Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Textbook Question
Chapter 5, Problem 5.22MCE
Cost of Goods Sold, FIFO, and LIFO
Kramer began operations early in 2016 and made the following purchases:
Kramer used the FIFO method to value its inventory and reported cost of goods sold expense for the year of $4,000.
Required
Determine the cost of goods sold expense assuming Kramer had used the LIFO method instead of the FIFO method.
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Year 2
$ 320
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LIFO inventory
LIFO cost of goods sold
FIFO inventory
FIFO cost of goods sold
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Days' sales in inventory
Year 1
$ 270
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380
450
180
Current ratio
Inventory turnover
Days' sales in inventory
(a) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using LIFO
numbers.
Numerator / Denominator
295
840
350
375
160
Numerator / Denominator
(b) Compute its current ratio, inventory turnover, and days' sales in inventory for Year 2 using FIFO
numbers.
Ratio
0
0
0
Ratio
0
0
0
(Inventoriable Goods and Costs) In your audit of Jose Oliva Company, you find that a physical inventory on December 31, 2017, showed merchandise with a cost of $441,000 was on hand at that date. You also discover the following items were all excluded from the $441,000.1. Merchandise of $61,000 which is held by Oliva on consignment. The consignor is the Max Suzuki Company.2. Merchandise costing $38,000 which was shipped by Oliva f.o.b. destination to a customer on December 31, 2017. The customer was expected to receive the merchandise on January 6, 2018.3. Merchandise costing $46,000 which was shipped by Oliva f.o.b. shipping point to a customer on December 29, 2017. The customer was scheduled to receive the merchandise on January 2, 2018.4. Merchandise costing $83,000 shipped by a vendor f.o.b. destination on December 30, 2017, and received by Oliva on January 4, 2018.5. Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on December 31, 2017, and received by Oliva on…
Chapter 5 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 5 - Merchandise Accounting Merchandise Inventory Raw...Ch. 5 - Inventory Valuation Specific identification method...Ch. 5 - Inventoriable Costs During the first month of...Ch. 5 - Perpetual and Periodic Inventory Systems Following...Ch. 5 - Missing Amounts in Cost of Goods Sold Model For...Ch. 5 - Purchase Discounts For each of the following...Ch. 5 - Working Backward: Gross Profit Ratio Acmes gross...Ch. 5 - Inventory Costing Methods VanderMeer Inc. reported...Ch. 5 - Cost of Goods Sold, FIFO, and LIFO Kramer began...Ch. 5 - Comparison of Inventory Costing Methods—Periodic...
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