Question 1
Headland Company uses a periodic inventory system. For April, when the company sold 560 units, the following information is available.
|
|
Units
|
Unit Cost
|
Total Cost
|
|
April 1 inventory
|
240
|
$27
|
$ 6,480
|
|
April 15 purchase
|
370
|
32
|
11,840
|
|
April 23 purchase
|
390
|
35
|
13,650
|
|
|
1,000
|
|
$31,970
|
Compute the April 30 inventory and the April cost of goods sold using the FIFO method.
Question 2
Sandhill Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.
|
|
Units
|
Unit Cost
|
Total Cost
|
|
April 1 inventory
|
350
|
$24
|
$ 8,400
|
|
April 15 purchase
|
370
|
29
|
10,730
|
|
April 23 purchase
|
280
|
31
|
8,680
|
|
|
1,000
|
|
$27,810
|
Compute the April 30 inventory and the April cost of goods sold using the LIFO method.
Question 3
Presented below is information related to Sarasota Inc.'s inventory, assuming Sarasota uses lower-of-LIFO cost-or-market.
|
(per unit)
|
Skis
|
Boots
|
Parkas
|
|
Historical cost
|
$235.60
|
$131.44
|
$65.72
|
|
Selling price
|
262.88
|
179.80
|
91.45
|
|
Cost to distribute
|
23.56
|
9.92
|
3.10
|
|
Current replacement cost
|
251.72
|
130.20
|
63.24
|
|
Normal profit margin
|
39.68
|
35.96
|
26.35
|
Determine the following:
(a) The two limits to market value (i.e., the ceiling and the floor) that should be used in the lower-of-cost-or-market computation for skis.
(b) The cost amount that should be used in the lower-of-cost-or-market comparison of boots.
(c) The market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.
Question 4
A fire destroys all of the merchandise of Indigo Company on February 10, 2017. Presented below is information compiled up to the date of the fire.
|
Inventory, January 1, 2017
|
$411,600
|
|
Sales revenue to February 10, 2017
|
1,990,300
|
|
Purchases to February 10, 2017
|
1,145,430
|
|
Freight-in to February 10, 2017
|
63,700
|
|
Rate of gross profit on selling price
|
30%
|
What is the approximate inventory on February 10, 2017?