units sold×Per unit=2,400+2,500×$15=$73,500

Q: Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2018…

A:

Q: Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO…

A: Businesses that employ the LIFO Inventory Costing Method sell their old inventory stock through the…

Q: Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since…

A: What is meant by Inventory? It is the stock that is left unsold at the end of the year. Inventory…

Q: In 2020, Frost Company, which began operations in 2018, decided to change from LIFO to FIFO because…

A: Under LIFO, the organization used to assume that the goods it is selling would be from the latest…

Q: Goddard Company has used the FIFO method of inventory valuation since it began operations in 2013.…

A: Method of Inventory: Inventory refers to the current assets that a company expects to sell during…

Q: Taylor Corporation has used a periodic inventory system and the LIFO cost method since its inception…

A: 1.

Q: Koopman Company began operations on January 1, 2015, and uses the FIFO inventory method for…

A: FIFO (First In First Out)method is an important accounting method.It states that assets purchased…

Q: Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for…

A: Inventory costing method:The costing method that is used to record the cost of goods sold, and…

Q: Mercury Company has only one inventory pool. On December 31, 2016, Mercury adopted the dollar-value…

A: Dollar-Value-LIFO: This method shows all the inventory figures at dollar price rather than units.…

Q: Carswell Electronics adopted the dollar-value LIFO method on January 1, 2016, when the inventory…

A: Dollar value LIFO method: In this method, the aggregate cost of inventory is compiled to layers for…

Q: Harlequin Co. has used the LIFO retail method since it began operations in early 2015 (its base…

A: Dollar value LIFO method is a process to calculate the cost of the inventory according to last in…

Q: On December 31, 2016, the inventory of Powhattan Company amounts to $800,000. During 2017, the…

A: Compute the inventory value at December 31, 2017, under the dollar-value LIFO method:

Q: On January 2020, Tony Corporation has the following inventory purchases: January 2 Bought 5,750…

A: Inventory costing methods are those methods which are used for valuation and costing of inventory.…

Q: Prepare a comparative income statement for the company, showing in adjacent columns the profits…

A: Under FIFO Method, units that came in first will be sold first and the inventory will be out of the…

Q: Sunland Company was formed in 2016 and maintains its books and records on calendar-year basis. The…

A: Schedule for computing ending inventory on Feb 28, 2017 is as under:

Q: The following is a record of Pervis Ellison Company's transactions for Boston Teapots for the month…

A: a. Assuming that perpetual inventories are not maintained and that a physical count at the end of…

Q: Carswell Electronics adopted the dollar-value LIFO method on January 1, 2018, when the inventory…

A: Given information is: Inventory value as on January 1, 2018 = $720,000 CPI as on January 1,2018 =…

Q: In 2016, the Barton and Barton Company changed its method of valuing inventory from the FIFO method…

A: Prepare journal entry

Q: The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost…

A: 1.

Q: Causwell Company began 2018 with 10,000 units of inventory on hand. The cost of each unit was $5.00.…

A: 1.

Q: The management of Swifty Inc. is reevaluating the appropriateness of using its present inventory…

A: Inventory Valuation Methods are methods of valuation of inventory. There are three methods of…

Q: Jelly Bros. Tools, Inc. had the following layers in its LIFO tablesaw inventory at january 1, 2018.…

A: Calculate the current operating margin.

Q: The Reuschel Company began 2016 with inventory of 10,000 units at a cost of $7 per unit. During…

A: 1.The cost of goods sold under LIFO.

Q: The management of Blue Spruce Corp. is reevaluating the appropriateness of using its present…

A: Working note: Computation of value of ending inventory under FIFO and LIFO method:

Q: Causwell Company began 2016 with 10,000 units of inventory on hand. The cost of each unit was $5.00.…

A: 1.

Q: Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2016…

A:

Q: Wildhorse Company was formed in 2016 and maintains its books and records on calendar-year basis. The…

A: Under FIFO method, goods purchased first should be sold first. Therefore, COGS under the FIFO method…

Q: Millington Materials is a leading supplier of building equipment, building products, materials, and…

A: Inventory (additional amount due to the new method: $14 million + 6 million) = $20 million Deferred…

Q: Brooke Company used a perpetual inventory system. At the end of 2012, the inventory account was…

A: Introduction: The total amount your organisation paid as a cost directly tied to the selling of…

Q: In 2020, Frost Company, which began operations in 2018, decided to change from LIFO to FIFO because…

A: Journal entry is a primary entry that records the financial transactions initially.

Q: Beat, Inc., expects to sell 60,000 athletic uniforms for $80 each in 2017. Direct materials costs…

A: Direct material cost is considered as the direct manufacturing cost which is incurred while…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.