Assignment
08
A04 Intermediate Accounting I
Directions: Be sure to make an
electronic copy of your answer before submitting it to Ashworth College
for grading. Unless otherwise stated, answer in complete sentences, and
be sure to use correct English spelling and grammar. Sources must be
cited in APA format. Refer to the “Assignment Format” page
for specific format requirements.Part
A (30 points)The Bravo Company manufactures a single
product. On December 31, 2012 Bravo
adopted the dollar-value LIFO inventory method.
The inventory on that date using the dollar-value LIFO inventory method
was determined to be $500,000. Inventory
data for succeeding years are as follows:Year Ended December 31Inventory at Respective Year-end PricesRelevant Price Index (Base Year 2012)2012$500,0001.002013527,0001.082014635,0001.152015645,0001.21Compute the inventory amount at December
31, 2013, 2014, and 2015 using the dollar-value LIFO inventory method for each
year. (Round all amounts to the nearest
dollar, 10 points each)Part
B (40 points)Information from Hope CompanyΓ’ΒΒs records for
the year ended December 31, 2015 is available as follows:Net sales$2,800,000Cost of goods
manufactured:Variable$1,260,000Fixed$630,000Operating
expenses:Variable$196,000Fixed$240,000Units
manufactured70,000Units sold60,000Finished goods
inventory, 1/1/2015$0Hope had no
work-in-process inventories at either the beginning or end of 2015.a.
What would be HopeΓ’ΒΒs finished
goods inventory cost under the variable (direct) costing method at December 31,
2015? (20 points)
b.
What would HopeΓ’ΒΒs operating
income be under the absorption costing method? (20 points)Part
C (30 points, 10 each)Tool City, Inc. had 300 cordless
screwdrivers on hand at January 1, 2015 costing $45 each. Purchases and sales of cordless screwdrivers
during the month of January were as follows:DatePurchasesSalesJanuary
9200
@ $75January
14100
@ $47January
2375 @
$76January
25100
@ $48January
3075 @
$77Tool City does not maintain perpetual
inventory records. According to a
physical count, 150 cordless screwdrivers were on hand at January 31, 2015.a.
What is the cost of the
inventory at January 31, 2015 under the FIFO method?
b.
What is the cost of the
inventory at January 31, 2015 under the LIFO method?
c.
What is the cost of the
inventory at January 31, 2015 under the FIFO method if only 145 cordless
screwdrivers were on hand at the time of the physical count?
Our Key Guarantees
- β 100% Plagiarism-Free
- β On-Time Delivery
- β Student-Friendly Pricing
- β Human-Written Papers
- β Free Revisions (14 days)
- β 24/7 Live Support