Eaton company which uses the retail lifo

In , RS should recognize. C no gain or loss. Using the gross profit method, the estimated ending inventory destroyed by fire is. Q96 Q96 Q96 Use the following information for questions 96 and Q97 Q97 Q97 Use the following information for questions 96 and Reyes's sales in its first year must have been. Q Q Q Kesler, Inc. The following account balances are available: The estimate of the cost of inventory at March 31 would be.

What is the merchandise inventory of Glaus at December 31, ? What was the amount of the ending inventory? Q Q Q On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available: The amount of the inventory loss is estimated to be.

Q Q Q The inventory account of Irick Company at December 31, , included the following items: Based on the above information, the inventory account at December 31, , should be reduced by. What is the gross profit as a percentage of cost? What is the dollar amount of the gross profit? Q Q Q On August 31, a hurricane destroyed a retail location of Vinny's Clothier including the entire inventory on hand at the location.

Q Q Q Dicer uses the conventional retail method to determine its ending inventory at cost. What is the ending inventory value at cost? Q Q Q Boxer Inc.

Q Q Q Barker Pet supply uses the conventional retail method to determine its ending inventory at cost. Q Q Q Crane Sales Company uses the retail inventory method to value its merchandise inventory.

The following information is available for the current year: If the ending inventory is to be valued at the lower-of-cost-or-market, what is the cost-to-retail ratio?

Q Q Q Use the following information for questions through The following data concerning the retail inventory method are taken from the financial records of Welch Company. Q Q Q Drake Corporation had the following amounts, all at retail: What is Drake's ending inventory at retail? Q Q Q Goren Corporation had the following amounts, all at retail: What is Goren's ending inventory at retail? Q Q Q Fry Corporation's computation of cost of goods sold is: The average days to sell inventory for Fry are.

Q Q Q East Corporation's computation of cost of goods sold is: The average days to sell inventory for East are. Sito's inventory turnover ratio for is. Plank Co. The following information is available for the current year. Q Q Q Use the following information for questions and Eaton Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for -Assuming stable prices no change in the price index during , what is the cost of Eaton's inventory at December 31, ?

Eaton Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for -Assuming that the price index was at December 31, and at January 1, , what is the cost of Eaton's inventory at December 31, under the dollar-value-LIFO retail method? Information pertaining to that inventory follows: Ryan records losses that result from applying the lower-of-cost-or-market rule. At December 31, , the loss that Ryan should recognize is.

Q Q Q Under the lower-of-cost-or-market method, the replacement cost of an inventory item would be used as the designated market value. Q Q Q The original cost of an inventory item is above the replacement cost and the net realizable value.

The replacement cost is below the net realizable value less the normal profit margin. As a result, under the lower-of-cost-or-market method, the inventory item should be reported at the. Keen suspects some inventory may have been taken by a new employee. At December 31, , what is the estimated cost of missing inventory? Q Q Q Henke Co. Data relating to the computation of the inventory at July 31, , are as follows: Under the lower-of-cost-or-market method, Henke's estimated inventory at July 31, is.

Under the lower-of-cost-or-market method, Kohl's inventory at December 31, was. Q Q Q Lower-of-cost-or-market. Determine the proper unit inventory price in the following independent cases by applying the lower of cost or market rule.

Related Questions. LIFO retail inventory method, stable prices. Raleigh Department Store uses the conventional retail method for the year ended December 31, Available information follows: a. The following information is available for the year Create an Account and Get the Solution.

Log into your existing Transtutors account. Have an account already? Click here to Login. No Account Yet? In the retail inventory method, the term markup means a markup on the original cost of an inventory item. In the retail inventory method, abnormal shortages are deducted from both the cost and retail amounts and reported as a loss. The inventory turnover ratio is computed by dividing the cost of goods sold by the ending inventory on hand.

The LIFO retail method assumes that markups and markdowns apply only to the goods purchased during the period. True False Answers—Conceptual Item 1. Which of the following is true about lower-of-cost-or-market? It is inconsistent because losses are recognized but not gains. It usually understates assets. It can increase future income. All of these.

The primary basis of accounting for inventories is cost. A departure from the cost basis of pricing the inventory is required where there is evidence that when the goods are sold in the ordinary course of business their a.

Net realizable value b. Net realizable value less a normal profit margin c. Current replacement cost d. Discounted present value Inventories: Additional Valuation Issues S Designated market value a. Lower-of-cost-or-market a. Which of the following statements is not true? The cost of sales of the following year will be understated. The current year's income is understated.

The closing inventory of the current year is understated. Income of the following year will be understated. When the direct method is used to record inventory at market a. Lower-of-cost-or-market as it applies to inventory is best described as the a. The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the a. What is the rationale behind the ceiling when applying the lower-of-cost-or-market method to inventory?

Prevents understatement of the inventory value. Allows for a normal profit to be earned. Allows for items to be valued at replacement cost. Prevents overstatement of the value of obsolete or damaged inventories. Why are inventories stated at lower-of-cost-or-market? To report a loss when there is a decrease in the future utility. To be conservative. To report a loss when there is a decrease in the future utility below the original cost. To permit future profits to be recognized.

Which of the following is not an acceptable approach in applying the lower-of-cost-ormarket method to inventory? Inventory location.

Categories of inventory items. Individual item. Total of the inventory. Which method s may be used to record a loss due to a price decline in the value of inventory? Allowance method. Sales method. Direct method d. Both a and c. Why might inventory be reported at sales prices net realizable value or market price rather than cost?

