Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 9, Problem 9.4DMP
1. a.
To determine
Dollar-Value-LIFO: This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.
Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.
To Explain: the advantages of using the dollar-value LIFO method as opposed to the traditional LIFO method.
1. b.
To determine
To Explain: the difference in the application of the dollar-value LIFO method and the application of the traditional LIFO method.
2.a.
To determine
To Explain: the treatment of the net mark ups and net markdowns in the calculation of the cost-to-retail percentage used to determine the estimated cost of its ending retail inventories.
2.b.
To determine
To explain: the reason for the retail inventory method of Company H approximates lower of average cost or market.
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Problem 10-34 Multiple choice (IAA)
2. Which is a characteristic of a perpetual inventory system?
d. Inventory does not affect net income
b. Inventory records are not kept for every item.
To determine cost of goods sold
Inventory purchases are debited to a purchases account.
To determine merchandise returns
d. Goods available for sale minus cost of goods sold
Why is inventory included in the computation of net income?
1.
а.
To determine sales revenue
b.
C.
Inventory purchases are debited to a purchases account.
a.
с.
Cost of goods sold is recorded with each sale.
: Cost, of goods sold is determined as the amount of
purchases less the change in inventory.
, Which is incorrect about the perpetual inventory method?
. Purchases are recorded as debit to the inventory account.
b. The entry to record a sale includes a debit to cost of
goods sold and a credit to inventory.
c. After a physical inventory count, inventory is credited
for any missing inventory.
d. Purchase returns are recorded by…
Problem 6-2AA (Static) Periodic: Alternative cost flows LO P3
[The following information applies to the questions displayed below.]
Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions
for March
Date
March 1
March S
March 9
March 18
March 25
March 29
Activities
Beginning inventory
Purchase
Sales
Purchase
Purchase
Sales
Totals
Sales
Less: Cost of goods sold
Gross profit
$
$
FIFO
For specific identification, units sold include 80 units from beginning inventory, 340 units from the March 5 purchase, 40
units from the March 18 purchase, and 120 units from the March 25 purchase.
50,900 $
Units Acquired at Cost
100 units@ $50 per unit
400 units @ $55 per unit
Problem 6-2AA (Static) Part 4
4. Compute gross profit earned by the company for each of the four costing methods.
Note: Round your average cost per unit to 2 decimal places and final answers to nearest whole dollar.
50,900 $
120 units@ $60 per unit
200 units@ $62 per unit…
Chapter 9 Solutions
Intermediate Accounting, 10 Ed
Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q
Ch. 9 - Explain the LIFO retail inventory method.Ch. 9 - Discuss the treatment of freight-in, net markups,...Ch. 9 - Explain the difference between the retail...Ch. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Explain the accounting treatment of material...Ch. 9 - Identify any differences between U.S. GAAP and...Ch. 9 - (Based on Appendix 9) Define purchase commitments....Ch. 9 - (Based on Appendix 9) Explain how purchase...Ch. 9 - Lower of cost or net realizable value LO91 Ross...Ch. 9 - Lower of cost or net realizable value LO91 SLR...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.5BECh. 9 - Gross profit method; solving for unknown LO92...Ch. 9 - Retail inventory method; average cost LO93 Kiddie...Ch. 9 - Retail inventory method; LIFO LO93 Refer to the...Ch. 9 - Conventional retail method LO94 Refer to the...Ch. 9 - Conventional retail method LO94 Roberson...Ch. 9 - Lower of cost or net realizable value LO91 Herman...Ch. 9 - Lower of cost or net realizable value LO91 The...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.11ECh. 9 - Concepts; terminology LO91 through LO97 Listed...Ch. 9 - Prob. 9.1PCh. 9 - Prob. 9.3PCh. 9 - Prob. 9.8PCh. 9 - Prob. 9.1DMPCh. 9 - Prob. 9.3DMPCh. 9 - Prob. 9.4DMPCh. 9 - Prob. 9.5DMPCh. 9 - Prob. 9.6DMPCh. 9 - Prob. 9.7DMPCh. 9 - Real World Case 98 Various inventory issues;...Ch. 9 - Prob. 9.9DMPCh. 9 - Judgment Case 910 Inventory errors LO97 Some...Ch. 9 - Prob. 9.12DMPCh. 9 - Prob. 2CCTC
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- Required information Problem 5-1A (Algo) Perpetual: Alternative cost flows LO P3 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date March 1 March 5 March 9 March 18. March 25 March 29 Gross Margin Sales Less: Cost of goods sold Gross profit Beginning inventory Purchase Sales Purchase Purchase. Activities Sales Totals $ $ FIFO Problem 5-1A (Algo) Part 4 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, units sold include 120 units from beginning inventory, 250 units from the March 5 purchase, 100 units from the March 18 purchase, and 140 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.) 40,570 $ 25.220 15,350 $ Units Acquired at Cost 210 units @ $53.20 per unit 280 units $58.20 per unit LIFO…arrow_forwardning Objective 2 S6-2 Determining inventory costing methods Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements 1. Which inventory costing method would best meet Ward's goal? 2. Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need?arrow_forwardQuestion 25 25. (CLO5, PLO5, ZULO1) The journal entry for purchase of inventory on account will require a: O debit to cost of goods sold and credit to inventory debit to sales returns and credit to revenues debit to inventory and credit to accounts payable debit to inventory and credit to accounts receivablearrow_forward
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- 4:07 Chapter7Activity Q Û Name: Astry Hernandez Canales Periodic inventory by three methods; cost of merchandise sold - page 383 EX 7-13. Inventory Method a. First-in, first-out b. Last-in, first-out c. Weighted average cost Breakdown each method below: Cost of merchandise available for sale: Merchandise inventory: Cost Merchandise Inventory $59,960 Merchandise Sold $172,900 $54,100 $167,040 $56,750 $170,250 900 units at $54 $48,600 1,120 units at $55 $61,600 1,000 units at $58 $58,000 980 units at $60 $58,800 4,000 units (at average cost of $ 56.75 $ 227,000 a. First-in, first-out: Merchandise inventory: units at $ $ units at $ 1,000 units $ Merchandise sold: $227,000 $ 59,960 $167.040 b. Last-in, first-out: C. Merchandise inventory: units at $ $ units at $ 1,000 units Merchandise sold: $227,000 - $ $ $ Weighted average cost: Merchandise inventory: 1,000 units at $ Merchandise sold: $227,000 - $ A Mobile View Read Aloud $ $ B Headingsarrow_forwardnces c raw Required information Problem 5-1A (Static) Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date March 1 March 5 March 9 March 18 March 25 March 29 Activities Beginning inventory Purchase Sales Purchase Purchase Sales Totals Problem 5-1A (Static) Part 4 Gross Margin Sales Less: Cost of goods sold Gross profit Units Acquired at Cost @ $50 per unit @ $55 per unit FIFO 100 units 400 units 120 units 200 units 820 units LIFO @ $60 per unit @ $62 per unit Prey 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, units sold include 80 units from beginning inventory, 340 units from the March 5 purchase, 40 units from the March 18 purchase, and 120 units from the March 25 purchase. (Round weighted average cost per unit to 2 decimal…arrow_forwardQuestion 9 of 40 A(n)_ is a refund of a portion of, but not all of, the sales price of an item. A. sales allowance B. uncollectable account C. sales return D. sales order SUBMITarrow_forward
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