Part 1
This assignment will help you identify and determine which items based on timing and ownership should be included in the inventory.
Follow the instructions found in the template
Part 2
This assignment will help understand the impact of depreciating inventory values and how to account for reducing the value of inventory using the Lower of Cost or Market Method (LCOM)( Net Realizable Value).
Follow the instructions found in the template
Part 3
Follow the instructions found in the template Inventory Calculations
Arlington Company uses a periodic inventory system. It entered
into the following purchases and sales transactions for March.
Units sell for $85 per unit. Inventory costs are calculated at the
end of the month.
Units
Date
Activities
Sold
Units
cost
Sold
Cost
Beginning
1-Mar inventory
5-Mar Purchase
9-Mar Sales
16-Mar Purchase
25-Mar Purchase
29-Mar Sales
100
400
50
55
420
120
200
60
62
160
For specific identification, the March 9 sale consisted of 80 units from beginning
inventory and 340 units from the March 5 purchase; the March 29 sale consisted of
40 units from the March 16 purchase and 120 units from the March 25 purchase.
a.
Compute the Goods available for sale and the number of units for sale
Cost of Goods Available for Sale
# of Units
Cost per
Unit
Beginning
inventory
Purchases:
5-Mar
16-Mar
March 25
Total
b. Compute the number of units in ending inventory.
Units
available
Less: Units
sold
Ending
inventory
(units)
Cost of
Goods
Available
for Sale
c. Compute the cost of ending inventory using the FIFO method
Date
Units
Activities
Sold
Cost
Beginning
1-Mar inventory
5-Mar Purchase
9-Mar Sales
16-Mar Purchase
25-Mar Purchase
29-Mar Sales
FIFO
100
400
50
55
420
120
200
60
62
160
Cost of Goods Sold
Date
Sales
1-Mar
5-Mar
16-Mar
25-Mar
Totals
Units sold
units
Cost per
unit
Ending Inventory
Cost of
goods sold
# ending
inventory
Cost per
unit
$ Ending
Inventory
d. Compute the cost of ending inventory using the LIFO method
Date
Units
Activities
Beginning
1-Mar inventory
5-Mar Purchase
9-Mar Sales
16-Mar Purchase
25-Mar Purchase
29-Mar Sales
LIFO
Date
Sales
25-Mar
16-Mar
5-Mar
1-Mar
Totals
Sold
Cost
100
400
50
55
420
120
200
60
62
160
Cost of Goods Sold
Units sold
units
Cost per
unit
Ending Inventory
Cost of
goods sold
# ending
inventory
Cost per
unit
$ Ending
Inventory
e. Compute the cost of ending inventory using the Specific Identification method
For specific identification, the March 9 sale consisted of 80 units from beginning inventory and
340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March
16 purchase and 120 units from the March 25 purchase.
Date
Units
Activities
Beginning
1-Mar inventory
5-Mar Purchase
9-Mar Sales
16-Mar Purchase
25-Mar Purchase
29-Mar Sales
SPEC ID
Date
Sold
Cost
100
400
50
55
420
120
200
60
62
160
Cost of Goods Sold
Units sold
units
Ending Inventory
Cost of goods
Cost per unit
sold
# ending
inventory
Cost per
unit
$ Ending
Inventory
Sales
1-Mar
5-Mar
16-Mar
25-Mar
Totals
f. Compute the cost of ending inventory using the Weighted Average method
Date
Units
Activities
Beginning
1-Mar inventory
5-Mar Purchase
9-Mar Sales
16-Mar Purchase
25-Mar Purchase
29-Mar Sales
Average
Date
Sold
Cost
100
400
50
55
420
120
200
60
62
160
Cost of Goods Sold
Units sold
units
Cost of goods
Cost per unit
sold
Sales
1-Mar
5-Mar
16-Mar
25-Mar
Totals
Cost of goods sold
Ending Inventory
# ending
inventory
Cost per
unit
$ Ending
Inventory
g. Compute Gross margin for each inventory costing methods
FIFO
Units Sold
price per unit
total sales
Cost of Goods
Sold
Gross Margin
Ending
Inventory
LIFO
Spec ID
Average
Lower of Cost or Market
Central Cellualr Co. has the following products in
its ending inventory.
Product
Quantity
Iphone 468
I phone 789
Ipone 1150
190
240
140
Cost per
unit
600
800
750
Market per
Unit
550
750
1300
Per Unit
Inventory Items
Iphone 468
I phone 789
Ipone 1150
Totals
QTY
Cost
Market
Total
Cost
Market
LCM applied to
each product
$0
Determining the Correct Inventory Amount
Backwoods ATV, a dealer acquires a used vehicles for
$8,000, with terms FOB shipping point. Compute total inventory
costs assigned to the used ATV if additional costs include
$180 for transportation-in.
$140 for shipping insurance.
$810 for car import duties.
$140 for advertising.
$1,000 for sales staff salaries.
$130 for trimming shrubs.
Cost
Transportation-in
Insurance during shipment
Import Duties
Advertising
Sales staff salaries
Trimming shrubs
Total
180
140
810
140
1000
130
Included in
Expensed
Inventory Cost
as incurred
$0
$0
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
