Exam 9: Inventories: Additional Valuation Issues

Use the following information for questions 114 through 118. The following data concerning the retail inventory method are taken from the financial records of Welch Company. -The ending inventory at retail should be

Use the following information for questions 125 through 129. Plank Co. uses the retail inventory method. The following information is available for the current year. -The ending inventory at retail should be

Similar to U.S. GAAP, certain agricultural products and mineral products can be reported at net realizable value using IFRS.

At the end of the fiscal year, Apha Airlines has an outstanding non-cancellable purchase commitment for the purchase of 1 million gallons of jet fuel at a price of $4.10 per gallon for delivery during the coming summer. The company prices its inventory at the lower of cost or market. If the market price for jet fuel at the end of the year is $4.50, how would this situation be reflected in the annual financial statements?

LIFO retail inventory method, stable prices. Potter Variety Store uses the LIFO retail inventory method. Information relating to the computation of the inventory at December 31, 2014, follows: Instructions Assuming that there was no change in the price index during the year, compute the inventory at December 31, 2014, using the LIFO retail inventory method.

When the cost-of-goods-sold method is used to record inventory at market

Barker Pet supply uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $531,200 ($653,800), purchases during the current year at cost (retail) were $2,137,200 ($2,772,200), freight-in on these purchases totaled $127,800, sales during the current year totaled $2,704,000, and net markups (markdowns) were $4,000 ($192,600). What is the ending inventory value at cost?

Retail inventory method. The records of Lohse Stores included the following data:Inventory, May 1, at retail, $14,500; at cost, $10,440Purchases during May, at retail, $42,900; at cost, $31,550Freight-in, $2,000; purchase discounts, $250Additional markups, $3,800; markup cancellations, $400; net markdowns, $1,300Sales during May, $47,500 Instructions Calculate the estimated inventory at May 31 on a LIFO basis. Show your calculations in good form and label all amounts.

Rodriguez Corporation sells its product, a rare metal, in a controlled market with a quoted price applicable to all quantities. The total cost of 5,000 pounds of the metal now held in inventory is $210,000. The total selling price is $560,000, and estimated costs of disposal are $10,000. At what amount should the inventory of 5,000 pounds be reported in the balance sheet?

Assume that Darcy Industries had the following inventory values:Inventory cost (on December 31, 2014) = $500Inventory market (on December 31, 2014) = $450Inventory net realizable value (on December 31, 2014) = $440Inventory market (on June 30, 2015) = $520Inventory net realizable value (on June 30, 2015) = $525Under IFRS, what is the inventory carrying value on December 31, 2014?

For 2014, cost of goods available for sale for Tate Corporation was $2,700,000. The gross profit rate on sales was 20%. Sales for the year were $2,400,000. What was the amount of the ending inventory?

At a lump-sum cost of $72,000, Pratt Company recently purchased the following items for resale: The appropriate cost per unit of inventory is:

East Corporation's computation of cost of goods sold is: The average days to sell inventory for East are

When using dollar-value LIFO, if the incremental layer was added last year, it should be multiplied by

What is the rationale behind the ceiling when applying the lower-of-cost-or-market method to inventory?

An item of inventory purchased this period for $15.00 has been incorrectly written down to its current replacement cost of $10.00. It sells during the following period for $30.00, its normal selling price, with disposal costs of $3.00 and normal profit of $12.00. Which of the following statements is not true?

The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the

Lower-of-cost-or-market. The December 31, 2014 inventory of Gwynn Company consisted of four products, for which certain information is provided below. Instructions Using the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2014.

Robertson Corporation acquired two inventory items at a lump-sum cost of $90,000. The acquisition included 3,000 units of product CF, and 7,000 units of product 3B. CF normally sells for $27 per unit, and 3B for $9 per unit. If Robertson sells 1,000 units of CF, what amount of gross profit should it recognize?

Alonzo Company in Italy prepares its financial statements in accordance with IFRS. In 2014, it reported cost of goods sold of €600 million and average inventory of €100 million. What is Alonzo's inventory turnover ratio?