90) State some guidelines a company's management could use to determine the most desirable inventory costing method.
91) Key West Group Ltd.
Inventory Information
For January 2010
Numbers of unitsPrice paid per unit
Purchase January 1st500$50
Purchase January 15th1000$60
Purchase January 25th2000$70
*** There were no units on hand at the beginning of January 2010. On January 31st, 2010, Key West Group sold 1500 units of inventory at $100 each to customers.
Calculate cost of goods sold using FIFO.
92) Inventory data for Freezer Burn Corporation for the year ended December 31, 2010, are as follows:
Beginning inventory50 units at $150 each
March 31 purchase50 units at $155 each
1st quarter sales60 units
June 30 purchase55 units at $160 each
2nd quarter sales70 units
September 30 purchase60 units at $170 each
Compute the perpetual ending inventory balance on December 31, 2010, using:
a.FIFO
b.Weighted-average
93) Inventory data for Hot Buys Company for January 2011 are as follows:
January 1 balance80 units at $25
January 10 purchase100 units at $28
January 15 sale120 units
January 21 purchase90 units at $32
January 28 sale110 units
Using FIFO, compute ending inventory as of January 31, 2011, and determine cost of goods sold for January.
94) West Life Group Ltd.
Inventory Information
For January 2010
Numbers of unitsPrice paid per unit
Purchase January 1st500$50
Purchase January 15th1000$60
Purchase January 25th2000$70
*** There were no units on hand at the beginning of January 2010. On January 31st, 2010, West Life Group sold 1500 units of inventory at $100 each to customers.
Calculate cost of goods sold using the weighted average method.
95) The following information is available for Digital Image Corporation for the year ended December 31, 2010:
Sales revenue$600,000
Beginning inventory (at cost)200,000
Net purchases250,000
Ending inventory:
Historical cost170,000
Net realizable value 155,000
a.Compute gross margin as it would appear on the income statement valuing ending inventory at historical cost.
b.Compute gross margin as it would appear on the income statement valuing ending inventory at lower-of-cost-or-net-realizable-value.