Ch 7 in class(1) - 1 Hahn Hardware provides the following information relating to its June inventory activity Hahn uses a perpetual inventory system

Ch 7 in class(1) - 1 Hahn Hardware provides the following...

This preview shows page 1 - 2 out of 2 pages.

1)Hahn Hardware provides the following information relating to its June inventory activity. Hahn uses a perpetual inventory system.DateTransactionsUnitsUnit CostTotal CostJune 1Inventory138.00104.00June 7Purchase229.50209.00June 12Sale20June 18Purchase1010.25102.50June 20Sale14June 26Purchase1611.00176.00June 30Sale15a.Compute the ending inventory and cost of goods sold using the FIFO, LIFO, and moving average costing methods. Round dollar amounts to the nearest penny. b.Calculate the sum of the ending inventory and cost of goods sold for each method. What do you notice about the answer for each method?2)Clayburn Enterprises reported the following information for the current year:Sales 800,000Beginning inventory 25,000Purchases 502,000Gross profit percentage 40%Using the gross profit method, estimate Clayburn's cost of goods sold for the year and the ending inventory at year end. Explain why a company might need to estimate its ending inventory.3)Kay Mart Company is preparing financial statements and provides the following information about several of its major inventory items at year end:ItemQuantity on handUnit CostNRVR251519S602220T343033U501011V135055
If Kay Mart uses the lower-of-cost-or-market rule (LCM), what should it report as the balance of inventory if (1) one market value is computed for all inventories or (2) a market value is computed for each inventory type?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture