2017 ending inventory valued at year end costs was

This preview shows page 9 - 13 out of 13 pages.

2017 ending inventory, valued at year-end costs, was $156,600 and that the relative costindex for this inventory in 2016 was 1.16.Suppose that Badger's 2018 ending inventory, valued at year-end costs, was $153,400 andthat the relative cost index for this inventory in 2018 was 1.18. What inventory balancewould Badger report on its 12/31/18 balance sheet?$130,000$131,964$153,400None of these answer choices is correct.$153,400 ÷ 1.18 = $130,000. This includes the first two layers, the first at $113,000 and thesecond at $12,600, plus another at $4,400 from 2017. No additional layers are added in 2018because the inventory in base year terms actually decreased in 2018. To get the 12/31/18balance, the three layers are multiplied by their relative price indexes of 1.00, 1.10, and 1.16,respectively.
14.Award: 5.89 out of 5.89 pointsCinnamon Buns Co. (CBC) started 2016 with $52,600 of merchandise on hand. During 2016, $297,000 in merchandise was purchased on account with credit terms of 2/10 n/30. Alldiscounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $10,100. Merchandise with an invoice amount of $2,200 was returned for credit. Cost of goods sold for the year was $310,000. CBC uses a perpetual inventory system.
What is cost of goods available for sale, assuming CBC uses the gross method?
15.Award: 0 out of 5.89 pointsNu Company reported the following pretax data for its first year of operations.Net sales2,930 Cost of goods available for sale2,310 Operating expenses800
Effective tax rate30% Ending inventories:If LIFO is elected830 If FIFO is elected1,180 What is Nu's net income if it elects FIFO?
16.Award: 0 out of 5.89 points
Northwest Fur Co. started 2016 with $113,000 of merchandise inventory on hand. During 2016, $550,000 in merchandise was purchased on account with credit terms of 2/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $9,200. Merchandise with an invoice amount of $3,900 was returned for credit. Cost of goods sold for the year was $366,000. Northwest uses a perpetual inventory system.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture