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 9.9BE
Conventional retail method
• LO9–4
Refer to the situation described in BE 9–7. Estimate ending inventory and cost of goods sold using the conventional method.
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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…
Question 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 receivable
ning 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?
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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- QUESTION 11 Match the term on the left to the appropriate description on the right. v Cost of goods available for sale (COGAS) A. A valuation rule applied to ending inventory. v LIFO reserve B. The maximum value that cost of goods sold (COGS) can be in a period. C. The amount by which inventory measured under FIFO would exceed inventory measured under LIFO v Lower-of-cost-or-market v Inventory turnover ratio. D. An inventory cost flow assumption. E. A measure for evaluating a company's inventory management. v FIFO (first-in, first out) v Periodic inventory F. A system for calculating COGS based on ending inventory value.arrow_forwardRequired information Use the following information for the Exercises 8-10 below. (Algo) [The following information applies to the questions displayed below.] Hemming Company reported the following current-year purchases and sales for its only product. Date January 1 January 10 March 14 March 15 July 30 October 5 October 26 Activities Beginning inventory Sales Purchase Sales Purchase Sales Purchase Totals Units Acquired at Cost @$11.40 235 units 360 units 435 units 135 units 1,165 units @$16.40 @$21.40 = @$26.40 = $ 2,679 5,904 9,309 3,564 $ 21,456 Units Sold at Retail 170 units 290 units 410 units 870 units @$41.40 @ $41.40 @$41.40arrow_forwardPARRISH MODULE 5 INVENTORY-DIFFERENCES Please explain the differences between the following transactions. Both involve reduction in price of imperfect inventory but different accounts are used. In Transaction 2 the Periodic and Perpetual Method accounts used are exactly the same. Would you please explain, point out the differences and why they are recorded differently. Transaction 1. Reduction in price of imperfect inventory for $10 Periodic Method Accounts Payable or Cash 10 Purchase Allowances 10 Perpetual Method Accounts Payable or Cash 10 Inventory 10 Transaction 2. Reduction in price of imperfect items sold for $53; reduction allowed is $25 Periodic Method Sales Allowances 25 Accounts Payable or Cash 25 Perpetual Method Sales Allowances 25 Accounts Payable or Cash 25arrow_forward
- Exercise 5-3 (Algo) Perpetual: Inventory costing methods LO P1 Assume the perpetual inventory system is used. Required: Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.arrow_forward38. In a period of falling prices, the use of which inventory cost flow method would typically result in the highest cost of goods sold? a• FIFO b• LIFO c• Weighted average d• Specific identificationarrow_forwardA v2.cengagenow.com Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10. Market Value per Unit Item Inventory Quantity Cost per Unit (Net Realizable Value) JFW1 58 $29 $24 SAW9 119 15 20 Check My Work Previous Next All work saved. Save and Exit Submit Assignment for Grac %24arrow_forward
- Question 13 of 25 0.5/1 onoW HEtemperstory Current Attempt in Progress Debra's Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to Debra's purchases of Xpert snowboards during September is shown below. During the same month, 124 Xpert snowboards were sold. Debra's uses a periodic inventory system. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 28 $95 $2.660 Sept. 12 Purchases 45 103 4,635 Sept. 19 Purchases 20 105 2.100 Sept. 26 Purchases 50 106 5,300 Totals 143 $14,695 (a) !!!arrow_forward( Appendix 6B) For each inventory costing method, perpetual and periodic systems yield the same amounts for ending inventory and cost of goods sold. Do you agree or disagree with this statement? Explain.arrow_forwarden Final Contabilidad Intermedia 3007 Lunes 24 de mayo de 2021 7 When net realizable value is lower than cost, and the loss method applying the lower-of-cost-and-net-realizable approach of recording the write-down is used, what account is credited? der O a. Inventory. mo O b. Allowance to Reduce Inventory to NRV. O c. A loss account. O d. Cost of Goods Sold. here to search 近arrow_forward
- 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_forwardEnding Inventory and Cost of goods sold using LIFO?arrow_forwardLower-of-Cost-or-Market Method OBJ. 6 EE 7-6 On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item, as shown in Exhibit 9. Item Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) Raven 10 1,700 $163 $159 Dove 23 9,200 24 30arrow_forward
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