Concept explainers
1.
Introduction:
Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the
To calculate: Current assets, inventory turnover and day’s sales in inventory using LIFO and FIFO.
2.
Introduction:
Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO and weighted average method.
To determine:
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Loose Leaf for Financial Accounting: Information for Decisions
- Use the weighted-average (AVG) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forwardBased on the data in Exercise 7-15 and assuming that cost was determined by the FIFO method, show how the merchandise inventory would appear on the balance sheet.arrow_forwardCalculate a) cost of goods sold, b) ending inventory, and c) gross margin for A76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for weighted average (AVG).arrow_forward
- Based on the data in Exercise 6-15 part (a) and assuming that cost was determined by the FIFO method, show how the inventory would appear on the balance sheet.arrow_forwardInventory Costing: Average Cost Refer to the information for Filimonov Inc. and assume that the company uses a perpetual inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.)arrow_forwardCompare the calculations for gross margin for A76 Company, based on the results of the perpetual inventory calculations using FIFO, LIFO, and AVG.arrow_forward
- Compute Westtown Companys (A) inventory turnover ratio and (B) number of days sales in inventory ratio, using the following information.arrow_forwardCruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of sold using FIFO for comparison purposes. LIFO inventory LIFO cost of goods sold FIFO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO number Current ratio Inventory turnover Days' sales in inventory Answer is not complete. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. Current ratio Inventory turnover Days' sales in inventory Current ratio Inventory turnover Days' sales in inventory $ $ $ $ Year 2 $ 290 870 360 825 350 420 170 Numerator 1 Denominator 350.0 / $ $ 870.0 111.0 X $ $ $ Numerator 1 350.0 / (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers.…arrow_forwardCruz Company uses LIFO for inventory costing and reports the following financial data. It also recomputed inventory and cost of goods sold using FIFO for comparison purposes. Year 2 $ 320 900 390 855 LIFO inventory LIFO cost of goods sold FIFO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. Current ratio Inventory turnover Days' sales in inventory Year 1 $ 270 840 380 450 180 Current ratio Inventory turnover Days' sales in inventory (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. Numerator / Denominator 295 840 350 375 160 Numerator / Denominator (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Ratio 0 0 0 Ratio 0 0 0arrow_forward
- Rockingham Communications reported the following figures in its annual financial statements: n to view the figures.) Question Viewer Compute the rate of inventory turnover and days' sales in inventory for Rockingham Communications. (Round to two decimal places.) Select the labels and enter the amounts to compute the inventory turnover. (Enter the amount for average inventory to one decimal place, X.X. Round your answer to two decimal places, X.XX.) Data table + Print ÷ Cost of Goods Sold Beginning Merchandise Inventory Ending Merchandise Inventory Done C…... $ 18,200 560 420 X = = Inventory turnover timesarrow_forward(A) Using the FIFO assumption, calculate the amount charged to cost of goods sold, the value of the ending inventory and the gross profit for May. Show all computations. (B) Using the weighted-average method, calculate the amount assigned to the inventory on hand on May 31, and the gross profit for May. Show all computations.arrow_forwardRefer to the information in Exercise 6-7 and assume the periodic inventory system is used. Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Then (c) compute the gross margin for each methodarrow_forward
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