Question

Generally, which inventory costing method approximates most closely the current cost for each of the following?

1.

Cost of goods sold		Ending inventory
LIFO		FIFO

2. Lifo Lifo

3. Fifo Fifio

4. Fifo Lifo

Marsh Company had 150 units of product A on hand at January 1, year 2, costing $21 each. Purchases of product A during the month of January were as follows:

		Units		Unit cost
Jan.   10		200		$22
18		250		23
28		100		24

A physical count on January 31, year 2, shows 250 units of product A on hand. The cost of the inventory at January 31, year 2, under the LIFO method is

1. $5,850

2. $5,550

3. $5,350

4. $5,250

Max's Co.'s inventory on December 31, 2005 was $1,500,000, based on a physical count priced at cost, and before any necessary adjustment for the following:

• Merchandise costing $90,000, shipped FOB shipping point from a vendor on December 30, 2005, was received and recorded on January 5, 2006.

• Goods in the shipping area were excluded from inventory although shipment was not made until January 4, 2006. The goods, billed to the customer FOB shipping point on December 30, 2005, had a cost of $120,000.

What amount should Max report as inventory in its December 31, 2005, balance sheet?

1.$1,500,000

2.$1,590,000

3.$1,620,000

4.$1,710,000

On October 20, 2005, Heavy Co. consigned 40 freezers to Holden Co. for sale at $1,000 each and paid $800 in transportation costs. On December 30, 2005, Holden reported the sale of 10 freezers and remitted $8,500. The remittance was net of the agreed 15% commission.
What amount should Heavy recognize as consignment sales revenue for 2005?

1.$7,700

2.$8,500

3.$9,800

4.$10,000

Answer 1

As per HOMEWORKLIB RULES solved 3 parts.