EXTRA CREDIT ACC.docx - Evan Pergeau P1 Gray Company uses the periodic inventory system to account for inventories Information related to Gray Company's

# EXTRA CREDIT ACC.docx - Evan Pergeau P1 Gray Company uses...

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Evan Pergeau P1. Gray Company uses the periodic inventory system to account for inventories. Information related to Gray Company's inventory at October 31 is given below: October 1 Beginning inventory 400 units @ \$9.80 = \$ 3,920 8 Purchase 800 units @ \$10.40 = 8,320 16 Purchase 600 units @ \$10.80 = 6,480 24 Purchase 200 units @ \$11.80 = 2,360 Total units and cost 2,000 units \$21,080 Instructions 1. Show computations to value the ending inventory using the FIFO cost assumption if 550 units remain on hand at October 31. Ending inventory = 550 200 x 11.80 = 2360 350 x 10.80 = 3780 550 6140 2. Show computations to value the ending inventory using the weighted-average cost method if 550 units remain on hand at October 31. Average Cost = 21,808 / 2000= 10.54 550 x 10.54 = 5797 3. Show computations to value the ending inventory using the LIFO cost assumption if 550 units remain on hand at October 31. 400 x 9.80 = 3920 150 x 10.40 = 1560 550 5480
P2. Compute the lower-of-cost-or-market valuation for Gantner Company's total inventory based on the following: Inventory Categories Cost Data Market Data A \$18,000 \$16,900 B 13,900 14,600 C 21,000 20,500 lower-of-cost-or-market valuation = 16,900 + 13,900 + 20,500 = \$51,300
P3. Molina Company had a \$700 credit balance in Allowance for Doubtful Accounts at

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