125.Safeguarding inventory from damage or theft is a primary objective for the control of inventory. If you wererunning a clothing store, name three specific controls you would implement to guard inventory from theft.
126.List three different security measures taken to safeguard inventory.
127.Three identical units of merchandise were purchased during March, as shown:
Steele Plate
Units
Cost
Mar. 3
Purchase
1
$ 830
10
840
19
880
Total
3
$2,550
Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory onMarch 31 using (a) FIFO and (b) LIFO.
128.Three identical units of merchandise were purchased during May, as follows:
Magnesium XP
May3
$130
136
142
$408
Assume that two units are sold on May 23 for $313 total. Determine the gross profit for May and ending inventoryon May 31 using (a) FIFO, (b) LIFO, and (c) average cost methods.
ANSWER:
Gross Profit
Ending Inventory
a.
First-in, first-out (FIFO)
$47 [$313 – ($130 + $136)]
$142
b.
Last-in, first-out (LIFO)
$35 [$313 – ($142 + $136)]
c.
Average cost
$408/3 = $136 average cost$41 [$313 – ($136 × 2 units)]
$136
DIFFICULTY:
Easy
Bloom's: Applying
LEARNING OBJECTIVES:
FNMN.WARD.16.06-02 - LO: 06-02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.17 - Inventories ReportingACCT.AICPA.FN.03
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