please answe step by step for inventory record
ou work for a CPA firm that has been hired by Widget Tek Inc., a merchandising company that is getting ready to expand. The president of Widget Tek Inc. is concerned with obtaining a loan for the expansion and wants to be sure that all the financial statements accurately reflect the company’s accounting records.
As preparation for this assignment, you have been asked to review the effects of changing prices on three inventory costing methods: LIFO, FIFO, and weighted average.
Identify the scenarios and inventory methods that result in the highest and lowest values for each item listed. Enter “Highest”, “Lowest”, or leave the box blank.
| Cost of Goods Sold | Ending Inventory | Net Income | |
|---|---|---|---|
| Weighted average, when prices are rising | |||
| FIFO, when prices are rising | |||
| LIFO, when prices are falling | |||
| LIFO, when prices are rising | |||
| Weighted average, when prices are falling | |||
| FIFO, when prices are falling |
Inventory Records
Widget Tek Inc.’s original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Tek Inc.’s main product for March.
| Date |
Inventory |
||
|---|---|---|---|
| Quantity | Unit Cost | Total Cost | |
| Mar. 1 | 850 | $98.00 | $83,300 |
| 1,275 | $95.00 | $121,125 | |
| Mar. 8 | 650 | $98.00 | $63,700 |
| Mar. 11 | 325 | $98.00 | $31,850 |
| Mar. 14 | 325 | $98.00 | $31,850 |
| 780 | $103.00 | $80,340 | |
| Mar. 22 | 260 | $98.00 | $25,480 |
| Mar. 25 | 260 | $98.00 | $25,480 |
| 1,600 | $99.00 | $158,400 | |
Study the inventory record for March and answer the questions that follow.
| 1. | Assuming that the product sells for $165 and that 70% of sales are on account, determine the gross profit from sales for March. |
| 2. | Making the same assumptions as in (1), determine the ending inventory cost for March. |
| 3. | Which inventory method is being used? |
Final Questions
In conversation with the president of Widget Tek Inc., you have learned that much of the company’s inventory consists of older Widget Tek Inc. models. These older models sell for less than the newer Widget Tek Inc. models, but customers strongly prefer the newer models. The company believes that the net realizable value of the older inventory is less than its value in the subsidiary inventory ledger.
Considering all of the information you have about Widget Tek Inc., answer the following questions.
| 1. | To better account for the older inventory, the president of Widget Tek Inc. wonders whether the inventory should be valued using a different method. Do you agree, and why or why not? because will . |
| 2. | Will a change in inventory method increase a company’s net income on its financial statements? |
| 3. | When is inventory not valued at cost? |
In: Accounting
Mastery Problem: Inventories
Changing Prices
You work for a CPA firm that has been hired by Widget Tek Inc., a merchandising company that is getting ready to expand. The president of Widget Tek Inc. is concerned with obtaining a loan for the expansion and wants to be sure that all the financial statements accurately reflect the company’s accounting records.
As preparation for this assignment, you have been asked to review the effects of changing prices on three inventory costing methods: LIFO, FIFO, and weighted average.
Identify the scenarios and inventory methods that result in the highest and lowest values for each item listed. Enter “Highest”, “Lowest”. if not affected select "No effect".
| Cost of Goods Sold | Ending Inventory | Net Income | ||||
| LIFO, when prices are rising | Highest, Lowest, or no effect | H, L, or NO | H,L, or NO | |||
| FIFO, when prices are falling | ^ | ^ | ^ | |||
| Weighted average, when prices are rising | ^ | ^ | ^ | |||
| LIFO, when prices are falling | ^ | ^ | ^ | |||
| FIFO, when prices are rising | ^ | ^ | ^ | |||
| Weighted average, when prices are falling | ^ | ^ | ^ |
Inventory Records
Widget Tek Inc.’s original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Tek Inc.’s main product for March.
| Inventory | |||||||||
| Date | Quantity | Unit Cost | Total Cost | ||||||
| Mar. 1 | 850 | $98 | $83,300 | ||||||
| 1,275 | $95 | $121,125 | |||||||
| Mar. 8 | 650 | $98 | $63,700 | ||||||
| Mar. 11 | 325 | $98 | $31,850 | ||||||
| Mar. 14 | 325 | $98 | $31,850 | ||||||
| 780 | $103 | $80,340 | |||||||
| Mar. 22 | 260 | $98 | $25,480 | ||||||
| Mar. 25 | 260 | $98 | $25,480 | ||||||
| 1,600 | $99 | $158,400 | |||||||
Study the inventory record for March and answer the questions that follow.
1. Assuming that the product sells for $165 and that 90% of sales are on account, determine the gross profit from sales for March. $
2. Making the same assumptions as in (1), determine the ending inventory cost for March. $
3. Which inventory method is being used?
Final Questions
In conversation with the president of Widget Tek Inc., you have learned that much of the company’s inventory consists of older Widget Tek Inc. models. These older models sell for less than the newer Widget Tek Inc. models, but customers strongly prefer the newer models. The company believes that the net realizable value of the older inventory is less than its value in the subsidiary inventory ledger.
