Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 7, Problem 7MC
Questions M7-6 and M7-7 are based on the following data: City Stationers Inc. had 200 calculators on hand on January 1, 2019, costing $18 each. Purchases and sales of calculators during the month of January were as follows:
City uses a periodic inventory system. According to a physical count, 150 calculators were on hand at January 31, 2019.
M7-6 The cost of the inventory on January 31, 2019, under the FIFO method is:
- a. $400
- b. $2,700
- c. $3,100
- d. $3,200
M7-7 The cost of the inventory on January 31, 2019, under the LIFO method is:
- a. $400
- b. $2,700
- c. $3,100
- d. $3,200
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Windsor Furniture Sales uses the periodic inventory system. On April 30, 2021, the company's year end, a physical count was taken of
the inventory on hand in both the warehouse and the retail store area for the purpose of determining cost of goods sold and ending
inventory value. The preliminary inventory list prepared by the warehouse manager shows a total inventory on hand of $760,000. The
following are items that the warehouse manager noted ona separate sheet. None of these items are currently part of the final
inventory listing because the manager was not sure how they should be treated for inventory purposes.
On April 30, Windsor shipped an order to a customer, FOB shipping point. The cost of the goods shipped is $9,870. Freight,
which is to be paid by the appropriate party, will cost $595.
1.
On April 30, a customer visited Windsor's shop and selected a desk that she wanted to purchase and paid for it in full. The
sales price of the desk was $5,700, and the cost was $4,400. The…
Take me to the text Suppose that on November 20, 2021, both Company A and Company B sold inventory with a cost of $38,800. The updated balance of inventory as at November 1 for both companies was $104, 700. Company A uses the perpetual
inventory system. Company B uses the periodic inventory system and performs an inventory count at the end of each month. What is the value of inventory as at November 20 for each company? Do not enter dollar signs or commas in the input boxes.
Company Inventory System Value of Inventory on November 20 A Perpetual SAnswer B Periodic $Answer
Take me to the text Suppose that on June 20, 2021, both Company A and Company B sold inventory with a cost of $32,600. The updated balance of inventory as at June 1 for both companies was $110,600. Company A uses the perpetual inventory system. Company B uses the periodic inventory system and performs an inventory count at the end of each month. What is the value of inventory as at June 20 for each company?
Do not enter dollar signs or commas in the input boxes.
Company Inventory System Value of Inventory on June 20 $ 65000 A B Check Perpetual Periodic $40900 I
Chapter 7 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 7 - Distinguish among the types of inventory accounts...Ch. 7 - Prob. 2GICh. 7 - Describe the flow of costs for o merchandising...Ch. 7 - Describe the relationship between cost of goods...Ch. 7 - Prob. 5GICh. 7 - Does the use of a perpetual system eliminate the...Ch. 7 - What is the general rule used to determine if a...Ch. 7 - For goods in transit at the end of a period,...Ch. 7 - Prob. 9GICh. 7 - Prob. 10GI
Ch. 7 - Prob. 11GICh. 7 - Consider each of the following independent...Ch. 7 - Prob. 13GICh. 7 - Prob. 14GICh. 7 - Prob. 15GICh. 7 - Prob. 16GICh. 7 - Prob. 17GICh. 7 - Prob. 18GICh. 7 - Prob. 19GICh. 7 - Prob. 20GICh. 7 - Discuss the LIFO and FIFO cost flow assumptions...Ch. 7 - Prob. 22GICh. 7 - Prob. 23GICh. 7 - List the acceptable cost flow assumptions under...Ch. 7 - Prob. 25GICh. 7 - Explain the dollar-value LIFO method of inventory...Ch. 7 - Describe the double-extension and link-chain...Ch. 7 - Prob. 28GICh. 7 - Prob. 29GICh. 7 - What is the impact of LIFO inventory liquidation...Ch. 7 - Goods on consignment should be included in the...Ch. 7 - The following items were included in Venicio...Ch. 7 - During 2019, R Corp., a manufacturer of chocolate...Ch. 7 - Dixon Menswear Shop purchased shirts from Colt...Ch. 7 - The moving average inventory cost flow assumption...Ch. 7 - The cost of the inventory on January 31, 2019,...Ch. 7 - Questions M7-6 and M7-7 are based on the following...Ch. 7 - Assuming no beginning inventory, what can be said...Ch. 7 - On December 31, 2018, Kern Company adopted the...Ch. 7 - When the double-extension approach to the...Ch. 7 - On December 31, Pitts Manufacturing Company...Ch. 7 - On January 1, Pope Enterprises inventory was...Ch. 7 - Reid Company uses the periodic inventory system....Ch. 7 - Billings Company uses a periodic inventory system....Ch. 7 - Dani Corporation signed a binding commitment on...Ch. 7 - Stevens Company uses a perpetual inventory system....Ch. 7 - RE7-6 Stevens Company uses a perpetual inventory...Ch. 7 - Johnson Company uses a perpetual inventory system....Ch. 7 - RE7-8 Johnson Company uses a perpetual inventory...Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - On January 1 of Year 1, Dorso Company adopted the...Ch. 7 - An evaluation of Bryces Bookstores inventory was...Ch. 7 - Inventory Accounts for a Manufacturing Company...Ch. 7 - Prob. 2ECh. 7 - Perpetual versus Periodic Inventory Systems Graham...Ch. 7 - Determining Net Purchases The following amounts...Ch. 7 - Perpetual versus Periodic Inventory Systems...Ch. 7 - Goods in Transit Gravais Company made two...Ch. 7 - Items Included in Inventory The following are...Ch. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Discounts Nelson Company bought inventory for...Ch. 7 - Alternative Inventory Methods Nevens Company uses...Ch. 7 - Alternative Inventory Methods Park Companys...Ch. 7 - Alternative Inventory Methods Frate Company was...Ch. 7 - LIFO, Perpetual and Periodic Riedel Companys...Ch. 7 - Habicht Company was formed in 2018 to produce a...Ch. 7 - Dollar-Value LIFO A company adopted the LIFO...Ch. 7 - On January 1, 2018, Sato Company adopted the...Ch. 7 - Dollar-Value LIFO Beistock Company manufactures...Ch. 7 - Acute Company manufactures a single product. On...Ch. 7 - Inventory Pools Stone Shoe Company adopted...Ch. 7 - Grimstad Company uses FIFO for internal reporting...Ch. 7 - LIFO and Interim Financial Reports Assume prices...Ch. 7 - Applying the Cost of Goods Sold Model The...Ch. 7 - Items to Be Included in Inventory As the auditor...Ch. 7 - Valuation of Inventory The inventory on hand at...Ch. 7 - Prob. 4PCh. 7 - Cost of Goods Sold As an accountant for Lee...Ch. 7 - Alternative Inventory Methods Garrett Company has...Ch. 7 - Totman Company has the following transactions...Ch. 7 - Comprehensive The following information for 2019...Ch. 7 - LIFO Liquidation Profit Hammond Company adopted...Ch. 7 - LIFO and Inventory Pools On January 1, 2016,...Ch. 7 - Olson Company adopted the dollar-value LIFO method...Ch. 7 - Dollar-Value LIFO Kwestel Company adopted the...Ch. 7 - Webster Company adopted do liar-value LIFO on...Ch. 7 - Dollar-Value LIFOComprehensive Kelly Company...Ch. 7 - On January 1, 2019, Lucas Distributors Inc....Ch. 7 - Inventory Valuation You are engaged in an audit of...Ch. 7 - Allen Company is a wholesale distributor of...Ch. 7 - FIFO and LIFO A company may compute inventory...Ch. 7 - Prob. 2CCh. 7 - In January, Broome Inc. requested and secured...Ch. 7 - Prob. 4CCh. 7 - Prob. 5CCh. 7 - Interpretation of GAAP and Ethical Issues Robin...Ch. 7 - Selection of an Inventory Method and Ethical...Ch. 7 - Analyzing Starbuckss Inventory Disclosures Obtain...Ch. 7 - Fenimore Manufacturing Company uses the average...
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.Similar questions
- The moving average inventory cost flow assumption is applicable to which of the following inventory systems? Questions M7-6 and M7-7 are based on the following data: City Stationers Inc. had 200 calculators on hand on January 1, 2019, costing 18 each. Purchases and sales of calculators during the month of January were as follows: City uses a periodic inventory system. According to a physical count, 150 calculators were on hand at January 31, 2019.arrow_forwardThe moving average inventory cost flow assumption is applicable to which of the following inventory systems?arrow_forwardCrosby Company owns a chain of hardware stores throughout the state. The company uses a periodic inventory system and the retail Inventory method to estimate ending inventory and cost of goods sold. The following data are available for the three months ending March 31, 2021: Beginning inventory. Net purchases Net markups Net markdowns Net sales Beginning inventory Net purchases Net markups Required: Complete the table below to estimate the LIFO cost of ending inventory and cost of goods sold for the three months ending March 31, 2021, using the information provided. Assume stable retail prices during the period (Round ratio calculation to 2 decimal places (i.e.. 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign.) Cost $180,000 630,000 Net markdowns Goods available for sale (excluding beg. inventory) Goods available for sale (including beg inventory) Cost-to-retail percentage (beginning) Cost-to-retail percentage (current) sales Estimated ending…arrow_forward
