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Chapter 8: Q6BE (page 422)
Question:Data for Amsterdam Company are presented in BE8-4. Compute the April 30 inventory and the April cost of goods sold using the LIFO method.
The ending inventory on April 30 was $4,800 and the cost of goods sold amounts to$7,050.
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Trout Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes. At January 1, 2017, the LIFO reserve has a credit balance of \(1,300,000. At December 31, 2017, Trout鈥檚 internal reports indicatedthat the FIFO inventory balance was \)2,900,000 and for external reporting purposes the LIFO inventory balance was $1,500,000.What is the amount of the LIFO reserve and the LIFO effect related to 2017? What is the journal entry needed to record the LIFOeffect at December 31, 2017?
Question:Data for Amsterdam Company are presented in BE8-4. Compute the April 30 inventory and the April cost of
goods sold using the FIFO method.
John Adams Company鈥檚 record of transactions for the month of April was as follows.
Purchases Sales
April 1 (balance on hand) 600 @ \( 6.00 April 3 500 @ \)10.00
4 1,500 @ 6.08 9 1,400 @ 10.00
8 800 @ 6.40 11 600 @ 11.00
13 1,200 @ 6.50 23 1,200 @ 11.00
21 700 @ 6.60 27 900 @ 12.00
29 500 @ 6.79 4,600
5,300
Instructions
(a) Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using (1) LIFO and(2) average-cost.
(b) Assuming that perpetual inventory records are kept in dollars, determine the inventory using (1) FIFO and (2) LIFO.
(c) Compute the cost of goods sold assuming periodic inventory procedures and inventory priced at FIFO.
(d) In an inflationary period, which inventory method鈥擣IFO, LIFO, average cost鈥攚ill show the highest net income?
Distinguish between product costs and period costs as they relate to inventory.
The following information relates to the Jimmy Johnson Company.
Ending Inventory Price
Date (End-of-Year Prices) Index
December 31, 2013 $ 70,000 100
December 31, 2014 90,300 105
December 31, 2015 95,120 116
December 31, 2016 105,600 120
December 31, 2017 100,000 125
Instructions
Use the dollar-value LIFO method to compute the ending inventory for Johnson Company for 2013 through 2017.
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