Acc 422 Week 3 Wileyplus Assignment Exercises

ACC 422 WEEK 3 WILEYPLUS ASSIGNMENT EXERCISES

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ACC 422 Week 3 WileyPlus Assignment Exercises,

E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2011,consistsofthe following items.

Part No. Quantity Cost per Unit Cost to Replace per Unit

110 600 $95 $100

111 1,000 60 52

112 500 80 76

113 200 170 180

120 400 205 208

121a 1,600 16 14

122 300 240 235

aPart No. 121 is obsolete and has a realizable value of $0.50 each as scrap.

Instructions

(a) Determine the inventory as of December 31, 2011, by the lower-of-cost-or-market method, applying

this method directly to each item.

(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the

total of the inventory.

E9-12 (Gross Profit Method) Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.

Inventory, May 1 $ 160,000

Purchases (gross) 640,000

Freight-in 30,000

Sales 1,000,000

Sales returns 70,000

Purchase discounts 12,000

Instructions

(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.

(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.

E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2011,consistsofthe following items.

Part No. Quantity Cost per Unit Cost to Replace per Unit

110 600 $95 $100

111 1,000 60 52

112 500 80 76

113 200 170 180

120 400 205 208

121a 1,600 16 14

122 300 240 235

aPart No. 121 is obsolete and has a realizable value of $0.50 each as scrap.

Instructions

(a) Determine the inventory as of December 31, 2011, by the lower-of-cost-or-market method, applying

this method directly to each item.

(b) Determine the inventory by...