inventories additional valuation issues
Part 1
Sweet Company follows the practice of pricing its inventory at LCNRV, on an individual-item basis.
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Item No. |
Quantity |
Cost per Unit |
Estimated Selling Price |
Cost to Complete and Sell |
||||
|
1320 |
1,800 |
$3.65 |
$5.13 |
$1.82 |
||||
|
1333 |
1,500 |
3.08 |
3.88 |
1.14 |
||||
|
1426 |
1,400 |
5.13 |
5.70 |
1.60 |
||||
|
1437 |
1,600 |
4.10 |
3.65 |
1.54 |
||||
|
1510 |
1,300 |
2.57 |
3.71 |
1.60 |
||||
|
1522 |
1,100 |
3.42 |
4.45 |
0.91 |
||||
|
1573 |
3,600 |
2.05 |
2.85 |
1.37 |
||||
|
1626 |
1,600 |
5.36 |
6.84 |
1.71 |
From the information above, determine the amount of Sweet Company inventory.
|
The amount of Sweet Company’s inventory. =$______ |
Part 2
Marin Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.
|
Item No. |
Quantity |
Cost per Unit |
Cost to Replace |
Estimated Selling Price |
Cost of Completion and Disposal |
Normal Profit |
||||||||||||
|
1320 |
1,500 |
$3.87 |
$3.63 |
$5.45 |
$0.42 |
$1.51 |
||||||||||||
|
1333 |
1,200 |
3.27 |
2.78 |
4.24 |
0.61 |
0.61 |
||||||||||||
|
1426 |
1,100 |
5.45 |
4.48 |
6.05 |
0.48 |
1.21 |
||||||||||||
|
1437 |
1,300 |
4.36 |
3.75 |
3.87 |
0.30 |
1.09 |
||||||||||||
|
1510 |
1,000 |
2.72 |
2.42 |
3.93 |
0.97 |
0.73 |
||||||||||||
|
1522 |
800 |
3.63 |
3.27 |
4.60 |
0.48 |
0.61 |
||||||||||||
|
1573 |
3,300 |
2.18 |
1.94 |
3.03 |
0.91 |
0.61 |
||||||||||||
|
1626 |
1,300 |
5.69 |
6.29 |
7.26 |
0.61 |
1.21 |
||||||||||||
From the information above, determine the amount of Marin Company inventory.
|
The amount of Marin Company’s inventory. $______ |
Part 3
Sunland Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.
|
Inventory, May 1 |
$ 147,800 |
|
|
Purchases (gross) |
637,400 |
|
|
Freight-in |
31,000 |
|
|
Sales revenue |
953,600 |
|
|
Sales returns |
72,200 |
|
|
Purchase discounts |
11,900 |
1. Compute the estimated inventory at May 31, assuming that the gross profit is 20% of net sales.
|
The estimated inventory at May 31 |
=$_____
2. Compute the estimated inventory at May 31, assuming that the gross profit is 20% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.)
|
The estimated inventory at May 31 |
=$___
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