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Using the lower-of-cost-or-net realizable value approach Ex. 1—Lower-of-cost-or-net realizable value. The December 31, 2010 inventory of Gwynn Company consisted of four products, for which certain information is provided below. Estimated Expected Estimated Product Original Cost Completion Cost Selling Price Cost to sell A $25 $6 $40 $4 B $42 $12 $58 $8 C $120 $25 $150 $15 D $18 $3 $26 $2 Instructions Using the l ...

Other / Other 06 May 2016

The average days to sell inventory for Fry 1. Fry Corporation’s computation of cost of goods sold is: Beginning inventory $ 60,000 Add: Cost of goods purchased 405,000 Cost of goods available for sale 465,000 Ending inventory 90,000 Cost of goods sold $375,000 The average days to sell inventory for Fry are a. 58.4 days. b. 67.6 days. c. 73.0 days. d. 87.6 days. 2. East Corporation’s computation of cost of ...

Other / Other 06 May 2016

Assuming that carpenter Inc. uses the conventional retail inventory Pr. 1—Retail inventory method. Presented below is information related to Carpenter Inc. Cost Retail Inventory, 12/31/10 $375,000 $ 550,000 Purchases 1,369,000 2,050,000 Purchase returns 90,000 120,000 Purchase discounts 27,000 – Gross sales (after employee discounts) – 2,110,000 Sales returns – 145,000 Markups â€â ...

Other / Other 06 May 2016

Doran Realty Company purchased a plot of ground Ex. 1 – Relative sales value method. Doran Realty Company purchased a plot of ground for $800,000 and spent $2,100,000 in developing it for building lots. The lots were classified into Highland, Midland, and Lowland grades, to sell at $100,000, $75,000, and $50,000 each, respectively. Instructions Complete the table below to allocate the cost of the lots using a relative sales va ...

Other / Other 06 May 2016

Which of the following is not a reason the retail inventory method is used widely 1. When the conventional retail inventory method is used, markdowns are commonly ignored in the computation of the cost to retail ratio because a. there may be no markdowns in a given year. b. this tends to give a better approximation of the lower of cost or net realizable value. c. markups are also ignored. d. this tends to result in the showing of a no ...

Other / Other 06 May 2016

The appropriate cost per unit of inventory is 1. Lenny’s Llamas purchased 1,000 llamas on January 1, 2011. These llamas will be sheared semiannually and their wool sold to specialty clothing manufacturers. The llamas were purchased for $222,000. During 2011 the change in fair value due to growth and price changes is $14,100, the wool harvested but not yet sold is valued at net realizable value of $27,000, and the change in fair val ...

Other / Other 06 May 2016

What was the amount of the ending inventory 1. For 2010, cost of goods available for sale for Tate Corporation was $900,000. The gross profit rate was 20%. Sales for the year were $800,000. What was the amount of the ending inventory ? a. $0. b. $260,000. c. $180,000. d. $160,000. 2. On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available: Sales, January ...

Other / Other 06 May 2016

Which of the following statements is incorrect regarding the lower-of-cost-or-net 1. Which of the following statements is incorrect regarding the lower-of-cost-or-net realizable value (LCNRV)? a. Net realizable value (NRV) is the selling price less estimated costs to complete and estimated costs to make a sale. b. In most situations, companies price inventory on a total-inventory basis. c. One of two methods may be used to record the in ...

Other / Other 06 May 2016

Most purchase commitments must be recorded as a liability True or false: 1. An inventory of wheat held by a broker-trader is valued at net realizable value. 2. Agricultural produce is harvested from biological assets and is measured at fair value less costs to sell at the point of harvest. 3. In a basket purchase, the cost of the individual assets acquired is determined on the basis of their relative sales value. 4. A basket p ...

Other / Other 06 May 2016

The inventory turnover ratio is computed by dividing the cost of goods True or false: 1. The inventory turnover ratio is computed by dividing the cost of goods sold by the ending inventory on hand. 2. The average days to sell inventory represents the average number of days’ sales for which a company has inventory on hand. 3. Under IFRS, LIFO is permitted for financial reporting purposes if the company’s host country ...

Other / Other 06 May 2016