Accounting I   © 2008 Tibebe S. Mengistu

Assignments for Principles of Accounting I Chapter 10

Assignment 1

A Metal company has the following inventory transactions during the month of March:

March 1 Beginning Inventory 4,000 units @ $2.00 $8,000
Week 1, purchases 2,000 units @ $2.10 $4,200
Week 2, purchases 2,000 units @ $2.20 $4,400
Week 3, purchases 1,000 units @ $2.30 $2,300
Week 4, purchases 1,000 units @ $2.40 $2,400

On March 31, a count of the ending inventory was completed, and 5,500 units were on hand. By using the periodic system, calculate the cost of goods sold and ending inventory using LIFO, FIFO and weighted-average inventory methods.

Assignment 2

A wholesaler for commercial builders uses a perpetual inventory system and a FIFO cost-flow assumption. The data concerning its inventory for the year 20X7 is as follows:

 
Purchased
Sold
Balance
December 31, 20X6     110 @ $5 = $550
Feb. 10, 20X7 80 @ $6 = $480    
April 14  
60
May 9 110 @ $7 = $770
July 14  
120
August 21 100 @ $8 = $800
September 12  
75
Total 290 $2,050
255

Calculate the ending inventory balance in units and dollars.

Assignment 3

A company began business on March 15, 20X7. The following are purchases of inventory.

March 17
100 units @ $10
$1,000
April 19
50 units @ $12
600
May 14
100 units @ $13
1,300
Total
 
$2,900

On May 25, 140 units were sold, leaving inventory of 110 units. The company's accountant was preparing a balance sheet for June 1, at which time the replacement cost of inventory was $12 per unit.

1. Suppose the company uses LIFO, without applying lower-of-cost-or-market. Compute the June 1 inventory amount.

2. Suppose the company uses lower-of-LIFO-cost-or-market. Compute the June 1 inventory amount.

3. Suppose the company uses FIFO, without applying lower-of-cost-or-market. Compute the June 1 inventory amount.

4. Suppose the company uses lower-of-FIFO-cost-or-market. Compute the June 1 inventory amount.