Learning Materials
Features
Discover
Chapter 8: Q5BE (page 422)
Question:Data for Amsterdam Company are presented in BE8-4. Compute the April 30 inventory and the April cost of
goods sold using the FIFO method.
The ending inventory on April 30 was $5,150 and the cost of goods sold amounts to$6,700.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Oasis Company has used the dollar-value LIFO method for inventory cost determination for many years. The following data were extracted from Oasis’ records.
Price Ending Inventory Ending Inventory
Date Index at Base Prices at Dollar-Value LIFO
December 31, 2017 105 \(92,000 \)92,600
December 31, 2018 ? 97,000 98,350
Instructions
Calculate the index used for 2018 that yielded the above results.
Inventory information for Part 311 of Monique Aaron Corp. discloses the following information for the month of June.
June 1 Balance 300 units @ \(10 June 10 Sold 200 units @ \)24
11 Purchased 800 units @ \(12 15 Sold 500 units @ \)25
20 Purchased 500 units @ \(13 27 Sold 300 units @ \)27
Instructions
(a) Assuming that the periodic inventory method is used, compute the cost of goods sold and ending inventory under(1) LIFO and (2) FIFO.
(b) Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the value of the ending inventory at LIFO?
(c) Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO?
(d) Why is it stated that LIFO usually produces a lower gross profit than FIFO?
The board of directors of Ichiro Corporation is considering whether or not it should instruct the accounting department to shift from a first-in, first out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available.
Sales 21,000 units @ \(50
Inventory, January 1 6,000 units @ 20
Purchases 6,000 units @ 22
10,000 units @ 25
7,000 units @ 30
Inventory, December 31 8,000 units @ ?
Operating expenses \)200,000
Instructions
Prepare a condensed income statement for the year on both bases for comparative purposes.
Define “cost” as applied to the valuation of inventories.
Question:Tori Amos Corporation began operations on December 1, 2016. The only inventory transaction in 2016 was the purchase of inventory on December 10, 2016, at a cost of \(20 per unit. None of this inventory was sold in 2016. Relevant information is as follows.
Ending inventory units
December 31, 2016 100
December 31, 2017, by purchase date
December 2, 2017 100
July 20, 2017 50 150
During the year, the following purchases and sales were made.
Purchases Sales
March 15 300 units at \)24 April 10 200
July 20 300 units at 25 August 20 300
September 4 200 units at 28 November 18 150
December 2 100 units at 30 December 12 200
The company uses the periodic inventory method.
Instructions
(a) Determine ending inventory under (1) specific identification, (2) FIFO, (3) LIFO, and (4) average cost.
(b) Determine ending inventory using dollar-value LIFO. Assume that the December 2, 2017, purchase cost is the current cost of inventory. (Hint:The beginning inventory is the base layer priced at $20 per unit.)
What do you think about this solution?
We value your feedback to improve our textbook solutions.
Explanations 
Textbooks 
Exams 
GCSE 
IGCSE 
AS 
A Level 
International A Level 
University Admissions Tests 
Flashcards 
Vaia AI 
Notes 
Study Plans 
Study Sets 
Find a job 
Find a degree 
Student Deals 
Magazine 
Mobile App