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Unformatted text preview: CHAPTER 5 Inventories and Cost of Goods Sold OVERVIEW OF EXERCISES, PROBLEMS, AND CASES Estimated Time in Learning Outcomes Exercises Minutes Level 1. Identify the forms of inventory held by different types of 1 10 Easy businesses and the types of costs incurred. 2 10 Mod 2. Show that you understand how wholesalers and retailers 3 25 Mod account for sales of merchandise. 4 10 Easy 20* 25 Mod 21* 15 Mod 3. Show that you understand how wholesalers and retailers 5 15 Easy account for cost of goods sold. 6 20 Mod 7 25 Mod 8 20 Mod 9 15 Mod 20* 25 Mod 21* 15 Mod 4. Use the gross profit ratio to analyze a company’s ability to cover its operating expenses and earn a profit. 5. Explain the relationship between the valuation of inventory 10 15 Mod and the measurement of income. 23* 20 Mod 6. Apply the inventory costing methods of specific identification, 11 20 Easy weighted average, FIFO, and LIFO by using a periodic system. 22* 25 Mod 7. Analyze the effects of the different costing methods on 12 15 Mod inventory, net income, income taxes, and cash flow. 22* 25 Mod 24* 40 Mod 8. Analyze the effects of an inventory error on various financial 13 25 Mod statement items. 14 20 Mod 9. Apply the lowerofcostormarket rule to the valuation of 23* 20 Mod inventory. 10. Explain why and how the cost of inventory is estimated in 15 20 Mod certain situations. 51 52 FINANCIAL ACCOUNTING SOLUTIONS MANUAL Estimated Time in Learning Outcomes (Continued) Exercises Minutes Level 11. Analyze the management of inventory. 16 20 Mod 12. Explain the effects that inventory transactions have on the 17 10 Easy statement of cash flows. 18 15 Mod 19 15 Mod 13. Explain the differences in the accounting for periodic and 24* 40 Mod perpetual inventory systems and apply the inventory costing methods using a perpetual system (Appendix). *Exercise, problem, or case covers two or more learning outcomes Level = Difficulty levels: Easy; Moderate (Mod); Difficult (Diff) CHAPTER 5 • INVENTORIES AND COST OF GOODS SOLD 53 Problems Estimated and Time in Learning Outcomes Alternates Minutes Level 1. Identify the forms of inventory held by different types of 1 25 Mod businesses and the types of costs incurred. 15* 20 Mod 2. Show that you understand how wholesalers and retailers 8* 45 Mod account for sales of merchandise. 9* 40 Mod 10* 40 Mod 3. Show that you understand how wholesalers and retailers 8* 45 Mod account for cost of goods sold. 9* 40 Mod 10* 40 Mod 4. Use the gross profit ratio to analyze a company’s ability to cover its operating expenses and earn a profit. 2 25 Mod 9* 40 Mod 5. Explain the relationship between the valuation of inventory 11* 45 Mod and the measurement of income. 12* 60 Diff 13* 30 Mod 14* 30 Mod 6. Apply the inventory costing methods of specific identification, 11* 45 Mod weighted average, FIFO, and LIFO by using a periodic system. 13* 30 Mod 14* 30 Mod 7. Analyze the effects of the different costing methods on 3 20 Mod inventory, net income, income taxes, and cash flow.inventory, net income, income taxes, and cash flow....
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 Spring '07
 Largay
 Financial Accounting, Balance Sheet, FIFO and LIFO accounting

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