90.2K

Verified Solution

Link Copied!

1. Farley Bains, an auditor with Nolls CPAs, is performing a review of Tamarisk Companys Inventory account. Tamariskdid not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $710,400. However, the following information was not considered when determining that amount.

1.		Included in the companys count were goods with a cost of $218,880 that the company is holding on consignment. The goods belong to Nader Corporation.
2.		The physical count did not include goods purchased by Tamarisk with a cost of $38,400 that were shipped FOB shipping point on December 28 and did not arrive at Tamarisks warehouse until January 3.
3.		Included in the Inventory account was $16,320 of office supplies that were stored in the warehouse and were to be used by the companys supervisors and managers during the coming year.
4.		The company received an order on December 29 that was boxed and was sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point. The goods had a selling price of $38,400 and a cost of $27,840. The goods were not included in the count because they were sitting on the dock.
5.		Included in the count was $48,000 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Tamarisks products, it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost, since that is what we paid for them, after all.

Prepare a schedule to determine the correct inventory amount.

	Ending inventory-as reported		$enter a dollar amount
1.	select an option Add to inventorySubtract from inventory		enter a dollar amount
2.	select an option Add to inventorySubtract from inventory		enter a dollar amount
3.	select an option Add to inventorySubtract from inventory		enter a dollar amount
4.	select an option Add to inventorySubtract from inventory		enter a dollar amount
5.	select an option Add to inventorySubtract from inventory		enter a dollar amount
	Correct inventory		$enter a total amount

2. Tamarisk sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Tamarisks purchases of EZslide snowboards during September. During the same month, 105 EZslide snowboards were sold. Tamarisk uses a periodic inventory system.

Date			Explanation		Units		Unit Cost		Total Cost
Sept.	1		Inventory		15		$118		$1,770
	12		Purchase		45		120		5,400
	19		Purchase		50		122		6,100
	26		Purchase		20		123		2,460
			Total		130				$15,730

Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods.

		FIFO		LIFO		AVERAGE-COST
Ending inventory at September 30		$enter ending inventory using First In First Out at September 30 in dollars		$enter ending inventory using Last In First Out at September 30 in dollars		$enter ending inventory using average-cost at September 30 in dollars

Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods.

		FIFO		LIFO		AVERAGE-COST
Cost of goods sold		$enter cost of goods sold using First In First Out in dollars		$enter cost of goods sold using Last In First Out in dollars		$enter cost of goods sold using average-cost in dollars

Answer & Explanation Solved by verified expert

See Answer