# Worksheet week 6

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ADMS 2500 PASS Session Worksheet Week 7: Inventory PASS Leader: Sukhbir Sodhi Q1: Inventory Valuation Methods (Periodic inventory) Date/Type Units Cost per Unit Total Cost Jan, Inventory Mar, 100 Purchases May, 300 Purchases Oct, 250 Purchases 150 100 300 250 \$11 \$12 \$13 \$15 \$1650 \$1200 \$3900 \$3750 Ending balance of inventory on December 31 is 50 units. Calculate COGS and value of ending inventory using: 1. FIFO (first in first out): 2. LIFO (Last in first out): 3. Weighted Average Cost Method 4. Specific Identification if the units sold contained, 130 from January, 90 from March, 290 from May, and 240 from October. Q2: Inventory Valuation Methods (Perpetual inventory) Date/Type Unites Cost per Unit Total Cost Jan, Inventory Mar, 100 Purchases May, 300 Purchases Oct, 250 Purchases Goods Available for Sale 150 100 300 250 800 \$11 \$12 \$13 \$15 \$1650 \$1200 \$3900 \$3750 \$10500 On April 1, we sold 200 units at \$20 per unit, and then we sold 100 units in July at \$22. Calculate COGS at year end dated Dec 31 using FIFO, LIFO & Weighted average methods. a. FIFO b. LIFO c. Weighted average method Q3: Solve the following: Company ABC bought inventory on January 1 st for \$20,000. At the end of the year, the market value for the goods was \$16500. Please journalize the following transaction.
Q4: Apply LCM concept Cost Market Price Watch \$500 \$450 TV \$400 \$600 VR Headset \$600 \$350 Speaker \$200 \$350 How much will you write off as loss in decline in inventory under aggregate and item- item method? Q5: Which cost flow method will provide you with highest NI when the price of acquiring inventory keeps increasing? a) LIFO b) FIFO c) Specific Identification d) Weighted Average Cost Q6: By how many accounting periods are the financial statement of a company affected by an inventory error? a) 1 b) 2 c) 3 d) Every period will be affected by it unless corrected. Q7: At what value would inventory appear in books, if it costed \$10,000, the delivery fee and insurance was \$500, and you got a discount of 10%. Q8: Which cost flow method is not acceptable by GAAP in Canada anymore? a) LIFO b) FIFO c) Specific Identification d) Weighted Average Cost