119. The following units of a particular item were available for sale during the year:
Beginning inventory
150 units @ $755
Sale
120 units @ $925
First purchase
400 units @ $785
Sale
200 units @ $925
Second purchase
300 units @ $805
Sale
290 units @ $925
The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to FIFO?
120. The following units of a particular item were available for sale during the year:
Beginning inventory
150 units @ $755
Sale
120 units @ $925
First purchase
400 units @ $785
Sale
200 units @ $925
Second purchase
300 units @ $805
Sale
290 units @ $925
The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?
121. The following data were taken from the annual reports of Jong Inc., a manufacturer of fireworks, and Hobson Inc., a manufacturer of computers.
Jong, Inc.
Hobson, Inc.
Cost of Goods Sold
$830,000
$11,540,000
Inventory, end of year
$185,000
315,000
Inventory, beginning of year
$235,000
155,000
(a) Determine the inventory turnover for Jong and Hobson, rounded to two decimal places.(b) Would you expect Jong’s inventory turnover to be higher or lower than Hobson’s? Why?
122. List the internal control objectives illustrated by the following:
(a)
keeping the inventory storeroom locked
(b)
counting the inventory at the end of the accounting period and comparing it with the inventory ledger clerk’s records
(c)
using subsidiary ledgers and a perpetual inventory system
123. The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:
June 1
Balance
25 units at $60
6
Sale
20 units
8
Purchase
20 units at $61
16
Sale
10 units
20
Purchase
20 units at $62
23
Sale
25 units
30
Purchase
15 units at $63
(a)
Determine the cost of the inventory balance at June 30, using (1) the first-in, first-out method and (2) the last-in, first-out method. Identify the quantity, unit price, and total cost of each lot in the inventory.
(b)
Present the journal entry to record a shortage (shrinkage) of $75 discovered by the physical count on June 30.
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