Exam 8: Valuation of Inventories: a Cost-Basis Approach

Use the following information for 123 and 124 Hay Company had January 1 inventory of $180,000 when it adopted dollar-value LIFO. During the year, purchases were $1,080,000 and sales were $1,800,000. December 31 inventory at year-end prices was $227,700, and the price index was 110. -What is Hay Company's ending inventory?

Use the following information for questions 100 and 101. Niles Co. has the following data related to an item of inventory: -The value assigned to ending inventory if Niles uses LIFO is

Inventory methods. Jones Company was formed on December 1, 2013. The following information is available from Jones's inventory record for Product X. A physical inventory on March 31, 2014, shows 2,000 units on hand. Instructions Prepare schedules to compute the ending inventory at March 31, 2014, under each of the following inventory methods: (a) FIFO. (b) LIFO. (c) Weighted-average.Show supporting computations in good form.

On June 15, 2014, Wynne Corporation accepted delivery of merchandise which it pur-chased on account. As of June 30, Wynne had not recorded the transaction or included the merchandise in its inventory. The effect of this on its balance sheet for June 30, 2014 would be

During periods of rising prices, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory cost flow methods?

Tanner Corporation's inventory on its balance sheet was lower using first-in, first-out than it would have been using last-in, first-out. Assuming no beginning inventory, in what direction did the cost of purchases move during the period?

Emley Company has been using the LIFO method of inventory valuation for 10 years, since it began operations. Its 2014 ending inventory was $50,000, but it would have been $75,000 if FIFO had been used. Thus, if FIFO had been used, Emley's income before income taxes would have been

Both U.S. GAAP and IFRS exclude which of the following from the cost of inventory?

Goods in transit which are shipped F.o.b. destination should be

FIFO and LIFO inventory methods.During June, the following changes in inventory item 27 took place: Perpetual inventories are maintained. InstructionsWhat is the cost of the ending inventory for item 27 under the following methods? (Show calculations.) (a) FIFO. (b) LIFO.

How is a significant amount of consignment inventory reported in the balance sheet?

Analysis of gross profit. During 2014, King's Drug Company experienced a significant increase in the rate of gross profit on sales, compared with the rate it has averaged in recent years. You are asked to determine the most likely reason for this improvement. Support your answer.The following data are from the records of the company:2014 sales (at an average price of $40 a unit) were $2,300,000.2014 purchases (at an average cost of $24 a unit) were $1,200,000.The company uses the LIFO inventory method and has used it since 1985.

In all cases when FIFO is used, the cost of goods sold would be the same whether a perpetual or periodic system is used.