Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Textbook Question
Chapter 6, Problem 1MCQ
Perpetual: Assume that Marvel uses a perpetual FIFO inventory system. What is the dollar value of its ending inventory?
- a. $2,940
- b. $2,685
- c. $2,625
- d. $2,852
- e. $2,705
Expert Solution & Answer
To determine
Find the dollar value of Company M’s ending inventory.
Answer to Problem 1MCQ
Option (a): $2,940.
Explanation of Solution
First-in-First-Out (FIFO): In this method, items purchased initially are sold first. Therefore, the value of the ending inventory contains the recent cost for the remaining unsold items.
Find the dollar value of Company M’s ending inventory:
| Date | Goods Purchased | Cost of Goods Sold | Ending Inventory | |||
| July-01 | beginning balance | 75 units @$25 | $ 1,875 | |||
| July-03 | 348 units @ $27 | $ 9,396 | 75 units @$25 | $ 11,271 | ||
| 348 units @ $27 | ||||||
| July-08 | 75 units @ $25 | $ 7,950 | 123 units @ $27 | $ 3,321 | ||
| 225 units @ $27 | ||||||
| July-15 | 257 units @ $28 | $ 7,196 | 123 units @ $27 | $ 10,517 | ||
| 257 units @ $28 | ||||||
| July-23 | 123 units @ $27 | $ 7,577 | 105 units @ $28 | $ 2,940 | ||
| 152 units @ $28 | ||||||
Table (1)
The above calculation is matching with the option (a) $2,940. Hence, option (a) is the correct answer, options (b) (c) and (d) are incorrect.
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Students have asked these similar questions
What is the correct ending balance of Inventory under the LIFO method given the following information? Beginning
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that the sale occurs after all inventory purchases.
Answer:
X
See the picture for other details. choose the letter of answer
Using perpetual inventory system under Average method, how much is the ending inventory and cost of sales, respectively?
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FIFO and LIFO costs under perpetual inventory system
The following units of an item were available for sale during the year:
DATA
Beginning inventory
Sale
First purchase
Sale
Second purchase
Sale
Ending inventory
Quantity
8,100
5,000
15,400
12,600
15,900
13,100
8,700
REQUIRED:
a. What is the total cost of the ending inventory according to FIFO?
b. What is the total cost of the ending inventory according to LIFO?
a. FIFO method
b. LIFO method
Price
Inventory Cost
Using formulas and cell references from the problem data, perform the required analysis. Formulas entered in the green cells
orange cells. Transfer amounts to CNOWv2 for grading.
$160
$300
$167
Formulas
$300
$172
$300
Chapter 6 Solutions
Principles of Financial Accounting.
Ch. 6 - Perpetual: Assume that Marvel uses a perpetual...Ch. 6 - Perpetual: Assume that Marvel uses a perpetual...Ch. 6 - Perpetual and Periodic: Assume that Marvel uses a...Ch. 6 - Periodic: Assume that Marvel uses a periodic FIFO...Ch. 6 - Prob. 5MCQCh. 6 - A company has cost of goods sold of 85,000 and...Ch. 6 - Describe how costs flow from inventory to cost of...Ch. 6 - Where is the amount of merchandise inventory...Ch. 6 - If costs are declining, will the LIFO or FIFO...Ch. 6 - If inventory errors are said to correct...
Ch. 6 - Prob. 5DQCh. 6 - What is the meaning of market as it is used in...Ch. 6 - What factors contribute to (or cause) inventory...Ch. 6 - When preparing interim financial statements, what...Ch. 6 - Prob. 9DQCh. 6 - Prob. 10DQCh. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Inventory ownership Homestead Crafts, a...Ch. 6 - Prob. 2QSCh. 6 - Computing goods available for sale Wattan Company...Ch. 6 - A company reports the following beginning...Ch. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Assigning costs with FIFO Trey Monson...Ch. 6 - Perpetual: Assigning costs with FIFO P1 Trey...Ch. 6 - Perpetual: Assigning costs with FIFO P1 Trey...Ch. 6 - Perpetual: Assigning costs with FIFO P1 Trey...Ch. 6 - Perpetual: Assigning costs with FIFO P1 Trey...Ch. 6 - Perpetual: Assigning costs with FIFO P1 Trey...Ch. 6 - Perpetual: Assigning costs with FIFO P1 Trey...Ch. 6 - Perpetual: Assigning costs with FIFO P1 Trey...Ch. 6 - Prob. 18QSCh. 6 - Prob. 19QSCh. 6 - Prob. 20QSCh. 6 - Analyzing inventory Endor Company begins the year...Ch. 6 - Prob. 22QSCh. 6 - Prob. 23QSCh. 6 - Prob. 1ECh. 6 - Inventory costs Walberg Associates, antique...Ch. 6 - Perpetual: Inventory costing methods P1 Laker...Ch. 6 - Question: Laker Company reported the following...Ch. 6 - Prob. 5ECh. 6 - Prob. 6ECh. 6 - Perpetual: Inventors- costing methodsFIFO and...Ch. 6 - Question: Refer to the information in Exercise...Ch. 6 - Question: Refer to the information in Exercise 6-7...Ch. 6 - Lower of cost or market Martinez Companys ending...Ch. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Periodic: Cost flow assumptions Lopez Company...Ch. 6 - Periodic: Cost flow assumptions Floras Gifts...Ch. 6 - Prob. 16ECh. 6 - Estimating ending inventorgross profit method On...Ch. 6 - Alternative cost flows Warnerwoods Company uses a...Ch. 6 - Perpetual: Alternative cost flows P1 Warnerwoods...Ch. 6 - Alternative cost flows Montoure Company uses a...Ch. 6 - Perpetual: Alternative cost flows P1 Montoure...Ch. 6 - Prob. 5APCh. 6 - Analysis of inventory errors A2 Navajo Company's...Ch. 6 - Prob. 7APCh. 6 - Periodic: Income comparisons and cost flows A1 P3...Ch. 6 - Prob. 9APCh. 6 - Prob. 10APCh. 6 - Alternative cost flows Ming Company uses a...Ch. 6 - Perpetual: Alternative cost flows P1 Ming Company...Ch. 6 - Perpetual: Alternative cost flows Aloha Company...Ch. 6 - Prob. 4BPCh. 6 - Prob. 5BPCh. 6 - Analysis of inventory errors A2 Hallam Company's...Ch. 6 - Prob. 7BPCh. 6 - Periodic: Income comparisons and cost flows A1 P3...Ch. 6 - Retail inventory method The records of Macklin Co....Ch. 6 - Prob. 10BPCh. 6 - SERIAL PROBLEM Business Solutions P2 A3 This...Ch. 6 - Prob. 1AACh. 6 - Prob. 2AACh. 6 - Prob. 3AACh. 6 - ETHICS CHALLENGE Golf Challenge Corp. is a retail...Ch. 6 - COMMUNICATING IN PRACTICE You are a financial...Ch. 6 - Prob. 3BTNCh. 6 - Prob. 5BTN
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