Feb28th Quest

Feb28th Quest - and Ending Inventory for both 2005 and 2006...

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MGMT 200 Supplemental Instruction (SI) Feb 28 th 2011 Inventory Accounting Nomura Imports was formed in late 2002 to sell a single product, the Yahsuki, which is imported from Japan. Due to unfavorable exchange rates the cost of this product more than doubled during 2005 and 2006. Sales for 2006 (2005) totaled $2,109,375 or 67,500 units ($1,417,500 or 54,000 units). Nomura uses a periodic inventory system and provides the following information about cost of goods purchased during the last two years: Opening Inventory (12/31/04) 9,000 units @ $8.00 $72,000 Purchase, April 16, 2005 27,000 units @ $9.00 $243,000 Purchase, July 28, 2005 30,000 units @ $11.50 $345,000 Purchase, March 23, 2006 36,000 units @ $14.00 $504,000 Purchase, September 3, 2006 42,000 units @ $17.50 $735,000 A physical inventory count at year-end, December 31, 2006 (2005) reveals 22,500 (12,000) units still on hand. a. Compute Cost of Goods Sold
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Unformatted text preview: and Ending Inventory for both 2005 and 2006 for Nomura Imports for each of the three inventory methods: Weighted average (WAVE), FIFO, and LIFO. WAVE FIFO LIFO Cost of goods sold, 2005 __________ __________ __________ Inventory, December 31, 2005 __________ __________ __________ Cost of goods sold, 2006 __________ __________ __________ Inventory, December 31, 2006 __________ __________ __________ Supporting calculations for a.: b. Assume Nomura Imports uses the LIFO method. What is the LIFO reserve as at December 31, 2006? c. How much could Nomura Imports have saved in taxes in 2005 using the LIFO versus the FIFO method? d. Assume Nomura Imports elects to use the FIFO method. Calculate Nomura Imports inventory turnover ratio and number of days-sales-in-inventory for 2006. Please sign the attendance sheet before you leave!...
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Feb28th Quest - and Ending Inventory for both 2005 and 2006...

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