The records at the end of January 2012 for Captain Company showed the following for a particular...
Question:
The records at the end of January 2012 for Captain Company showed the following for a particular kind of merchandise:
Inventory, December 31, 2011, at FIFO: 19 Units @ $16 = $304
Inventory, December 31, 2011, at LIFO: 19 Units @ $12 = $228
| Transactions | Units | Unit Cost | Total Cost |
| Purchase, January 9, 2012 | 25 | $14 | $350 |
| Purchase, January 20, 2012 | 50 | 19 | 950 |
| Sale, January 21, 2012 (at $38 per unit) | 40 | ||
| Sale, January 27, 2012 (at $39 per unit) | 28 |
1. Compute the inventory turnover ratio under the FIFO and LIFO inventory costing methods (show computations and round to the nearest dollar).
2. Which costing method is the more accurate indicator of the efficiency of inventory management? Explain.
Inventory Turnover:
Inventory turnover ratio is a turnover ratio which measures the ability of a company in selling off its inventory during a pre determined period. A low turnover ratio represents weak selling and a high ratio represents the good position in selling.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answer1. Calculation of Inventory Turnover Ratio:
FIFO:
| Date | Particulars | Units | Amount($) | Amount($) |
|---|---|---|---|---|
| 01.1.2012 | ...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average
from
Chapter 6 / Lesson 11
39K
Inventory valuation methods are ways that companies place a monetary value on the items they have in their inventory. Discover different inventory valuation methods, including specific identification, First-In-First-Out (FIFO), Last-In-First-Out (LIFO), and weighted average.
Related to this Question
- Title Products' inventory records show the following inventory purchases for its first year of operations: A physical inventory on December 31 shows 2,000 units on hand. Under the FIFO method, how much is the December 31 inventory balance? A) $12,000. B)
- Simple Plan Enterprises uses a periodic inventory system its records showed the following: Inventory December 31, using FIFO 66 units $28 $1,848 Inventory December 31, using FIFO 66 units $24 $1,584
- Simple Plan Enterprises uses a periodic inventory system. Its records showed the following: Inventory, December 31, using FIFO 64 Units @ $27 = $1,728 Inventory, December 31, using LIFO 64 Units @
- The company wants to end each month with ending finished goods inventory equals to 20% of the next month's sales. Finished goods inventory on December 31 is 620 units. The budgeted production units for February are: a. 5,320 units. b. 5,100 units. c. 4,46
- A company's inventory records report the following: August 1: Beginning balance 18 units @ $8 August 5: Purchase 13 units @ $7 August 12: Purchase 17 units @ $8 On August 15, it sold 36 units. Using the FIFO perpetual inventory method, what is
- A company had the following purchases and sales during its first year of operations: On December 31, there were 26 units remaining in ending inventory. Using the Periodic LIFO in goods sold? (Assume a
- Compute ending inventory using FIFO and LIFO: In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7,
- A company's inventory records report the following: August 1 Beginning balance 15 units @ $12 August 5 Purchase 10 units @ $13 August 12 Purchase 20 units @ $14 On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the valu
- On January 1, 20X7, the ledger of Conglomo Corporation correctly showed supplies inventory of $1,000. During 20X7, supplies purchases amounted to $6,000. A count (inventory) of supplies on hand on December 31, 20X7, showed $2,000. The 20X7 Income Statemen
- A company's inventory records report the following: August 1 - Beginning balance - 29 units at $19 August 5 - Purchase - 24 units at $18 August 12 - Purchase - 28 units at $19 On August 15, it sold 58 units. Using the FIFO perpetual inventory method,
- Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales for Item 88-HX are as follows: Jan. 1 Inventory 90 units @ $34 Jan. 8 Sale 72 units Jan. 15 Purchase 100 units @ $37 Jan. 27 S
- On January 1, 20X7, the ledger of Conglomo Corporation correctly showed supplies inventory of $1,000. During 20X7, supplies purchases amounted to $6,000. A count (inventory) of supplies on hand on December 31, 20X7, showed $2,000. The 20X6 Balance Sheet s
- On January 1, 20X7, the ledger of Conglomo Corporation correctly showed supplies inventory of $900. During 20X7, supplies purchases amounted to $6,000. A count (inventory) of supplies on hand on December 31, 20X7, showed $1,800. The 20X7 Balance Sheet sta
- A company reports the following beginning inventory and purchases for the month of January. On January 26, the company sells 290 units. 130 units remain in ending inventory on January 31. Units Unit
