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22.
eBook
Exercise 7-20
Inventory Errors
Goodwin Grocery
reported the following financial facts for 2011 and 2012:
Goodwin made two
accounting errors during the years:
- 2011 ending inventory was
understated by $3,000.
- 2012 ending inventory was overstated
by $4,000.
Required:
Compute Goodwin’s
correct cost of goods sold for each year.
|
|
Cost
of Goods Sold
|
|
2011
|
$
_________________
|
|
2012
|
$
_________________
|
|
22.
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eBook
Exercise 7-24
Estimating Inventory and Cost of Goods Sold
Marshall Inc.
experiences a fire in its warehouse at the end of the year, which destroys
its entire inventory. Marshall’s records show that it started the year with
$35,000 of inventory and purchased $150,000 during the year. It also shows
sales of $310,000 for the year. Normally, Marshall’s experiences a 55% gross
profit percentage on sales.
Required:
Use the gross
profit method to estimate Marshall’s cost of goods sold and ending inventory.
|
Cost of goods
sold
|
$
_________________
|
|
Ending inventory
|
$
_________________
|
|
23.
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eBook
Exercise 7-25
Applying Lower-of-Cost-or-Market
Kay Mart Company is
preparing financial statements and provides the following information about
several of its major inventory items at year end:
Required:
1. If Kay Mart uses the
lower-of-cost-or-market rule (LCM), what should it report as the balance of
inventory if one market value is computed for all inventories.
$ _________________
2. If Kay Mart uses the
lower-of-cost-or-market rule (LCM), what should it report as the balance of
inventory if a market value is computed for each inventory type?
|
Item
|
Inventory
Balance
|
|
R
|
$
_________________
|
|
|
|
S
|
_________________
|
|
|
|
T
|
_________________
|
|
|
|
U
|
_________________
|
|
|
|
V
|
_________________
|
|
|
|
Total
|
$
_________________
|
|
|
|
24.
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eBook
Exercise 7-27
Accounting Terms
The following is a
list of terms and definitions associated with inventory:
Required:
Match each term
with the appropriate definition by clicking on the term first and then
clicking on the definition that describes it.
|
25.
eBook
Problem 7-38
Recording Inventory Activity
Campbell Candy
Company starts the month of January with 40 boxes of Tiger Bars costing $20
each. The following transactions occurred during the month:
Required:
|
a. Prepare all necessary journal entries
related to Campbell’s inventory activity. Campbell uses a perpetual inventory
system and the FIFO inventory costing method.
|
|
b. Suppose that the inventory has a
replacement value of $375 at the end of the month. What entry, if any, is
required?
|
