1. (2 points) Shanlever Company’s physical inventory as of 12-31-16 showed merchandise with a cost of $570,000. Shanlever
excluded the following items from the $570,000: Merchandise costing $25,000 shipped by a vendor f.o.b. shipping point on 12-29-16 and received by Shanlever 01-0417. Merchandise costing $15,000 that Shanlever was holding on consignment for DeZoort Company. Merchandise costing $42,000 shipped by Shanlever to a customer f.o.b. destination on 12-30-16 and received by the
customer 01-10-17. Merchandise costing $33,000 shipped by a vendor f.o.b. destination on 12-27-16 and received by Shanlever 01-05-17.
Based on the above information, calculate the amount of inventory that should appear on Shanlever’s balance sheet as of 12-3116.
2. (3 points) During June, the following changes in an inventory item took place:
June 1
Balance
300 units @ $2
9
Purchased
480 units @ $3
20
Purchased
174 units @ $4
29
Purchased
121 units @ $5
8
Sold
195 units @ $10
10
Sold
500 units @ $10
21
Sold
80 units @ $10
26
Sold
65 units @ $10 Assume the company maintains periodic inventory records. What is the cost of the ending inventory under the following
methods?
(a) FIFO
(b) LIFO
(c) Weighted-average (if necessary, round the unit cost to the nearest penny)
3. (5 points) The following pertain to the cost of H’s only inventory item:
Inventory on hand, January 1
0 units
Purchases, January 2
900 units @ $95 per unit
Purchases, January 12
750 units @ $96 per unit
Purchases, January 18
400 units @ $98 per unit
Purchases, January 20
300 units @ $100 per unit
Purchases, January 26
600 units @ $99 per unit
2,950
Sales, January 5
400 units @ $200 per unit
Sales, January 11
100 units @ $200 per unit
Sales, January 13
600 units @ $200 per unit
Sales, January 17
350 units @ $200 per unit
Sales, January 22
450 units @ $200 per unit
Sales, January 25
300 units @ $200 per unit
Sales, January 30
250 units @ $200 per unit
2,450
(2,450 x $200 = $490,000) Calculate COGS AND GP for January AND EI as of 01-31 under the following assumptions: H uses perpetual LIFO
EI:
COGS:
Gross profit: H uses periodic LIFO
EI:
COGS:
Gross profit: H uses a weighted average method and rounds the unit cost to the nearest penny.
EI:
COGS:
Gross profit: 4. (3 points) During June, the following changes in an inventory item took place:
June 1
Balance
200 units @ $15
9
Purchased
350 units @ $16
25
Purchased
400 units @ $17
10
Sold
200 units @ $40
21
Sold
100 units @ $40
26
Sold
350 units @ $40
Assume the company maintains perpetual inventory records. What is the cost of the ending inventory under the following
methods?
(a) LIFO
(b) Moving-average (if necessary, round the unit cost to the nearest penny)
5.
(9 points) Irene uses a calendar-year accounting period and a periodic inventory system. Assume Irene had the
following independent situations: Situation 1. Goods shipped to Irene by a vendor f.o.b. destination on 12-28-11 were in transit at 12-31-11. The goods cost
$12,000. On 12-28-11, Irene recorded a credit purchase of $12,000. Situation 2. Goods shipped to Irene by a vendor f.o.b. shipping point on 12-28-11 were in transit at 12-31-11. The goods
cost $18,000. On 01-04-12, the day the goods arrived, Irene recorded a credit purchase of $18,000. Situation 3. Goods shipped to Irene by a vendor f.o.b. shipping point on 12-29-11 were in transit at 12-31-11. The goods
cost $25,000. On 12-30-11, Irene recorded a credit purchase of $25,000. Situation 4. On 12-31-11, Irene was in possession of $25,000 of goods that she was holding on a consignment basis. Irene
received these goods on 12-29-11. Upon receipt of these goods, Irene did not record any type of journal entry. Situation 5. Goods shipped by Irene to a customer f.o.b. destination on 12-30-11 were in transit at 12-31-11. The goods cost
$15,000. On 12-30-11, Irene billed the customer and recorded a credit sale of $35,000. Situation 6. Goods shipped by Irene to a customer f.o.b. shipping point on 12-29-11 were in transit at 12-31-11. The goods
cost $20,000. On 12-29-11, Irene billed the customer and recorded a credit sale of $45,000. The customer received the goods
on 01-04-12.
Assume Irene values the inventory reported on its balance sheet and the amount recorded as cost of goods sold on its income
statement on the basis of its physical inventory count that Irene performed on 12-31-11. Irene counts whatever is on its premises.
Individually discuss the effect (in dollars and direction, e.g., overstate, understate, no effect) that each of the above items has on: Irene’s sales revenue for the year ended 12-31-11 Irene’s cost of goods sold for the year ended 12-31-11 Irene’s accounts receivable as of 12-31-11 Irene’s inventory as of 12-31-11 Irene’s accounts payable as of 12-31-11 Irene’s stockholders’ equity as of 12-31-11
Situation
#
1
2
3
4
5
6 I’s sales for year
ended 12-31-11 I’s COGS for
year ended
12-31-11 I’s AR as of
12-31-11 I’s inventory as
of 12-31-11 I’s AP as of
12-31-11 Remember, each box above should have BOTH an effect AND a $ amount. I’s SE as of
12-31-11

 

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