Obj. 2, 3 The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31 are as SHOW ME HOW follows: PR 6-2A below EXCEL TEMPLATE Date Transaction Number Per Unit Total of Units Jan. 1 Inventory 7,500 $ 75.00 $ 562,500 10 Purchase 22,500 85.00 1,912,500 28 Sale 11,250 150.00 1,687,500 30 Sale 3,750 150.00 562,500 Feb. 5 Sale 1,500 150.00 225,000 10 Purchase 54,000 87.50 4,725,000 16 Sale 27,000 160.00 4,320,000 28 Sale 25,500 160.00 4,080,000 Mar. 5 Purchase 45,000 89.50 4,027,500 14 Sale 30,000 160.00 4,800,000 25 Purchase 7,500 90.00 675,000 30 Sale 26,250 160.00 4,200,000 Instructions Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the first-in, first-out method. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account. Determine the gross profit from sales for the period.

Q: How is Day Sales in Inventory calculated?

A: Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times…

Q: How do you enter an adjusting entry for Inventory?

A: Inventory adjustment Fluctuation in the inventory is a serious issue for a business entity. The…

Q: Define inventory.

A: Inventory: Inventory consist of total of three components: raw material, work-in-process and…

Q: FIFO or LIFO

A: Inventory is the current assets reported under the head current assets in the balance sheet of the…

Q: How do you measure gross margin return on inventory(GMROI)?

A: GMROI is a measure of inventory profitability where, it measures how much profit does the sales…

Q: How do you find the ending inventory?

A: Many companies earn revenue by selling inventory rather than a service. These companies are…

Q: What is an ABC analysis with regard to inventory?

A: ABC analysis: ABC analysis is an inventory classification technique used as a basic arrangement…

Q: Ending/Beginning Ending Inventory Finished Goods Formula How do you find the beginning and the…

A: Finished goods inventory: It refers to the products in a manufacture’s inventory that are final…

Q: What is inventory turnover ratio?

A: Inventory:   It can be described as a good or material that a company holds for the purpose of…

Q: Under what circumstances would the gross profit method of estimating inventory be used?

A: The gross profit method of estimating inventory is typically used in situations where a company…

Q: Should inventory be measured initially at its market value or at cost?

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic…

Q: Explain which physical units of goods should be included in inventory.

A: Inventory:   It refers to an accounting term used to describe the goods in various stages in the…

Q: What are the two main types of inventory and which is considered a physical count?

A: Inventory:   Inventory refers to the raw materials, work-in process, and the finished goods…

Q: Define beginning inventory and ending inventory

A: The beginning inventory and ending inventory are explained as below,   The Inventory can be defined…

Q: When computing ending inventory, what is the difference between a LIFO computation and a FIFO…

A: In a LIFO computation, the most recent inventory purchases are assumed to be sold first, and the…

Q: What is meant by the term gross margin? Describe costing inventory using first-in, first-out.…

A: What is meant by the term gross margin?

Q: Determine ending inventory using the dollar-value LIFO inventory method.

A: Dollar-value LIFO method: In this method, the valuation of inventory is calculated on the monetary…

Q: What is inventory conversion period?

A: Conversion period refers to the length of period at which one asset is converted into another form.…

Q: How is the desired closing inventory calculated

A: A production budget is a kind of budget that shows the total number of products that must be…

Q: HOW DO YOU GET THE REMAING TOTAL BALANCE OF INVENTORY COST?

A: The question deals with inventory valuation at LIFO method.  LIFO means Last in First out.  In this…

Q: How is inventory valuation made? Explain?

A: Stock or inventory are important yet inert resources lying with the organization at the end of an…

Q: What does the cost of merchandise inventory includes?

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: What are the four methods used to account for inventory?

A:

Q: What does the retail inventory estimates?

A: Retail inventory method:   The retail inventory method is used to calculate the value of ending…

Q: How about the cost of inventory held by the consignee

A: Cost of inventory includes purchase cost of inventory, it's conversation cost and any other expenses…

Q: What is the amount of Oriole company's inventory?

A: Valuation of Inventory: When a company is compiling its financial accounts, one of the accounting…

Q: Which are the three types of inventory cost reflected in the balance sheet?

A: Value of Inventory that shows under the asset side of the balance sheet comprises of several…

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.