Financial Accounting, Student Value Edition (5th Edition)

5th Edition

ISBN: 9780134728520

Author: Robert Kemp, Jeffrey Waybright

Publisher: PEARSON

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

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Textbook Question

Chapter 5, Problem 50BP

FIFO, LIFO, and average cost (Learning Objectives 2 & 3) 15-20 min.

Monitor Industries, Inc., completed the following inventory transactions during the month of March:

Date	Item	Quantity	Unit Cost
Mar 1	Balance	25	$85
4	Purchase	60	$88
12	Sale	75
22	Purchase	28	$90
31	Sale	20

Requirements

1. Without resorting to calculations, determine which inventory method will result in Monitor Industries, Inc., paying the lowest income taxes.
2. Prepare a perpetual inventory record using FIFO.
3. Prepare a perpetual inventory record using LIFO.
4. Prepare a perpetual inventory record using average cost. Round the average cost per unit to the nearest cent and all other amounts to the nearest dollar.

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Chapter 5, Problem 49BP

Chapter 5, Problem 51BP

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Accounting Cycle Review 15 a-e Carla Vista Corporation's trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below. Debit Credit Cash Accounts Receivable Inventory $27,400 59,000 22,600 Land 62,900 Buildings 96,900 Equipment 42,000 Allowance for Doubtful Accounts $430 Accumulated Depreciation-Buildings 30,500 Accumulated Depreciation-Equipment 15,000 Accounts Payable 19,300 Interest Payable -0- Dividends Payable Unearned Rent Revenue -0- 8,800 Bonds Payable (10%) 54,000 Common Stock ($10 par) 34,000 Paid-in Capital in Excess of Par-Common Stock 6,800 Preferred Stock ($20 par) -0- Paid-in Capital in Excess of Par-Preferred -0- Stock Retained Earnings 72,970 Treasury Stock -0- Cash Dividends Sales Revenue Rent Revenue Bad Debt Expense Interest Expense Cost of Goods Sold Depreciation Expense Other Operating Expenses Salaries and Wages Expense -0- 576,000 -0- -0- -0- 404,000 -0- 39,900 63,100 Total Unrecorded…

Chapter 5 Solutions

Financial Accounting, Student Value Edition (5th Edition)

Ch. 5 - Prob. 1DQ Ch. 5 - How are the financial statements of a manufacturer...Ch. 5 - What is a cost-flow assumption? Why is a cost-flow...Ch. 5 - If a company had two units that cost 1 each in its...Ch. 5 - Prob. 5DQ Ch. 5 - Prob. 6DQ Ch. 5 - Prob. 7DQ Ch. 5 - Prob. 8DQ Ch. 5 - Prob. 9DQ Ch. 5 - Prob. 10DQ

Ch. 5 - During April, Bargain Hardware made sales of...Ch. 5 - Prob. 2SC Ch. 5 - Prob. 3SC Ch. 5 - Prob. 4SC Ch. 5 - Prob. 5SC Ch. 5 - Prob. 6SC Ch. 5 - Prob. 7SC Ch. 5 - Prob. 8SC Ch. 5 - Prob. 9SC Ch. 5 - Prob. 10SC Ch. 5 - Prob. 11SC Ch. 5 - Prob. 12SC Ch. 5 - Prob. 1SE Ch. 5 - Prob. 2SE Ch. 5 - Prob. 3SE Ch. 5 - Prob. 4SE Ch. 5 - Prob. 5SE Ch. 5 - Prob. 6SE Ch. 5 - Prob. 7SE Ch. 5 - Prob. 8SE Ch. 5 - Lower-of-cost-or-market rule (Learning Objective...Ch. 5 - Prob. 10SE Ch. 5 - Inventory principles and terminology (Learning...Ch. 5 - Prob. 12SE Ch. 5 - Prob. 13SE Ch. 5 - Prob. 14SE Ch. 5 - Prob. 15SE Ch. 5 - Prob. 16AE Ch. 5 - Prob. 17AE Ch. 5 - Prob. 18AE Ch. 5 - Prob. 19AE Ch. 5 - Prob. 20AE Ch. 5 - Prob. 21AE Ch. 5 - Prob. 22AE Ch. 5 - Prob. 23AE Ch. 5 - Prob. 24AE Ch. 5 - Prob. 25AE Ch. 5 - Prob. 26AE Ch. 5 - Prob. 27AE Ch. 5 - FIFO (Learning Objective 2) 10-15 min. Tee Time,...Ch. 5 - LIFO (Learning Objective 2) 10-15 min. Refer to...Ch. 5 - Prob. 30BE Ch. 5 - Prob. 31BE Ch. 5 - Prob. 32BE Ch. 5 - Prob. 33BE Ch. 5 - Prob. 34BE Ch. 5 - Prob. 35BE Ch. 5 - Prob. 36BE Ch. 5 - Prob. 37BE Ch. 5 - Prob. 38BE Ch. 5 - Prob. 39BE Ch. 5 - Computing LIFO and journalizing inventory...Ch. 5 - Prob. 41AP Ch. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 43AP Ch. 5 - Prob. 44AP Ch. 5 - Prob. 45AP Ch. 5 - Estimating ending inventory (Learning Objective 7)...Ch. 5 - Prob. 47AP Ch. 5 - Prob. 48BP Ch. 5 - Prob. 49BP Ch. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 51BP Ch. 5 - Prob. 52BP Ch. 5 - Prob. 53BP Ch. 5 - Prob. 54BP Ch. 5 - Prob. 55BP Ch. 5 - Continuing Exercise This exercise continues the...Ch. 5 - Prob. 1CP Ch. 5 - Prob. 1CFSAP Ch. 5 - Prob. 1EIA Ch. 5 - Prob. 2EIA Ch. 5 - Prob. 1FA Ch. 5 - Prob. 1IA Ch. 5 - Prob. 1SBA Ch. 5 - Prob. 1WC Ch. 5 - Comprehensive Problem The Accounting Cycle for a...

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Solution Summary: The author explains how the LIFO inventory method in Incorporation M will result in paying the lowest income taxes, and how to prepare a perpetual inventory record using FIFO.

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