Inventory

Problem 1 

A subsidiary of J & J Products is in the process of preparing interim financial statements. Since they take physical inventory on an annual basis they use the Conventional Retail Inventory Method to estimate inventory. Fortunately, J &J Products keeps very detailed inventory records at both cost and retail. The following information for containers, as of the end of the third quarter, 2015, is provided. 

Cost                Retail 

Beginning inventory               90,000             167,000 

Purchases                                250,000           435,000 

Purchase returns                      8,000 

Markups                                                          10,000 

Markup cancellations                                      25,000 

Markdowns                                                     5,000 

Employee discounts                                        9,000 

Sales                                                    400,000 

Using the conventional retail inventory method calculate ending inventory at cost (for the third quarter of 2015). 

Problem 2 

J & J Products ordered $125,000 of raw material, FOB destination, from Acme Company on Dec. 31st of 2015. The merchandise was shipped on January 2nd. J & J Products did not include it in their 2015 raw materials inventory. Prepare any necessary entries. 

Problem 3 

A wholly owned subsidiary of J & J Products implemented Dollar Value LIFO inventory valuation in 2010, when their ending inventory was $650,000. The following are the inventory amounts for an ingredient used in packaging for years 2011 - 2015. The price index has been increasing by 5% each year 2011 through 2015.