- A company's inventory records report the following: August 1 Beginning balance 28 units at $18 August 5 Purchase 23 units at $17 August 12 Purchase 27 units at $18 On August 15, it sold 56 units. Using the FIFO perpetual inventory method, what is the valu
- The general ledger of the ABC Corporation included the following account balances. Sales $396,000 Raw materials inventory, Jan. 1 $25,000 Work in process inventory, Jan. 1 $26,300 Finished goods inventory, Jan. 1 $30,900 Raw materials purchased $63,800 Di
- Holiday Manufacturing had the following inventories at December 31, 2015, the end of its fiscal year: Material inventory 19,000 Work in process inventory 20,000 Finished goods inventory 13,000 1) Dur
- The inventory records for Barts Inc. indicate the following activity for the month of January. The January 31st ending inventory using unit LIFO in a perpetual inventory system is ____. a. $4,960 b. $5,060 c. $5,080 d. $5,140 | January 1 balance, 1000 un
- Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, 2012, the accounting records for the most popular item in inventory showed the following: Transactions Units Unit Cost Beginning inventory, Jan
- Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales for Item ER27 are as follows: January 1 Inventory 55 units @ $19 9 Sale 36 units 13 Purchase 57 units @ $21 28 Sale 25 units
- LIFO Perpetual Inventory and sales for a three-month period ending June 30 are as follows: Date Transaction Number of Units Per Unit Total Apr. 3 Inventory 54 $375 $20,250 8 Purchase 108 450 48,600 1
- A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory. a) If the company uses the LIFO periodic inventory method, then what would be
- A company changed from LIFO to the FIFO inventory costing method on January 1, 2015. Inventory values at the end of each year since the inception of the company are as follows: | |FIFO| LIFO |2014| $300,000| $280,000 |2015| 500,000| 460,000 Re
- Logan Company uses a perpetual inventory system on a FIFO basis. Assuming inventory on January 1 was 800 units at $8 each, what is the cost of ending inventory at the end of October 5?
- The inventory records for Freer reflected the following: Jan 1 Beginning Inventory 300 units @ $2.10 Jan 12 First Purchase 400 units @ $2.40 Jan 21 Second Purchase 600 units @ $2.50 Jan 31 Sales 800 units @ $5.00 Assuming that Freer uses a FIFO cost flow
- A company's January 1 goods in process inventory contained 30,000 units that were 1/4 complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and
- A company's January 1 goods in process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and
- The inventory records for Barts Inc. indicate the following activity for the month of January. The January 31st ending inventory using unit FIFO in a perpetual inventory system is ____. a. $5,050 b. $5,060 c. $5,080 d. $5,140 | January 1 balance, 1000 un
- Perpetual Inventory Using LIFO : Beginning inventory, purchases, and sales for Item ER27 are as follows: January 1 Inventory 100 units @ $21 ; 5 Sale 80 units ; 11 Purchase 111 units @ $25 ; 21 Sale 9
- The inventory records for Freer reflected the following: Jan 1 Beginning Inventory 300 units @ $2.10 Jan 12 First Purchase 400 units @ $2.40 Jan 21 Second Purchase 600 units @ $2.50 Jan 31 Sales 800 units @ $5.00 Assuming Freer uses a FIFO cost flow metho
- The inventory records for Barts Inc. indicate the following activity for the month of January. The January 31st ending inventory using unit LIFO in a periodic inventory system is ____. a. $5,040 b. $5,055 c. $5,075 d. $5,135 | January 1 balance, 1000 uni
- The following balances are from the accounts of Hill Components: January 1 (Beginning): Direct materials inventory $21,700, Work-in-process inventory $32,500, Finished goods inventory $5,300. Decem
- It is currently December 31, 2013, the end of the fiscal year of The Should-I-Switch Merchandising Co. The firm currently uses FIFO to value its inventory. Its beginning of year inventory was 12,000 u
- Raw materials inventory, January 1 $20,000 Raw materials inventory, December 31 10,000 Work in process inventory, January 1 6,000 Work in process inventory, December 31 9,000 Finished goods inventory,
- The beginning inventory balance of a particular product and the purchases during December were given below. The ending inventory consisted of 775 units. Find the cost of goods sold based on the following periodic method of inventory valuation: LIFO. | B
- During January, a company that uses a perpetual inventory system had beginning inventory, purchases, and sales as follows: Units Cost per unit Beginning Inventory 100 $15 Jan. 5, Sales 50 Jan. 10, Purchases 70 $13 Jan. 15, Sale 25 Jan. 25, Sale 35 Require
- A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is us
- A company reported the following purchases and sales data for December. The company uses a perpetual inventory system. Determine the cost of goods sold for December, using FIFO, LIFO, and Weighted Average methods.
