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Liberty ACCT 211 Connect Homework Chapter 5 Problems Answers Complete Solutions
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Question 1
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
1. Compute cost of goods available for sale and the number of units available for sale.
Question 2
2. Compute the number of units in ending inventory.
Question 3
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 70 units from beginning inventory and 200 units from the March 5 purchase; the March 29 sale consisted of 50 units from the March 18 purchase and 90 units from the March 25 purchase.
Question 4
4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 70 units from beginning inventory and 200 units from the March 5 purchase; the March 29 sale consisted of 50 units from the March 18 purchase and 90 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)
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Question 5
Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 660 units from beginning inventory, 230 from the February 10 purchase, 110 from the March 13 purchase, 90 from the August 21 purchase, and 250 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.)
4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)
Question 6
A physical inventory of Liverpool Company taken at December 31 reveals the following.
1. Calculate the lower of cost or market for the inventory applied separately to each item.
2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.
Question 7
Navajo Company’s financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Inventory on December 31, 2016, is understated by $54,000, and inventory on December 31, 2017, is overstated by $24,000.
1. For each key financial statement figure—(a), (b), (c), and (d) below—prepare a table to show the adjustments necessary to correct the reported amounts.
2. What is the error in total net income for the combined three-year period resulting from the inventory errors?
