# ACC – The controller of Alt Company

June 6, 2016

Question
1.) The controller of Alt Company is applying the lower-of-cost-or-market basis of valuing its ending inventory. The following information is available:

Cost Market

Lawnmowers:

Self-propelled\$14,800\$17,000

Push type 19,000 18,000

Total 33,800 35,000

Snowblowers:

Manual29,80031,000

Self-start 19,000 21,000

Total 48,800 52,000

Total inventory\$82,600\$87,000

Instructions

Compute the value of the ending inventory by applying the lower-of-cost-or-market basis.

1. Below is an analysis of the inventory purchases and sales of Hackenberry for the month of March. Lester Company uses the periodic inventory system.
Purchases Sales
Units Unit Cost Units Selling Price/Unit
3/1 Beginning inventory 100 \$40
3/3 Purchase 60 \$50
3/4 Sales 70 \$80
3/10 Purchase 200 \$55
3/16 Sales 80 \$90
3/19 Sales 60 \$90
3/25 Sales 40 \$90
3/30 Purchase 40 \$65

Instructions
(a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations)
(b) Using the weighted-average method, calculate the amount assigned to the inventory on hand on March 31. (Show computations)
(c)Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations)

2. Grey Co uses the periodic inventory system to account for inventories. Info on inventory at October 31 given below.

Oct 1 beginning 400 units @ 9.80 = 3920

8 purchase 800 @10.40

16 purchase 600 @ 10.80

24 purchase 200 @ 11.80 = 2360

Total units and cost 2000 21080

1. Show computations to value ending inventory using the FIFO cost assumption if 550 units remained on hand at Oct 31.

2. … value using the weighted average cost method if 550 remained on hand at Oct 31

3. … using LIFO …