- Crosby Company owns a chain of hardware stores throughout the state. The company uses a periodic inventory system and the retsil inventory method to estimate ending inventory and cost of goods sold. The following dats are available for the three months ending March 31, 2021: Cost Retail Beginning inventory Net purchases Net narkups Net narkdowns Net sales $310, e00 $381, 000 750, 000 986, e00 21,000 7,e0e 946, B00 Required: Complete the table below to estimate the LIFO cost of ending inventory and cost of goods sold for the three months ending March 31, 2021, using the information provided. Assume stable retsil prices during the period. (Round ratio calculation to 2 declmal places (1.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign.) Cost-to-Retall Cost Retall Ratio Beginning inventory 310,000 S 381,000 Net purchases Net markups Net markdowns Goods available far sale (excluding beg. inventory) Goods available for sale (including beg. inventory)…arrow_forwardMuscat Company uses the periodic inventory system to account for inventories. Information related to Muscat Company's inventory for the month of January 2020 is given as follows: Units Per unit price Total Balance, 1/1/20 200 OMR 5.00 Purchase, 1/15/2020 100 5.30 Purchase, 1/28/2020 100 5.50 The physical inventory count on January 31 shows 120 units are on hand. Using the FIFO method, what is the cost of goods sold? Select one: O a. OMR 600 O b. OMR 520 O c. None of the answers are correct O d. OMR 1,424 O e. OMR 656arrow_forwardCrosby Company owns a chain of hardware stores throughout the state. The company uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the three months ending March 31, 2021: Cost Retail Beginning inventory Net purchases Net markups Net markdowns $320,000 $382,000 707,000 995,000 23,000 8,000 961,000 Net sales Required: Complete the table below to estimate the LIFO cost of ending inventory and cost of goods sold for the three months ending March 31, 2021, using the information provided. Assume stable retail prices during the period. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign.) Cost-to-Retail Cost Retail Ratio Beginning inventory $ 320,000 $ 382,000 Net purchases 707,000 995,000 Net markups 23,000 Net markdowns (8,000) Goods available for sale (excluding beg. inventory) 707,000 1,010,000 Goods…arrow_forward
- On January 1, 2019, the general ledger of Global Corporation included supplies of $1,600. During 2019, supplies purchased amounted to $6,200. A physical count of inventory on hand at December 31, 2019 determined that the amount of supplies on hand was $1,800. How much is the supplies expense for year 2019? Multiple Choice $6,400. O $6,000. $7,800. O $1,600.arrow_forward[The following information applies to the questions displayed below.] Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug.1 Inventory on hand—3,900 units; cost $7.20 each. 8 Purchased 19,500 units for $7.40 each. 14 Sold 15,600 units for $13.90 each. 18 Purchased 11,700 units for $7.50 each. 25 Sold 14,600 units for $12.90 each. 28 Purchased 5,900 units for $5.80 each. 31 Inventory on hand—10,800 units. Required:Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using each of the following cost flow methods. Complete this question by entering your answers in the tabs below. Tab: Average Cost Cost of Goods…arrow_forwardThe trial balance of Pina Colada Corp. at the end of its fiscal year, August 31, 2022, includes these accounts: Inventory $19,900, Purchases $157,000, Sales Revenue $187,000, Freight-In $7,300, Sales Returns and Allowances $2,900, Freight-Out $1,100, and Purchase Returns and Allowances $5,400. The ending inventory is $22,000. Prepare a cost of goods sold section for the year ending August 31, 2022 (periodic inventory).arrow_forward
- The trial balance of Ivanhoe Company at the end of its fiscal year, August 31, 2025, includes these accounts: Beginning Inventory $24,450, Purchases $194,940, Sales Revenue $195,900, Freight-In $9,740, Sales Returns and Allowances $4,620, Freight-Out $1,690, and Purchase Returns and Allowances $5,810. The ending inventory is $20,500. Prepare a cost of goods sold section (periodic system) for the year ending August 31, 2025. * : : + ◆ + IVANHOE COMPANY Cost of Goods Sold $ + $ SUPPORTarrow_forward[The following information applies to the questions displayed below.] A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 300 units. Ending inventory at January 31 totals 130 units. Beginning inventory on January 1 Purchase on January 9 Purchase on January 25 Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the LIFO method. Date Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the LIFO method. January 1 January 9 Total January 9 January 25 Total January 25 January 26 Total January 26 Goods purchased Units 270 60 100 # of units Unit Cost $ 2.50 2.70 2.84 Cost per # of units unit sold Perpetual LIFO: Cost of Goods Sold Cost per unit Cost of Goods Sold # of units Inventory Balance Cost per unit Inventory Balancearrow_forwardThe Reuschel Company began 2021 with inventory of 10,000 units at a cost of $7 per unit. During 2021, 50,000 units were purchased for $8.50 each. Sales for the year totaled 54,000 units leaving 6,000 units on hand at the end of 2021. Reuschel uses a periodic inventory system and the LIFO inventory cost method.Required:1. Calculate cost of goods sold for 2021.2. From a financial reporting perspective, what problem is created by the use of LIFO in this situation? Describethe disclosure required to report the effects of this problem.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
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