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 balance sheet and it is valued by FIFO LIFO and weighted average method.
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 goods sold using FIFO for comparison purposes. LIFO inventory LIFO cost of goods sold PIPO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) Current liabilities Year 2 $ 160 740 240 660 220 300 200 Year 1 $ 110 680 110 645 180 100 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers.arrow_forwarda) Calculate Saddlery Company’s cost of goods sold, gross margin, and ending inventory using weighted-average. (Round calculations for cost per unit to 2 decimal places, e.g. 10.52 and final answers to 0 decimal places, e.g. 61,052.) b) Calculate Saddlery Company’s cost of goods sold, gross margin, and ending inventory using FIFO. c)Calculate gross margin for both ? solve accurately with all working and steps with explanation , computation , formula answer in text show computation for numbers thanksarrow_forward
- Cruz 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 1 Year 2 $ 160 LIFO inventory LIFO Cost of goods sold FIFO inventory FIFO COst of goods sold Current assets (using LIFO) Current assets (using FIFO) $ 110 740 680 240 110 660 645 220 180 300 180 Current liabilities 200 170 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. IDenominator Numerator Ratio Current ratio 1.2 to 1 220.0 Inventory turnover $ 740.0 0 Days' sales in inventory 160.0 0 (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Numerator Denominator Ratio Current ratio $ 300.0 0 Inventory turnover 660.0 $ 0 Days' sales in inventory 240.0 $ 0arrow_forwardCruz Company uses LIFO for Inventory costing and reports the TOllowing thancial data. It also recomputed Inventory and cost of goods sold using FIFO for comparison purposes. Year 2 Year 1 LIFO inventory $ 170 $ 120 LIFO cost of goods sold FIFO inventory FIFO cost of goods sold Current assets (using LIFO) Current assets (using FIFO) 750 690 240 145 705 690 230 200 300 225 Current liabilities 180 160 1. Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using (a) LIFO numbers and (b) FIFO numbers. (a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO numbers. es Numerator Denominator Ratio Current ratio Inventory turnover Days' sales in inventory (b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO numbers. Numerator Denominator Ratio Current ratio Inventory turnover Days' sales in inventory < Prev 1 of 1 Nextarrow_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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