Mortenson Corporation sells its product, a rare metal, in a controlled market with a quoted price applicable to all quantities. The total cost of 5,000 pounds of the metal now held in inventory is $200,000. The total selling price is $560,000, and estimated costs of disposal are $20,000. At what amount should the inventory of 5,000 pounds be reported in the balance sheet? Show
Rodriguez Corporation sells its product, a rare metal, in a controlled market with a quoted price applicable to all quantities. The total cost of 5,000 pounds of the metal now held in inventory is $315,000. The total selling price is $840,000, and estimated costs of disposal are $15,000. At what amount should the inventory of 5,000 pounds be reported in the balance sheet? Turner Corporation acquired two inventory items at a lump-sum cost of $120,000. The acquisition included 3,000 units of product LF, and 7,000 units of product 1B. LF normally sells for $30 per unit, and 1B for $10 per unit. If Turner sells 1,000 units of LF, what amount of gross profit should it recognize? Robertson Corporation acquired two inventory items at a lump-sum cost of
$96,000. The acquisition included 3,000 units of product CF, and 7,000 units of product 3B. CF normally sells for $27 per unit, and 3B for $9 per unit. If Robertson sells 1,000 units of CF, what amount of gross profit should it recognize? During the current fiscal year, Jeremiah Corp. signed a long-term noncancellable purchase commitment with its primary supplier. Jeremiah agreed to purchase $2.0
million of raw materials during the next fiscal year under this contract. At the end of the current fiscal year, the raw material to be purchased under this contract had a market value of $1.6 million. What is the journal entry at the end of the current fiscal year? During the prior fiscal year, Jeremiah Corp. signed a long-term noncancellable purchase commitment with its primary supplier to purchase $2.0 million of raw materials. Jeremiah paid the $2.0 million to acquire the raw materials when the raw materials were only worth $1.6
million. Assume that the purchase commitment was properly recorded. What is the journal entry to record the purchase? During 2017, Larue Co., a manufacturer of chocolate candies, contracted to purchase 250,000 pounds of cocoa beans at $4.00 per pound, delivery to be made in the spring of 2018. Because a record harvest is predicted for 2018, the price per pound for cocoa beans had fallen to $3.30 by December 31, 2017. The following information is available for October for Barton Company. The following information is available for October for Norton Company. Miles Company, a wholesaler, budgeted the following sales for the indicated months: All merchandise is marked up to sell at its invoice cost plus 20%. Merchandise inventories at the beginning of each month are at 30% of that month's projected cost of goods sold. The cost of goods sold for the month of June is anticipated to be Miles Company, a wholesaler, budgeted the
following sales for the indicated months: All merchandise is marked up to sell at its invoice cost plus 20%. Merchandise inventories at the beginning of each month are at 30% of that month's projected cost of goods sold. Merchandise purchases for July are anticipated to be Reyes Company had a gross profit of $620,000, total purchases of $840,000, and an ending inventory of $480,000 in its first year of operations as a retailer. Reyes's sales in its first year must have been Kesler, Inc. estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The
rate of markup on cost is 25%. The following account balances are available: On January 1, 2017, the merchandise inventory of Glaus, Inc. was $1,600,000. During 2017 Glaus purchased $3,200,000 of merchandise and recorded sales
of $4,000,000. The gross profit rate on these sales was 25%. What is the merchandise inventory of Glaus at December 31, 2017? On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available: The inventory account of Irick Company at December 31, 2017, included the following items: On August 31, a hurricane destroyed a retail location of Vinny's Clothier including the entire inventory on hand at the location. The inventory on hand as of June 30 totaled $1,920,000. Since June 30 until the time of
the hurricane, the company made purchases of $510,000 and had sales of $1,500,000. Assuming the rate of gross profit to selling price is 40%, what is the approximate value of the inventory that was destroyed? On October 31, a fire destroyed PH Inc.'s entire retail inventory. The inventory on hand as of January 1 totaled $2,720,000. From January 1 through the time of the fire, the company
made purchases of $660,000 and had sales of $1,440,000. Assuming the rate of gross profit to selling price is 40%, what is the approximate value of the inventory that was destroyed? On March 15, a fire destroyed Interlock Company's entire retail inventory. The inventory on hand as of January 1 totaled $6,600,000. From January 1 through the time of the fire, the company made purchases of
$2,732,000, incurred freight-in of $312,000, and had sales of $4,840,000. Assuming the rate of gross profit to selling price is 30%, what is the approximate value of the inventory that was destroyed? Dicer uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $390,000 ($594,000), purchases during the current
