Problem 8-1 The following independent situations relate to inventory accounting. Answer the foll… 1 answer below »

Problem 8-1

The following independent situations relate to inventory accounting.

Answer the following questions about inventories. Kingbird Co. purchased goods with a list price of $168,300, subject to trade discounts of 20% and 10%, with no cash discounts allowable. How much should Kingbird Co. record as the cost of these goods?
Cost of goods purchased $

Oriole Company’s inventory of $1,062,300 at December 31, 2017, was based on a physical count of goods priced at cost and before any year-end adjustments relating to the following items.
(a) Goods shipped from a vendor f.o.b. shipping point on December 24, 2017, at an invoice cost of $75,630 to Oriole Company were received on January 4, 2018. (b) The physical count included $30,510 of goods billed to Sakic Corp. f.o.b. shipping point on December 31, 2017. The carrier picked up these goods on January 3, 2018.
What amount should Oriole report as inventory on its balance sheet?
Inventory to be reported $

Waterway Corp. had 1,880 units of part M.O. on hand May 1, 2017, costing $29 each. Purchases of part M.O. during May were as follows.


Units Cost May 9 2,380 $30 17 3,880 32 26 1,380 33
A physical count on May 31, 2017, shows 2,380 units of part M.O. on hand. Using the FIFO method, what is the cost of part M.O. inventory at May 31, 2017? Using the LIFO method, what is the inventory cost? Using the average-cost method, what is the inventory cost? (Round average cost per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 1,620.)



Average Cost Inventory Cost $



Wildhorse Company adopted the dollar-value LIFO method on January 1, 2017 (using internal price indexes and multiple pools). The following data are available for inventory pool A for the 2 years following adoption of LIFO.


At Base-Year

At Current-Year
Cost 1/1/17 $206,800 $206,800 12/31/17 226,500 271,800 12/31/18 232,600 288,424
Computing an internal price index and using the dollar-value LIFO method, at what amount should the inventory be reported at December 31, 2018?
December 31, 2018 Price Index

Dollar-value LIFO inventory $

Sheffield Inc., a retail store chain, had the following information in its general ledger for the year 2018.
Merchandise purchased for resale $884,460 Interest on notes payable to vendors 8,450 Purchase returns 15,210 Freight-in 23,530 Freight-out (delivery expense) 15,750 Cash discounts on purchases 6,848
What is Sheffield’s inventoriable cost for 2018?
Sheffield’s inventoriable cost for 2018 $


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