Brief Exercise 6-1
Farley Company identifies the following items for possible
inclusion in the taking of a physical inventory.
Indicate whether each item should be “Included” or “Not
Included” from the inventory taking.
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(a) |
Goods shipped on consignment by Farley to another company. |
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(b) |
Goods in transit from a supplier shipped FOB destination. |
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(c) |
Goods sold but being held for customer pickup. |
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(d) |
Goods held on consignment from another company. |
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Brief Exercise 6-2
Wilbur
Company has the following items:
Indicate whether each item should be “Included” or “Not
Included” from the inventory taking.
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(a) |
Freight-In |
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(b) |
Purchase Returns and Allowances |
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(c) |
Purchases |
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(d) |
Sales Discounts |
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(e) |
Purchase Discounts |
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Brief Exercise 6-8
Pettit Company reports net income of $80,050 in 2014.
However, ending inventory was understated $7,680.
What is the correct net income for 2014?
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The correct net income for 2014 |
$ |
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Exercise 6-1
Tri-State
Bank and Trust is considering giving Josef Company a loan. Before doing so,
management decides that further discussions with Josef’s accountant may be
desirable. One area of particular concern is the inventory account, which has a
year-end balance of $326,130. Discussions with the accountant reveal the
following.
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1. |
Josef sold goods costing $40,930 to Sorci Company, FOB |
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2. |
The physical count of the inventory did not include goods |
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3. |
Josef received goods costing $27,660 on January 2. The |
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4. |
Josef sold goods costing $35,440 to Natali Co., FOB |
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5. |
Josef received goods costing $47,890 on January 2 that were |
Determine the correct inventory amount on December 31.
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The correct inventory amount |
$ |
Exercise 6-9
Optix
Camera Shop uses the lower-of-cost-or-market basis for its inventory. The
following data are available at December 31.
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Item |
Units |
Unit Cost |
Market |
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Cameras: |
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Minolta |
7 |
$176 |
$154 |
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Canon |
9 |
149 |
173 |
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Light meters: |
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Vivitar |
14 |
137 |
107 |
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Kodak |
19 |
124 |
129 |
Determine the amount of the ending inventory by applying the
lower-of-cost-or-market basis.
Exercise 6-7
Lisa
Company had 137 units in beginning inventory at a total cost of
$14,659. The company purchased 274 units at a total cost of $36,442.
At the end of the year, Lisa had 110 units in ending inventory.
(a)
Compute the cost of the ending inventory and the cost of goods sold under FIFO,
LIFO, and average-cost.(Round
average-cost per unit and final answers to 0 decimal places, e.g. 1,250.)
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FIFO |
LIFO |
Average-cost |
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The cost of the ending inventory |
$ |
$ |
$ |
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The cost of goods sold |
$ |
$ |
$ |
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