year at cost (retail) were $2,055,000 ($3,300,000), freight-in on these purchases totaled $129,000, sales during the current year totaled $3,000,000, and net markups (markdowns) were $72,000 ($108,000). What is the ending inventory value at cost? Boxer Inc. uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $393,500
($594,000), purchases during the current year at cost (retail) were $3,408,000 ($5,193,600), freight-in on these purchases totaled $159,500, sales during the current year totaled $4,666,000, and net markups were $414,000. What is the ending inventory value at cost? Barker Pet supply uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory
at cost (retail) were $796,800 ($980,700), purchases during the current year at cost (retail) were $3,205,800 ($4,158,300), freight-in on these purchases totaled $191,700, sales during the current year totaled $4,056,000, and net markups (markdowns) were $6,000 ($288,900). What is the ending inventory value at cost? Crane Sales Company uses the retail inventory method to value its merchandise
inventory. The following information is available for the current year: The following data concerning the retail inventory method are taken from the financial records of Welch Company. The ending inventory at retail should be The
following data concerning the retail inventory method are taken from the financial records of Welch Company. If the ending inventory is to be valued at approximately the lower of cost or market, the calculation of the cost-to-retail ratio should be based on goods available for sale at (1) cost and (2)
retail, respectively of The following data concerning the retail inventory method are taken from the financial records of Welch Company. If the foregoing figures are verified and a count of the ending inventory reveals that merchandise actually on hand amounts to $144,000 at retail, the business has The following data concerning the retail inventory method are taken from the financial records of Welch Company. Assuming no change in the price level if the LIFO inventory method were used in conjunction with the data, the ending inventory at cost would be The following data concerning the retail inventory method are
taken from the financial records of Welch Company. Assuming that the LIFO inventory method were used in conjunction with the data and that the inventory at retail had increased during the period, then the computation of retail in the cost-to-retail ratio would Drake Corporation had the following amounts, all at retail: Goren Corporation had the following amounts, all at retail: Plank Co. uses the retail inventory method. The following information is available for the current year. If the ending inventory is to be valued at approximately lower of average cost or market, the calculation of the cost ratio should be based on cost and retail of Plank Co. uses the retail inventory method. The following information is available for the current year. The ending inventory at retail should be Plank Co. uses the retail inventory method. The following information is available for the current year. The approximate cost of the ending inventory by the conventional retail method is Plank Co. uses the retail inventory method. The following information is available for the current year. If the ending inventory is to be valued at approximately LIFO cost, the calculation of the cost ratio should be based on cost and retail amounts of Plank Co. uses the retail inventory method. The following information is available for the current year. Assuming that the LIFO inventory method is used, that the beginning inventory is the base inventory when the index was 100,
and that the index at year end is 112, the ending inventory at dollar-value LIFO retail cost is Eaton Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2017:
Assuming stable prices (no change in the price index during 2017), what is the cost of Eaton's inventory at December 31, 2017? Eaton Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2017: Assuming that the price index was 105 at December 31, 2017 and 100 at January 1, 2017, what is the cost of Eaton's inventory at December 31, 2017 under the dollar-value-LIFO retail method? Which method may be used to record a loss due to a price decline in the value of inventory?The LCM method takes into account that the value of a good can fluctuate. Under this scenario, if the price at which the inventory may be sold dips below the net realizable value of the item, which consequently results in a loss, the LCM method can be employed to record the loss.
Which method's may be used to record a loss due to a price decline in the value of inventory quizlet?Which method(s) may be used to record a loss due to a price decline in the value of inventory? Both the cost-of-goods-sold method and the loss method.
Which inventory costing method is most conservative in period of declining inventory costs?LIFO is considered the most conservative inventory pricing method. I. FIFO means 'first-in, first-out'--the first items purchased are the first items sold. Inventory costs are assigned to the merchandise sold in the same order in which the purchases of merchandise were made.
Which inventory method approximates inventory valuation at the lowerRetail merchants can use the retail inventory method to price inventories at approximate cost or approximate lower of cost or market (LCM) instead of valuing inventory at actual cost or LCM.
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Which methods may be used to record a loss due to a price decline in the value of inventory quizlet?
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