When there is a controlled market with a quoted price applicable to all quantities and when there are no significant costs of disposal. When there are no significant costs of disposal. When a non-cancellable contract exists to sell the inventory. When there is a controlled market with a quoted price applicable to all quantities. Recording inventory at net realizable value is permitted, even if it is above cost, when there are no significant costs of disposal involved and a.

When inventory declines in value below original historical cost, and this decline is considered other than temporary, what is the maximum amount that the inventory can be valued at? Sales price b. Net realizable value c. Historical cost d. Net realizable value reduced by a normal profit margin Inventories: Additional Valuation Issues P 9 - 11 Net realizable value is a.

If a unit of inventory has declined in value below original cost, but the market value exceeds net realizable value, the amount to be used for purposes of inventory valuation is a. Inventory may be recorded at net realizable value if a.

If a material amount of inventory has been ordered through a formal purchase contract at the balance sheet date for future delivery at firm prices, a. The credit balance that arises when a net loss on a purchase commitment is recognized should be a. The journal entry to record this situation at December 31, will result in a credit that should be reported a. The company prices its inventory at the lower of cost or market.

No impact. Disclose the existence of the purchase commitment. How is the gross profit method used as it relates to inventory valuation?

Verify the accuracy of the perpetual inventory records. Verity the accuracy of the physical inventory. To estimate cost of goods sold. To provide an inventory value of LIFO inventories. Which of the following is not a basic assumption of the gross profit method? The beginning inventory plus the purchases equal total goods to be accounted for. Goods not sold must be on hand. If the sales, reduced to the cost basis, are deducted from the sum of the opening inventory plus purchases, the result is the amount of inventory on hand.

The total amount of purchases and the total amount of sales remain relatively unchanged from the comparable previous period. The gross profit method of inventory valuation is invalid when a.

Which statement is not true about the gross profit method of inventory valuation? It may be used to estimate inventories for interim statements. It may be used to estimate inventories for annual statements. It may be used by auditors. None of these. A major advantage of the retail inventory method is that it a. An inventory method which is designed to approximate inventory valuation at the lower of cost or market is a.

Inventories: Additional Valuation Issues 9 - 13 The retail inventory method is based on the assumption that the a. Which statement is true about the retail inventory method? It may not be used to estimate inventories for interim statements.

It may not be used to estimate inventories for annual statements. It may not be used by auditors. When the conventional retail inventory method is used, markdowns are commonly ignored in the computation of the cost to retail ratio because a. To produce an inventory valuation which approximates the lower of cost or market using the conventional retail inventory method, the computation of the ratio of cost to retail should a. When calculating the cost ratio for the retail inventory method, a. Which of the following is not required when using the retail inventory method?

All inventory items must be categorized according to the retail markup percentage which reflects the item's selling price. A record of the total cost and retail value of goods purchased. A record of the total cost and retail value of the goods available for sale. Total sales for the period. Which of the following is not a reason the retail inventory method is used widely?

As a control measure in determining inventory shortages b. For insurance information c. To permit the computation of net income without a physical count of inventory d. What condition is not necessary in order to use the retail method to provide inventory results? Retailer keeps a record of the total costs of products sold for the period. Retailer keeps a record of the total costs and retail value of goods purchased. Retailer keeps a record of the total costs and retail value of goods available for sale.

Retailer keeps a record of sales for the period. What method yields results that are essentially the same as those of the conventional retail method? Average cost. What is the effect of net markups on the cost-retail ratio when using the conventional retail method?

Increases the cost-retail ratio. No effect on the cost-retail ratio. Depends on the amount of the net markdowns. Decreases the cost-retail ratio. What is the effect of freight-in on the cost-retail ratio when using the conventional retail method? Depends on the amount of the net markups. The acquisition included 3, units of product CF, and 7, units of product 3B. If Robertson sells 1, units of CF, what amount of gross profit should it recognize?

Item No. N 2, 8. O 6, 4. The appropriate cost per unit of inventory is:. Confectioners, a chain of candy stores, purchases its candy in bulk from its suppliers. Group 2 consists of 5, pieces that are expected to sell for 0. Using the relative sales value method, what is the cost per item in group 1? Using the relative sales value method, what is the cost per item in group 2? Using the relative sales value method, what is the cost per item in group 3?

During the current fiscal year, Jeremiah Corp. What is the journal entry at the end of the current fiscal year? No journal entry is required. During the prior fiscal year, Jeremiah Corp. Assume that the purchase commitment was properly recorded. What is the journal entry to record the purchase? During , Larue Co. Of the following journal entries, the one which would properly reflect in the effect of the commitment of Larue Co. Cocoa Inventory Accounts Payable Loss on Purchase Commitments Estimated Loss on Purchase Commitments Estimated Liability on Purchase Commitments..

No entry would be necessary in In , AJ should recognize. In , LF should recognize. The following information is available for October for Barton Company. Net purchases , Net sales , Percentage markup on cost Using the gross profit method, the estimated ending inventory destroyed by fire is.

The following information is available for October for Norton Company. Use the following information for questions 96 and Miles Company, a wholesaler, budgeted the following sales for the indicated months:. June July August. Cash sales , , , The cost of goods sold for the month of June is anticipated to be. Merchandise purchases for July are anticipated to be. Kesler, Inc. The following account balances are available:. Purchases ,