Considering all of the information you have about Widget Tek Inc., answer the following questions.
1. To better account for the older inventory,
the president of Widget Tek Inc. wonders whether the inventory
should be valued using a different method. Do you agree, and why or
why not?
________because______ will ______
2. Will a change in inventory method increase a
company’s net income on its financial statements?
.
3. When is inventory not valued at cost?
In: Accounting
Consider the following: 1. Banks that lend money to customers,2. Consumers use credit cards for purchases,3.retired people on fixed incomes,4. college students taking out student loans
In the reading it argues that inflation redistributes income,that is not neccessarily fair or equitable Some people and companies are more vulnerable than others. Some people and companies can adjust income to combat higher prices and redistribution.
1.List the four above from least to most vulnerable.
2. In paragraphs 1-4 explain why you ranked them in this order,and how they can adjust spending and income?
3. Paragraph 5, explain why you selected the ranking you did?
In: Economics
Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows:
Jan. 1 Inventory 30 units at $128
Mar. 10 Purchase 50 units at $138
Aug. 30 Purchase 20 units at $144
Dec. 12 Purchase 100 units at $148
There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of goods sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.
Cost of Ending Inventory and Cost of Goods Sold
| (FIFO) | Ending Inventory is ? | Cost of Goods Sold ? | |
| Last-in, first-out (LIFO) | Ending Inventory is ? | Cost of Goods Sold ? | |
| Weighted average cost | Ending Inventory is ? | Cost of Goods Sold ? |
In: Accounting
As fishes evolved in to amniotes, fertilzation:
|
evolved from external to internal |
||
|
remained internal |
||
|
evolved from internal to external |
||
|
remained external |
1 points
QUESTIO14
Calcified teeth originated in the first:
|
vertebrates |
||
|
gnathostomes |
||
|
chordates |
||
|
animals |
1 points
QUESTION13
When fossil evidence is taken to account, a bony skeleton appeared first in the:
|
first osteichthyans |
||
|
first gnathostomes |
||
|
first chordates |
||
|
first vertebrates |
1 points
QUESTION 22
In most amniotes, the main site of gas exchange is the:
|
pharynx |
||
|
skin |
||
|
lungs |
In: Anatomy and Physiology
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 213,000 Purchases of raw materials $ 268,000 Direct labor ? Administrative expenses $ 151,000 Manufacturing overhead applied to work in process $ 371,000 Actual manufacturing overhead cost $ 356,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 55,000 $ 35,000 Work in process ? $ 23,000 Finished goods $ 35,000 ? The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $669,000; and the net operating income was $34,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
In: Accounting
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
| Selling expenses | $ | 218,000 |
| Purchases of raw materials | $ | 270,000 |
| Direct labor | ? | |
| Administrative expenses | $ | 155,000 |
| Manufacturing overhead applied to work in process | $ | 369,000 |
| Actual manufacturing overhead cost | $ | 354,000 |
Inventory balances at the beginning and end of the year were as follows:
| Beginning of Year | End of Year | |||||
| Raw materials | $ | 58,000 | $ | 40,000 | ||
| Work in process | ? | $ | 30,000 | |||
| Finished goods | $ | 35,000 | ? | |||
The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $33,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.
Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
In: Accounting
In: Accounting
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
| Selling expenses | $ | 217,000 |
| Purchases of raw materials | $ | 269,000 |
| Direct labor | ? | |
| Administrative expenses | $ | 160,000 |
| Manufacturing overhead applied to work in process | $ | 369,000 |
| Actual manufacturing overhead cost | $ | 353,000 |
Inventory balances at the beginning and end of the year were as follows:
| Beginning of Year | End of Year | |||||
| Raw materials | $ | 57,000 | $ | 35,000 | ||
| Work in process | ? | $ | 30,000 | |||
| Finished goods | $ | 34,000 | ? | |||
The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $745,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $36,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.
Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
rev: 1
In: Accounting
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
| Selling expenses | $ | 212,000 |
| Purchases of raw materials | $ | 265,000 |
| Direct labor | ? | |
| Administrative expenses | $ | 159,000 |
| Manufacturing overhead applied to work in process | $ | 370,000 |
| Actual manufacturing overhead cost | $ | 359,000 |
Inventory balances at the beginning and end of the year were as follows:
| Beginning of Year | End of Year | |||||
| Raw materials | $ | 54,000 | $ | 37,000 | ||
| Work in process | ? | $ | 26,000 | |||
| Finished goods | $ | 35,000 | ? | |||
The total manufacturing costs for the year were $685,000; the cost of goods available for sale totaled $750,000; the unadjusted cost of goods sold totaled $663,000; and the net operating income was $37,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.
Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
In: Accounting