Inventory valuation

$8.00

Description

A company is in the process of preparing interim
financial statements. Since they take physical on an annual basis they use the
Retail Inventory Method to estimate the inventory. Fortunately, the Company
keeps very detailed inventory records at both cost and retail. The following information for corrugated
boxes as of the end of the third quarter, 2012, is provided.

Using the retail inventory method, calculate ending
inventory at cost (for the third quarter of 2012)

Cost

Retail

Beginning Inventory

92,000

167,000

Purchases

220,000

435,000

Purchase discounts

3,000

Purchase returns

8,000

Markups

10,000

Markup cancellations

25,000

Markdowns

5,000

Employee discounts

9,000

Sales

430,000

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Inventory valuation

$2.00

Description

 

Inventory valuation

During June, the following changes in inventory item #27 took place:

.

Instructions

What is the cost of the ending inventory for item #27 under the following methods? (Show calculations.)=

(a) FIFO.

(b) LIFO.

(c) Moving average

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