Case Study: Shippers Ltd
In Class #6.1 – Identify items in inventory
Shippers Ltd. had the following inventory situations to consider at January 31, its year end:
1.
2.
3.
4.
5.
6.
Goods held on consignment for Boxes Unlimited since December 22
Goods shipped on consignment to Rinehart Holdings Ltd. on January 5
Goods that are still in transit and were shipped to a customer FOB destination on January 29
Freight costs due on goods in transit from item 3 above
Goods that are still in transit and were shipped to a customer FOB shipping point on January 29
Goods that are still in transit and were purchased FOB destination from a supplier on
January 25
7. Goods that are still in transit and were purchased FOB shipping point from a supplier on
January 25
Required
Identify which of the above items should be included in inventory. If an item should not be included in inventory, state where it should be recorded.
ACC300 Page1
In Class #6.2 – Apply perpetual FIFO and average and compare effect
Lakshmi Ltd. uses the perpetual inventory system and reports the following inventory transactions for the month of June:
Date
June 1
12
15
16
23
27
Explanation
Inventory
Purchase
Sale
Purchase
Purchase
Sale
Units
150
230
250
450
150
(570)
Unit Cost
$5
6
Total Cost
$ 750
1,380
7
8
3,150
1,200
Required:
Determine the cost of goods sold and the cost of the ending inventory using (1) FIFO and (2) average.
(For average, use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
ACC300 Page2
In Class #6.3 – Record LCNRV valuation
Cody Camera Shop Ltd. reports the following cost and net realizable value information for its inventory at December 31:
Units
Cameras:
Sony
Canon
Light Meters:
Gossen
Senonic
Unit Cost
Total Cost
Unit NRV
Total NRV
4
8
$175
$150
$700
$1,200
$160
$152
$640
$1,216
12
10
$135
$115
$1,620
$1,150
Shippers Ltd. had the following inventory situations to consider at January 31, its year end:
1.
2.
3.
4.
5.
6.
Goods held on consignment for Boxes Unlimited since December 22
Goods shipped on consignment to Rinehart Holdings Ltd. on January 5
Goods that are still in transit and were shipped to a customer FOB destination on January 29
Freight costs due on goods in transit from item 3 above
Goods that are still in transit and were shipped to a customer FOB shipping point on January 29
Goods that are still in transit and were purchased FOB destination from a supplier on
January 25
7. Goods that are still in transit and were purchased FOB shipping point from a supplier on
January 25
Required
Identify which of the above items should be included in inventory. If an item should not be included in inventory, state where it should be recorded.
ACC300 Page1
In Class #6.2 – Apply perpetual FIFO and average and compare effect
Lakshmi Ltd. uses the perpetual inventory system and reports the following inventory transactions for the month of June:
Date
June 1
12
15
16
23
27
Explanation
Inventory
Purchase
Sale
Purchase
Purchase
Sale
Units
150
230
250
450
150
(570)
Unit Cost
$5
6
Total Cost
$ 750
1,380
7
8
3,150
1,200
Required:
Determine the cost of goods sold and the cost of the ending inventory using (1) FIFO and (2) average.
(For average, use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
ACC300 Page2
In Class #6.3 – Record LCNRV valuation
Cody Camera Shop Ltd. reports the following cost and net realizable value information for its inventory at December 31:
Units
Cameras:
Sony
Canon
Light Meters:
Gossen
Senonic
Unit Cost
Total Cost
Unit NRV
Total NRV
4
8
$175
$150
$700
$1,200
$160
$152
$640
$1,216
12
10
$135
$115
$1,620
$1,150