Question 1 - The records of Novak's Boutique report the following data for the month of April.
|
Sales revenue
|
$101,000
|
Purchases (at cost)
|
$45,800
|
|
Sales returns
|
1,800
|
Purchases (at sales price)
|
91,400
|
|
Markups
|
11,000
|
Purchase returns (at cost)
|
1,800
|
|
Markup cancellations
|
1,500
|
Purchase returns (at sales price)
|
2,700
|
|
Markdowns
|
9,900
|
Beginning inventory (at cost)
|
31,280
|
|
Markdown cancellations
|
2,600
|
Beginning inventory (at sales price)
|
50,800
|
|
Freight on purchases
|
2,200
|
|
|
Compute the ending inventory by the conventional retail inventory method.
Question 2 - Wildhorse Inc. uses LIFO inventory costing. At January 1, 2017, inventory was $214,439 at both cost and market value. At December 31, 2017, the inventory was $283,974 at cost and $262,600 at market value.
Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method (b) Loss method.
Question 3 - Concord Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.
|
Item D
|
Item E
|
Item F
|
Item G
|
Item H
|
Item I
|
|
Estimated selling price
|
$125
|
$114
|
$99
|
$94
|
$114
|
$94
|
|
|
|
|
|
|
Cost
|
78
|
83
|
83
|
83
|
52
|
37
|
|
|
|
|
|
|
Cost to complete
|
31
|
31
|
26
|
36
|
31
|
31
|
|
|
|
|
|
|
Selling costs
|
10
|
19
|
10
|
21
|
10
|
21
|
|
|
|
|
|
Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above.
Question 4 - Novak Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.
|
Inventory, May 1
|
$ 174,600
|
|
Purchases (gross)
|
607,000
|
|
Freight-in
|
29,300
|
|
Sales revenue
|
983,300
|
|
Sales returns
|
67,700
|
|
Purchase discounts
|
12,700
|
Compute the estimated inventory at May 31, assuming that the gross profit is 20% of net sales.
Compute the estimated inventory at May 31, assuming that the gross profit is 20% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.)
Question 5 - Presented below is information related to Waterway Company.
|
Cost
|
Retail
|
|
Beginning inventory
|
$380,418
|
$282,000
|
|
Purchases
|
1,353,000
|
2,150,000
|
|
Markups
|
96,700
|
|
|
Markup cancellations
|
16,500
|
|
|
Markdowns
|
33,200
|
|
|
Markdown cancellations
|
4,600
|
|
|
Sales revenue
|
2,206,000
|
|
Compute the inventory by the conventional retail inventory method.