- A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 350 units. Ending inventory at January 31 totals 150 units. Units Unit Cost Beginning inventory on January 1 320 $3.00 Purcha
- Sunland Corporation incurred the following costs while manufacturing its product: Work in process inventory was $13,000 at January 1 and $17,600 at December 31. Finished goods inventory was $69,500 at
- 1. A company reports the following beginning Inventory and two purchases for the month of January. On January 26, the company sells 360 units. Ending Inventory at January 31 totals 130 units. Units U
- Beginning inventory 20 units at $5.00 each January 1: Purchase 50 units at $5.50 each January 5: Purchase 60 units at $6.00 each Ending inventory 35 units All January sales occurred after January 5. Determine COST OF GOODS SOLD for January under FIFO.
- Star Company uses a periodic inventory system. At the end of the annual accounting period, December 31, 2012, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, 2011 2,000 $5 For the year 2012:
- A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 450 units. Ending inventory on January 31 totals 170 units. Units Unit cost Beginning inventory on January 1 410 $4 Purchases
- The following balances are from the accounts of Crabtree Machining Company: January 1 (Beginning) December 31 (Ending) Direct materials inventory $98,700 $110,700 Work-in-process inventory $109,500 $106,100 Finished goods inventory $45,800 $44,300 Direct
- A company reports the following beginning inventory and purchases for the month of January. On January 26, the company sells 360 units. Units Unit Cost Beginning inventory on January 1 320 $6.00 Purchase on January 9 85 6.40 Purchase on January 25 110 6.6
- A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 360 units. Ending inventory at January 31 totals 130 units. Units Unit Cost Beginning inventory on January 1 320 $3.10 Purchas
- A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 260 units. Ending inventory at January 31 totals 120 units. Units Unit Cost Beginning inventory on January 1 230 $2.10 Purchas
- A company reports the following beginning inventory and purchases for the month of January. On January 26, the company sells 350 units. 150 units remain in ending inventory at January 31. Units Unit Cost Beginning inventory on January 1 320 $ 3
- Hello Corporation has the following budgeted sales for the next six-month period There were 50,000 units of finished goods in inventory at the beginning of June. Plans are to have an inventory of fin
- Assume a beginning inventory of $25,000 (250 units), a purchase on January 3 of $35,000 (300 units), and a purchase on January 18 of $40,000 (310 units). In addition, 500 units were sold on January 15. Using perpetual FIFO, January's ending inventory is:
- A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 410 units. Ending inventory at January 31 totals 150 units Units Unit Cost Beginning inventory on January 1 370 $3.60 Purchase
- Barger Company had the following information at December 31: Finished goods inventory, January 1 $60,000 Finished goods inventory, December 31 84,000 If the cost of goods manufactured during the year amounted to $1,330,000 and annual sales were $1,996,
- A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 360 units. Ending inventory at January 31 totals 130units. Units Unit Cost Beginning inventory on January 1 320 $3.10 Purchase
- A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 320 units. Ending inventory at January 31 totals 140units. Units Unit Cost Beginning inventory on January 1 290 $2.70 Purchase
- Thelen's inventory records show the following data at January 31: Beginning inventory Jan. 1 90 units at $5 per unit Jan. 10 purchase 270 units at $11 per unit Jan. 22 purchase 130 units at $12 per unit At January 31, 230 units are still on hand. What is
- The following balances are from the accounts of Tappan Parts: January 1 (Beginning) December 31 (Ending) Direct materials inventory $962,000 $884,000 Work-in-process inventory 1,354,000 1,430,000 Fin
- Assume beginning inventory of $25,000 (250 units), a purchase on January 3 of $35,000 (300 units), and a purchase on January 18 of $40,000 (310 units). 500 units were sold on January 15. Using perpetual FIFO, January's ending inventory is: a. $36,000 b. $
- Presented below are income statements prepared on a LIFO and FIFO basis for Sage Company, which started operations on January 1, 2016. The company presently uses the LIFO method of pricing its inventory and has decided to switch to the FIFO method in 2017
