ACC 422 WEEK 3 WILEYPLUS ASSIGNMENT EXERCISES

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ACC 422 Week 3 WileyPlus Assignment Exercises,
E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2011,consistsofthe following items.
Part No. Quantity Cost per Unit Cost to Replace per Unit
110 600 $95 $100
111 1,000 60 52
112 500 80 76
113 200 170 180
120 400 205 208
121a 1,600 16 14
122 300 240 235 aPart No. 121 is obsolete and has a realizable value of $0.50 each as scrap.
Instructions
(a) Determine the inventory as of December 31, 2011, by the lower-of-cost-or-market method, applying this method directly to each item.
(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.
E9-12 (Gross Profit Method) Astaire 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 $ 160,000
Purchases (gross) 640,000
Freight-in 30,000
Sales 1,000,000
Sales returns 70,000
Purchase discounts 12,000
Instructions
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.
E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2011,consistsofthe following items.
Part No. Quantity Cost per Unit Cost to Replace per Unit
110 600 $95 $100
111 1,000 60 52
112 500 80 76
113 200 170 180
120 400 205 208
121a 1,600 16 14
122 300 240 235 aPart No. 121 is obsolete and has a realizable value of $0.50 each as scrap.
Instructions
(a) Determine the inventory as of December 31, 2011, by the lower-of-cost-or-market method, applying this method directly to each item.
(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.
E9-12 (Gross Profit Method) Astaire 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 $ 160,000
Purchases (gross) 640,000
Freight-in 30,000
Sales 1,000,000
Sales returns 70,000
Purchase discounts 12,000
Instructions
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.

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