96) Roughrider Ltd. (Roughrider) uses the lower of cost and net realizable value rule to value its football equipment inventory. Roughrider defines market as net realizable value. Roughrider's inventory on January 31, 2011 had a cost of $1,200,000 and an NRV of $1,125,000.
Required:
a.By how much should Roughrider's inventory be written down?
b.Prepare the journal entry that Roughrider should prepare to record the write-down.
c.What amount should be reported for inventory on Roughrider's January 31, 2011 balance sheet?
97) The Key West Group uses the lower of cost and net realizable value rule to value its kayak inventory. The Kayaks in inventory were purchased on January 1, 2009 for $12,000. At year end December 31, 2009 the net realizable value of Key West's inventory dropped to $9,000. At the end of 2010 due to a shortage of Kayaks this inventory increased in value to $15,000.
Required:
Prepare the required journal entries (if any) required at the 2009 and 2010 year end.
98) You are provided with the following information about the bookstore at your university:
Cost of sales for the year ended June 30, 2011$ 510,000
Inventory balance on June 30, 2010125,000
Inventory balance on June 30, 2011165,000
Required:
a.Calculate the inventory turnover ratio for the year ended June 30, 2011.
b.What is the average length of time that it took to sell its inventory in 2011?
c.Is the inventory turnover ratio satisfactory? What would you need to know to fully answer this question?
99) In 2010, Norwood Limited had sales and cost of sales of $250,000 and $62,500 respectively. The company had shareholders equity of $100,000 and its assets were $125,000. The company's gross margin for 2010 was:
100) Calculate inventory turnover for the following independent situations.
a.Ending inventory$25,000
Purchases during the year127,000
Beginning inventory30,000
b.Purchases during the year$350,000
Beginning inventory50,000
Ending inventory42,500
c.Beginning inventory $37,500
Ending inventory 42,000
Purchases during the year270,000
d.Purchases during the year$335,700
Ending inventory32,000
Beginning inventory27,000