- Derflinger Corporation reported the following data for the month of January: Beginning ; Ending ; Inventories: Raw materials - $45,000 ; $33,500 ; Work in process ; $25,500 ; $26,500 ; Finished goods
- Tiger Rags uses a perpetual inventory system. Under the LIFO inventory costing method, what amount of Ending Inventory would be reported by the company at March 31st (the end of the month)? March 1 25 units on hand at $2 each $ 50 March 4 Sold 20 units f
- The Alpha Corporation made the following purchases of Product Y during the current year: January 3 200 units at $6.50 March 7 175 units at $8.00 August 18 225 units at $12.00 November 23 150 units at $14.00 There was no beginning inventory, but the ending
- The following balances are from the accounts of Tappan Parts: January 1 (Beginning) December 31 (Ending) Direct materials inventory 22,000$ 24,900 Work-in-process inventory 32,300 28,700 Finished
- Nix It Company's ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix It uses the perpetual inventory system). Merchandise inventory $34,800 Sales returns and allowances $3,500 T. Nix, Capital
- The accounting records of NuTronics, Inc., include the following information for the year ended December 31. Dec. 31 Jan. 1 Inventory of materials $24,000 $20,000 Inventory of work in process 8,000 12,000 Inventory of finished goods 90,000 80,000 Direct m
- The following inventory was available for sale during the year for Kudlow Company: Kudlow has 30 units on hand at the end of the year. What is the dollar amount of inventory at the end of the year according to the FIFO method? a. $1,200 b. 51,350 c. $1,
- Nix-It Company's ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix-It uses the perpetual inventory system). Merchandise inventory $ 44,80
- The following balances are from the accounts of Crabtree Machining Company: - January 1 (Beginning) December 31 (Ending) Direct materials inventory $98,000 $109,500 Work-in-process inventory 109,500 107,900 Finished goods inventory 45,100 45,1
- Willow Corp uses a FIFO process costing system. Beginning inventory for January consisted of 1,000 units that were 40% completed, and 10,000 units were started into the process during January. On January 31, the inventory consisted of 500 units that were
- Given the following selected account balances of Shanta Company. Sales $1,298,000 Raw materials inventory, Dec 31, 2012 37,000 Goods in process inventory, Dec 31, 2012 53,400 Finished goods inventory
- The firm uses the periodic system and there are 15 units left at the end of the year. What is the amount of ending merchandise inventory at the end of the year using LIFO: Beginning inventory 10 units at $60 first purchase - 25 units at $63 second purc
- Holliday Company's inventory records show the following data: Units Unit Cost Inventory, January 1 5,000 $11.00 Purchases:June 18 4,500 9.00 November 8 3,000 3.00 A physical inventory on December 31 s
- Melas Company changed from the LIFO to the FIFO inventory costing method on January 1, Year 3. Inventory values at the end of each year since the inception of the company are as follows: FIFO LIFO Year 1 $195,000 $177,500 Year 2 390,000 355,000
- The accounting records to Wall's China Shop reflected the following balances as of January 1, 2016: Cash $16,700 Beginning inventory 13,950 (155 units @ $90) Common stock 14,900 Retained earnings 15,
- Hat's accounting records showed the following: Inventory, January 1 $35,000 Purchases, January 1 through May 1 200,000 Sales, January 1 through May 1 250,000 Inventory not damaged by flood 30,000 Gross profit percentage on sales 40% What amount of invent
- Case Industries had the following information at December 31: Finished goods inventory, January 1 $60,000 Finished goods inventory, December 31 84,000 If the cost of goods manufactured during the year amounted to $1,330,000 and annual sales were $1,996,00
- Trans Co. uses the periodic inventory system. The following are inventory transactions for the month of January: Jan. 1 Beginning inventory 10, 000 units @ $3 5 Purchase 8, 000 units @ $4 15 Purchase 5, 000 units @ $6 20 Sales at $10 per unit 14, 000 uni
- Partial balance sheet data for Flat Top Company on December 31, 2016, are as follows: Finished goods inventory $43,250 Prepaid insurance 26,500 Accounts receivable 104,000 Work in process inventory 155,500 Supplies 70,600 Materials inventory 88,750 Cash 1
- Tomasino's inventory records show the following data on January 31: Beginning inventory Jan. 1 90 units at $9 per unit Jan. 10 purchase 300 units at $11 per unit Jan. 22 purchase 90 units at $12 per unit On January 31, 210 units are still on hand. What is
