1. Explanation Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. First-in-First-Out: In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items. Ending Inventory: It represents the quantity and price of the goods unsold and laying at the store at the end of a particular period. Calculate the cost of ending inventory: Calculation of Cost of Ending Inventory Details Number of Units Rate per Unit ($) Total Cost ($) October 4 9 550 4,950 Ending Inventory (1) 9 4,950 Table (1) Notes: The ending inventory is 9 units. FIFO method, the cost of first acquired items is assigned to sales first. Therefore, the ending inventory of 9 units from October 4th purchases. Working notes: Calculate the units of ending inventory: Ending inventory units = Total goods available for sale – sales = 61 Units – 52Units = 9 Units (1) Therefore, the cost of Ending Inventory in the FIFO is $4,950 2. To determine Calculate the ending inventory and the cost of goods sold using LIFO. 3. To determine Ascertain the amount of ending inventory to report using lower of cost and net realizable value under FIFO, and also record the adjusting entry.

5th Edition

ISBN: 9781266704444

Author: SPICELAND

Publisher: MCG

See similar textbooks

Concept explainers

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…

Videos

Question

Chapter 6, Problem 5PB

To determine

Calculate the ending inventory and the cost of goods sold using FIFO.

To determine

Calculate the ending inventory and the cost of goods sold using LIFO.

To determine

Ascertain the amount of ending inventory to report using lower of cost and net realizable value under FIFO, and also record the adjusting entry.

Expert Solution & Answer

Chapter 6 Solutions

FIANACIAL ACCOUNTING

Ch. 6 - Prob. 1SSQ Ch. 6 - Prob. 2SSQ Ch. 6 - Prob. 3SSQ Ch. 6 - Prob. 4SSQ Ch. 6 - Prob. 5SSQ Ch. 6 - 6. Using the information in #4, what amount would...Ch. 6 - Prob. 7SSQ Ch. 6 - Prob. 8SSQ Ch. 6 - Prob. 9SSQ Ch. 6 - Prob. 10SSQ

Ch. 6 - 11. Maxwell Corporation has the following...Ch. 6 - Prob. 12SSQ Ch. 6 - Prob. 13SSQ Ch. 6 - Prob. 14SSQ Ch. 6 - Prob. 15SSQ Ch. 6 - Prob. 1AE Ch. 6 - Prob. 2AE Ch. 6 - Prob. 1RQ Ch. 6 - Prob. 2RQ Ch. 6 - Prob. 3RQ Ch. 6 - Prob. 4RQ Ch. 6 - Prob. 5RQ Ch. 6 - 6. What is a multiple-step income statement? What...Ch. 6 - Prob. 7RQ Ch. 6 - Prob. 8RQ Ch. 6 - Prob. 9RQ Ch. 6 - Prob. 10RQ Ch. 6 - Prob. 11RQ Ch. 6 - 12. Explain how LIFO generally results in lower...Ch. 6 - Prob. 13RQ Ch. 6 - Prob. 14RQ Ch. 6 - Prob. 15RQ Ch. 6 - Prob. 16RQ Ch. 6 - Prob. 17RQ Ch. 6 - Prob. 18RQ Ch. 6 - Prob. 19RQ Ch. 6 - Prob. 20RQ Ch. 6 - Prob. 21RQ Ch. 6 - Prob. 22RQ Ch. 6 - Prob. 23RQ Ch. 6 - Prob. 24RQ Ch. 6 - Prob. 1BE Ch. 6 - Prob. 2BE Ch. 6 - Prob. 3BE Ch. 6 - Prob. 4BE Ch. 6 - Prob. 5BE Ch. 6 - Prob. 6BE Ch. 6 - Prob. 7BE Ch. 6 - Prob. 8BE Ch. 6 - Prob. 9BE Ch. 6 - Prob. 10BE Ch. 6 - Prob. 11BE Ch. 6 - Prob. 12BE Ch. 6 - Prob. 13BE Ch. 6 - Prob. 14BE Ch. 6 - Prob. 15BE Ch. 6 - Prob. 16BE Ch. 6 - BE6-17 Refer to the information in BE6-10, but now...Ch. 6 - Prob. 18BE Ch. 6 - Prob. 19BE Ch. 6 - BE6–20 Refer to the information in BE6–13, but now...Ch. 6 - Prob. 21BE Ch. 6 - Prob. 22BE Ch. 6 - Prob. 1E Ch. 6 - Prob. 2E Ch. 6 - Prepare a multiple-step income statement and...Ch. 6 - Prob. 4E Ch. 6 - Prob. 5E Ch. 6 - E6-6 Bingerton Industries began the year with...Ch. 6 - Prob. 7E Ch. 6 - Prob. 8E Ch. 6 - Prob. 9E Ch. 6 - Prob. 10E Ch. 6 - Prob. 11E Ch. 6 - Prob. 12E Ch. 6 - Calculate inventory using lower of cost and net...Ch. 6 - Calculate inventory using lower of cost and net...Ch. 6 - Prob. 15E Ch. 6 - Prob. 16E Ch. 6 - Prob. 17E Ch. 6 - Prob. 18E Ch. 6 - Prob. 19E Ch. 6 - Prob. 20E Ch. 6 - Prob. 21E Ch. 6 - Prob. 1PA Ch. 6 - Prob. 2PA Ch. 6 - Prob. 3PA Ch. 6 - Prob. 4PA Ch. 6 - Prob. 5PA Ch. 6 - Prob. 6PA Ch. 6 - Prepare a multiple-step Income statement and...Ch. 6 - P6-8A Wawa Food Markets is a convenience store...Ch. 6 - Prob. 9PA Ch. 6 - Correct inventory Understatement and calculate...Ch. 6 - Prob. 1PB Ch. 6 - Prob. 2PB Ch. 6 - Prob. 3PB Ch. 6 - Prob. 4PB Ch. 6 - Prob. 5PB Ch. 6 - Prob. 6PB Ch. 6 - Prob. 7PB Ch. 6 - Prob. 8PB Ch. 6 - Prob. 9PB Ch. 6 - Prob. 10PB Ch. 6 - Prob. 1AP Ch. 6 - American Eagle Outfitters, Inc. AP6-2 Financial...Ch. 6 - Prob. 3AP Ch. 6 - Prob. 4AP Ch. 6 - Ethics AP6-5 Horizon Corporation manufactures...Ch. 6 - Prob. 6AP Ch. 6 - Prob. 7AP Ch. 6 - Prob. 8AP

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Recommended textbooks for you

FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education

FINANCIAL ACCOUNTING

Accounting

ISBN:9781259964947

Author:Libby

Publisher:MCG

Accounting

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:Cengage Learning,

Accounting Information Systems

Accounting

ISBN:9781337619202

Author:Hall, James A.

Publisher:Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis...

Accounting

ISBN:9780134475585

Author:Srikant M. Datar, Madhav V. Rajan

Publisher:PEARSON

Intermediate Accounting

Accounting

ISBN:9781259722660

Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:9781259726705

Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:McGraw-Hill Education

SEE MORE TEXTBOOKS

Chapter 6 Merchandise Inventory; Author: Vicki Stewart;https://www.youtube.com/watch?v=DnrcQLD2yKU;License: Standard YouTube License, CC-BY

Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License