ADMS 4562 Lecture Notes - Fide

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scarletcrocodile704

6 Oct 2012

School

York University

Department

Administrative Studies

Course

ADMS 4562

Professor

Jason Fleming

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Document Summary

Worth: 7% (max 29 marks; 30 marks available) (inventory; 14 marks available) From 2010* (10 units): 10 x ,000 / 600 = From 2011 (490 units): 490 x ,000 / 1,600 = And, fmv* (i. e. , net realizable value): 500 x = * can also use lcm on opening inventory, 10 units x = ,750, and get full marks. Lower of cost: 172* units x ,000 / 300* = *must have both of these exact numbers to get these 2 marks, otherwise 0. And, fmv (i. e. , net realizable value): 172 x ,300 = A reserve of ,000 for unearned revenue/ goods that will be delivered after year-end can be claimed (1 mark) Kim will not have to include the principal amount of the loan in her income because: (1 mark) Kim got the loan due to her being an employee/ other employees can get similar loans (1 mark) Kim is a specified shareholder/specified employee, and (1 mark)

Related Questions

Yang Corporation uses the periodic inventory system. Thefollowing sales and purchases of the same product were made during20x1 at Yang Corporation. The opening inventory consisted of 50units at $2 each.

	Purchases		Sales
Date	Units	$ per unit	Date	Units	Unit $Price	Total
March 15	200	3	April 25	250*	5
June 15	600	5	June 30	500**	6

*for specific identification, sold 50 units of opening inventoryand 200 units of March 15 purchase

**for specific identification, sold 500 units of June 15purchase

Requirements:

1. Calculate cost of goods sold and the cost of ending inventoryunder FIFO, LIFO, specific identification, and weighted averageinventory cost flow assumptions. Use the student template #1

2. Calculate and compare the effect on profit of the fourinventory cost flow assumptions.

ACT300 Principlesof Accounting I
Module 4: Critical ThinkingTemplate Option #1


	FIFO	Units	Cost per unit	Sale per Unit	Totals
	Beginning Inventory	-	$0.00	$0.00	$0
	Purchases and Sales
	Mar 15-Purchase	-	$0.00	$0.00	$0	Data from the problem
	April 25-Sale	-	$0.00	$0.00	0	The opening inventory consisted of 50 units at $2each.
	Jun 15-Purchase	-	$0.00	$0.00	0
	Jun 30-Sale	-	$0.00	$0.00	0		Purchases		Sales
	Cost of Goods Available for Sale	-	$0.00	$0.00	$0	Date	Units	$ per unit	Date	Units	Unit $Price
	Cost of Goods Sold (COGS)	-	$0.00	$0.00	0	15-Mar	200	3	25-Apr	250*	5
	Ending Inventory	-	$0.00	$0.00	$0	15-Jun	600	5	30-Jun	500**	6

	COGS Calculation	Units	COGS	SalesTotals	Gross Profit
	Beginning Inventory	-	$0.00	$0.00	$0
	Purchases - Mar 15	-	$0.00	$0.00	$0
	Sale - April 25	-	$0.00	$0.00	$0
	Purchases - June 15		$0.00	$0.00	$0
	Sale - June 30		$0.00	$0.00	$0
			.	.
	Totals	-	$0.00	$0.00	$0

scarletreindeer725

During July 2014, Micanopy, sold 500 units of its productsEmpire for $8,000. The following units were available.

Units Cost

BeginningInventory 200 $2

Purchase1 80 $4

Purchase2 120 $6

Purchase3 300 $9

Purchase4 180 $12

A sale of 500 units was made after purchase 3. Of the unitssold, 200 came from beginning inventory and 300 came from purchase3.

Determine the costs of goods available for sale and endinginventory in units. Then determine the costs that should beassigned to cost of goods sold and ending inventory under ach ofthe following assumptions. (For each alternative, show the grossmargin. Round unit costs to cents and totals to dollars.)

Costs are assigned under the periodic inventory system using a.)the specific identification method, b) the average-cost method, c.)FIFO method and d.) LIFO method

Costs are assigned under the perpetual inventory system usinga.) the average-cost method, b.) the FIFO method, and c) the LIFOmethod

E7A. Periodic and PerpetualSystems and Inventory Costing Methods

Cost of goods available forsale and ending inventory in units

Units

Cost

Total

Beginninginventory

200

$ 2

$ 400

Purchase 1

320

Purchase 2

120

720

Purchase 3

300

2,700

Purchase 4

180

2,160

Cost of goods available forsale

880

$6,300

Sale in units

500

Ending inventory inunits

380

Periodic inventorysystem

Specific identificationmethod:

Sales

$8,000

Cost of goods available forsale

Less endinginventory*

Cost of goodssold

Gross margin

$4,900

Purchase 1

units

lilackangaroo550

P7-3 Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow LO7-2, 7-3

At the end of January 2014, the records of Donner Company showed the following for a particular item that sold at $16 per unit:

	Transactions	Units	Amount
	Inventory, January 1, 2014	500	$ 2,365
	Purchase, January 12	600	3,600
	Purchase, January 26	160	1,280
	Sale	(370)
	Sale	(250)

Required:
1a.	Compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific
	identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the
	January 12 purchase. (Round unit price to 2 decimal places. Input all amounts as positive values.)
	Input areas are shaded.

	Average Cost	Cost of Good Available for Sale			Cost of Goods Sold
		# of Units	Cost per Unit	Cost of Goods Available for Sale	# of Units Sold	Cost per Unit	Cost of Goods Sold
	Beginning inventory
	Purchases:
	January 12, 2014
	January 26, 2014
	Total

	FIFO	Cost of Goods Available for Sale			Cost of Goods Sold
		# of Units	Cost per Unit	Cost of Goods Available for Sale	# of Units Sold	Cost per Unit	Cost of Goods Sold
	Beginning inventory	500		$0
	Purchases:
	January 12, 2014	600		$0
	January 26, 2014	160		$0
	Total	1,260		$0	0

	LIFO	Cost of Goods Available for Sale			Cost of Goods Sold
		# of Units	Cost per Unit	Cost of Goods Available for Sale	# of Units Sold	Cost per Unit	Cost of Goods Sold
	Beginning inventory	500
	Purchases:
	January 12, 2014	600
	January 26, 2014	160
	Total	1,260		$ -	0		$ 4,040

	Specific Identification	Cost of Goods Available for Sale			Cost of Goods Sold
		# of Units	Cost per Unit	Cost of Goods Available for Sale	# of Units Sold	Cost per Unit	Cost of Goods Sold
	Beginning inventory	500
	Purchases:
	January 12, 2014	600
	January 26, 2014	160
	Total	1,260		$ -	0

Required:
2a.	FIFO and LIFO, which method would result in the higher pretax income?



2b.	FIFO and LIFO, which would result in the higher EPS?



3	FIFO and LIFO, which method would result in the lower income tax expense? Assume a 30 percent average tax rate.



4	FIFO and LIFO, which method would produce the more favorable cash flow?

bronzedeer241

ADMS 4562 Lecture Notes - Fide

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