- Murdock Industries uses a periodic inventory system and the LIFO retail method to estimate its ending inventories. The following date has been summarized for December 31, 2016: Cost Retail Inventory,
- Partial balance sheet data for Ellison Company at December 31, 2008 are as follows: Finished goods inventory 12,500 Prepaid Insurance 6,000 Accounts receivable 25,000 Work in process inventory 45,000 Supplies 15,000 Materials Inventory 24,000 Cash
- Eastland Company reports the following for the month of June.Compute the cost of the ending inventory and the cost of goods sold under FIFO and LIFO FIFO LIFO The cost of the ending inventory $ $ The
- Partial balance sheet data for Flat Top Company at December 31, 2016, are as follows: Finished goods inventory $39,000 Prepaid insurance 26,250 Accounts receivable 104,500 Work in process inventory 15
- Trans Co. uses the periodic inventory system. The following are inventory transactions for the month of January: Jan. 1 Beginning inventory 10, 000 units @ $3 5 Purchase 8, 000 units @ $4 15 Purchase 5, 000 units @ $6 20 Sales at $10 per unit 14, 000 unit
- At December 31, 2014, the following information was available for A. Kamble Company: ending inventory $42,830, beginning inventory $64,440, cost of goods sold $260,720, and sales revenue $387,740. Calculate inventory turnover.
- A company's inventory records report the following: August 1 Beginning balance 35 units @ $25 August 5 Purchase 30 units @ $24 August 12 Purchase 34 units @ $25 On August 15, it sold 70 units. Using the FIFO perpetual inventory method, what is the value o
- Hull Company's record of transactions concerning part X for the month of April was as follows. Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records
- Inventory records for Dunbar Incorporated revealed the following: \\ \\ Dunbar sold 700 units of inventory during the month. Ending inventory assuming LIFO would be \\ A. $500 B. $490 C. $470 D. $480
- Holliday Company's inventory records show the following data: Units Unit Cost Inventory, January 1 5,000 $9.50 Purchases: June 18 4,500 9.00 November 8 3,000 4.00 A physical inventory on December 31
- Presented below are income statements prepared on a LIFO and FIFO basis for Sunland Company, which started operations on January 1, 2016. The company presently uses the LIFO method of pricing its inve
- IF opening inventory is 100 units, which's cost is $ 400. following purchase and sales where made during the year find out closing inventory using FIFO. 12th January purchase 25 units $125 30th January sales 35 units $ 140
- Prepare the entries for the following transactions using a general journal: 1. Discarding an asset. (a) On January 4, shelving units, which had a cost of $6,400 and had accumulated depreciation of $5,900, were discarded. (b) On June 15, a hand cart, which
- Under the perpetual LIFO method, the ending inventory is: a. $470 b. $180 c. $435 d. $215 There was no beginning inventory. During July, James Company made the following purchases: July 3rd 20 units @ $12 July 11th 20 units @ $13 July 20th 10 units @ $15
- Gladstone Company tracks its inventory using a periodic inventory system and recorded the following information at the end of the accounting period on December 31. Transactions ; Units ; Unit Cost ;
- The following balances are from the accounts of Tappan Parts: January 1 (Beginning) December 31 (Ending) Direct materials inventory $21,900 $24,600 Work-in-process inventory 32,600 29,400 Finished goods inventory 5,000 7,300 Direct materials used during t
- Cypress Co. has the following LIFO perpetual inventory records: December 1 Inventory on Hand: $4,450 December 7 Purchases $1,500 December 18 Cost of Goods Sold $1,300 December 31 Purchases $1,600 Dece
- Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2013. Information regarding ending inventory is as follows: Date Inventory at Year-End Prices Price Index (base year 2013) December 31, 2013 $71,600 1.00 Dec
- The Alderman Company has prepared a sales budget of 48,000 finished units for a 3-month period. The company has an inventory of 14,000 units of finished goods on hand on December 31 and has a target finished goods inventory of 16,000 units at the end of t
- Messinger Manufacturing Company had the following account balances for the quarter ending March 31, unless otherwise noted: Work-in-process inventory (January 1) $140,400 Work-in-process inventory (March 31) $171,000 Finished goods inventory (January 1) $
- Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31, 2015, the accounting records provided the following information for product 1: Compute ending inventory and cost of goods sold under FIFO, LIFO, and
Explore our homework questions and answers library
Browse
by subject