FIFO and LIFO Costs Under Perpetual Inventory System

The following units of an item were available for sale during the year:

The firm uses the perpetual inventory system, and there are 14 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO?
$

b. What is the total cost of the ending inventory according to LIFO?
$

A story in the Wall Street Journal reveals that “Tall Workers Earn More Money”. Ron, the president of a company, wants to know whether the relationship between salary and height exists in his own company, and obtains the following data from the human resources department.

a. Calculate the correlation between salary and height, and describe the relationship between these two variables.

b. How much of the variability in salary can be accounted for by height?

c. Is there a significant correlation between salary and height?

Blossom Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Blossom showed Cash of $4,500 and Owner’s Capital of $4,500.

Blossom Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

On December 1, 2020, Rodriguez Distributing Company had the following account balances.
Debit Credit
Cash $ 7,200                          Accumulated Depreciation—
Accounts Receivable 4,600                   Equipment $ 2,200
Inventory 12,000                     Accounts Payable 4,500
Supplies 1,200                      Salaries and Wages Payable 1,000
Equipment 22,000                           Owner’s Capital 39,300
$47,000                                                                      $47,000
During December, the company completed the following summary transactions.
Dec. 6. Paid $1,600 for salaries and wages due employees, of which $600 is for December and
$1,000 is for November salaries and wages payable.
8. Received $2,200 cash from customers in payment of account (no discount allowed).
10. Sold merchandise for cash $6,300. The cost of the merchandise sold was $4,100.
13. Purchased merchandise on account from Boehm Co. $9,000, terms 2/10, n/30.
15. Purchased supplies for cash $2,000.
18. Sold merchandise on account $15,000, terms 3/10, n/30. The cost of the merchandise sold
was $10,000.
20. Paid salaries and wages $1,800.
23. Paid Boehm Co. in full, less discount.
27. Received collections in full, less discounts, from customers billed on December 18.
Adjustment data:
1. Accrued salaries and wages payable $840.
2. Depreciation $200 per month.
3. Supplies on hand $1,500.
Instructions
a. Journalize the December transactions using a perpetual inventory system.
b. Enter the December 1 balances in the ledger T-accounts and post the December transactions. Use
Cost of Goods Sold, Depreciation Expense, Salaries and Wages Expense, Sales Revenue, Sales
Discounts, and Supplies Expense.
c. Journalize and post adjusting entries.
d. Prepare an adjusted trial balance.
e. Prepare an income statement and an owner’s equity statement for December and a classifi ed balance
sheet at December 31.

P5-4A Adam Nichols, a former disc golf star, operates Adam’s Discorama. At the beginning of the current season on April 1, the ledger of Adam’s Discorama showed Cash $1,800, Inventory $2,500, and Common Stock $4,300. The following transactions were completed during April.
Apr. 5 Purchased golf discs, bags, and other inventory on account from Rayford Co. $1,200, FOB shipping point, terms 2/10, n/60. 7 Paid freight on the Rayford purchase $50. 9 Received credit from Rayford Co. for merchandise returned $100. 10 Sold merchandise on account for $900, terms n/30. The merchandise sold had a cost of $540. 12 Purchased disc golf shirts and other accessories on account from Galaxy Sportswear $670, terms 1/10, n/30. 14 Paid Rayford Co. in full, less discount. 17 Received credit from Galaxy Sportswear for merchandise returned $70. 20 Made sales on account for $610, terms n/30. The cost of the merchandise sold was $370. 21 Paid Galaxy Sportswear in full, less discount. 27 Granted an allowance to customers for clothing that was fl awed $20. 30 Received payments on account from customers $900. The chart of accounts for the store includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, and No. 505 Cost of Goods Sold. Instructions (a) Journalize the April transactions using a perpetual inventory system. (b) Enter the beginning balances in the ledger accounts and post the April transactions. (Use J1 for the journal reference.) (c) Prepare a trial balance on April 30, 2015.

Adam Nichols, a former disc golf star, operates Concord Corporation. At the beginning of the current season on April 1, the ledger of Concord Corporation showed Cash $2,000, Inventory $2,600, and Common Stock $4,600. The following transactions were completed during April.

The chart of accounts for the store includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, and No. 505 Cost of Goods Sold.

(a)

Journalize the April transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

In a certain county, the sizes of family farms approximately follow mound-shaped (normal) distribution with a mean of 472 acres and a standard deviation of 27 acres.

(a) According to the empirical rule, approximately __% of family farms have a size between 418 and 526 acres.

(b) According to the empirical rule, approximately __% of family farms have a size between 391 and 553 acres.

(c) According to the empirical rule, approximately __% of family farms have a size between 445 and 499 acres.

General guidelines:

Use EXCEL or PHStat to do the necessary computer work.

Do all the necessary analysis and hypothesis test constructions, and explain completely.

Read the textbook Chapter 13. Imagine that you are managing a mobile phone company. You want to construct a simple linear regression model to capture and represent the relationship between the number of customers and the annual sales level for a year with 95% confidence. You had conducted a pilot study for the past fifteen years and collected yearly observations as given in the following data.Where the number of customers in a year is represented by the Profiled Customers variable, measured by million customers unit, and the sales level is represented by the Annual Sales variable, measured by million US-dollars unit.

1) Investigate the agreement between the model and the data set for:

A) LINEARITY.

A1) Construct the "Dot Plot", a.k.a. "Scatter Plot," for this data. Visually inspect for the linear relationship between the number of customers and the sales level. Make comments based on your observations.

A2) Conduct the F-Test for linearity.

A3) If you have seen evidence of linearity in the F-Test, then:

Conduct the t-Test for the partial slope.

Construct the 95% Confidence Interval Estimator for the partial slope.

Thus, make comments about the linear relationship between the Profiled Customers and the Annual Sales, based on the partial slope information.

B) NORMALITY.

Construct the "Normal Probability Plot" for the Annual Sales variable, and make comments about the normality of annual sales level, based on your observations.

C) HOMOSCEDASTICITY.

Construct the "Residual Plot" and make comments about the variance of annual sales level, based on your observations.

D) INDEPENDENCE.

This data set is a Time-Series. Hence, investigate for the independence of observations in this time-series, based on the Durbin-Watson test.

2) If there is evidence of agreement between the model and data, and independence of observations, then construct the simple linear regression equation for this data set, based on the least square error method.

2A) Construct the 95% confidence interval for the actual average annual sales level for all the years that you have 5 million customer in a year,

2B) Construct the 95% prediction interval for the actual annual sales level for one year that you have 5 million customers in that year.

1. A bank teller serves customers one at a time so that each customer has an associated ‘service time,’ or time during which they interact with the teller. We know that the service times are not Normally distributed as some customers have very long service times. However, we do know that service times have a mean of 4 minutes and standard deviation of 1.2 minutes. What is the probability that a sample of 40 bank customers has an average service time of between 3.5 and 4.5 minutes?

The mean volume of customer traffic in a new store is 927 people per week with a standard deviation of 86. Answer the following questions based on these data. Write out what P() would be for each.

a. What is the probability that more than 1,000 customers visit the store in a given week?

b. What is the probability that less than 800 customers visit the store in a given week?

c. What is the probability that between 900 and 1050 customers visit the store in a given week?