Questions and Answers
What is Bramble's correct ending inventory balance at December 31, 2022?
Inventory costing methods place primary reliance on assumptions about the flow of what?
What is the amount allocated to ending inventory on a LIFO basis for Vaughn's inventory data?
What is the ending inventory under FIFO based on Windsor's inventory data?
Signup and view all the answers
Using the specific identification method, what is the cost of goods sold for Marigold?
Signup and view all the answers
In periods of rising prices, what is an advantage of using the LIFO inventory costing method?
Signup and view all the answers
What is the company's after-tax income using LIFO for Ayayai Corp.?
Signup and view all the answers
What is Blue Spruce Corp.'s after-tax income using FIFO?
Signup and view all the answers
What is the cost of goods sold for Concord Corporation for March?
Signup and view all the answers
What is the value of Splish Brothers Inc.'s inventory at May 31, 2022?
Signup and view all the answers
What is the gross profit for Nash's Trading Post, LLC for January using FIFO?
Signup and view all the answers
Study Notes
Inventory Accounting and Management
- Bramble Corp's ending inventory balance on December 31, 2022, is $518,400 after adjusting for items not yet received and consigned goods.
- Various inventory costing methods exist, with costs being the primary focus in accounting practices.
- Vaughn's ending inventory on a LIFO basis is calculated at $19,356 based on periodic inventory data.
- Under FIFO, Windsor's ending inventory shows a value of $488 after counting physical merchandise on hand.
- Marigold's cost of goods sold totals $782 using the specific identification method on its inventory.
Inventory Costing Methods
- LIFO (Last In, First Out) reflects more realistic cost of goods sold in rising price environments, which may result in higher expenses and lower profits.
- Ayayai Corp reports an after-tax income of $1,666 using LIFO, factoring in its inventory transactions and operating expenses.
- Blue Spruce Corp achieves an after-tax income of $3,254.30 using FIFO, calculated by accounting for inventory and sales activities.
Cost of Goods Sold Calculation
- Concord Corporation’s cost of goods sold for March is determined to be $50,160 considering purchases and ending inventory.
- Splish Brothers Inc. values its inventory at $3,240 at the end of May, using an average cost method on its sales.
Profitability Assessment
- Nash's Trading Post LLC calculates a gross profit of $784 for January, derived from sales revenue and cost of goods sold under FIFO.
Key Terminology
- FOB (Free On Board) destination indicates that ownership transfers at the destination, affecting inventory accounting.
- Specific identification method allows tracking of each item sold, providing precise cost assessment.
- Periodic inventory systems review inventory counts at set intervals, impacting financial reporting and decision-making.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
