(Question#1): Lumley Company has the following inventory, purchases and sales date for the month of

March.

Unit Unit cost

March 1 Beginning inventory 100 $40
March 3 Purchase 60 $50
March 10 Purchase 200 $55
March 19 Purchase 40 $60

Unit Selling price

March 4 Sales 70 $80
March 16 Sales 80 $90

Instructions
Using the inventory and sales data above, calculate the value assigned to cost of goods sold in March and to
the ending inventory at March 31 using (a) FIFO and (b) Average cost. (Under periodic and perpetual).

(Question#2): Keiko Company took a physical inventory at December 31, 2013 and determined that
3,530,000 of goods were on hand. In addition,
(1) The company had goods consigned with Chang Company that had a cost of 700,000.
(2) On December 29, Keiko sold and shipped f.o.b. shipping point 600,000 worth of inventory.

Instructions
What amount should Keiko report as inventory on its December 31, 2013 statement of financial position?

(Question#3):(A) In a period of rising prices(inflation), what the inventory method which tends to report
1- the lowest inventory
2- greatest amount of net income .
3- lowest tax
(B) In a period of falling prices(deflation), what the inventory method which tends to report
1- the lowest inventory
2- greatest amount of net income .
3- lowest tax

(Question#4): Carlsberg Corporation has 2,000 units of product#1and 4,000 units of product#2 in its inventory
at December 31, 2014. Specific data with respect to each product follows:

Product#1 Product#2
Historical cost $40 $70
Net realizable value $45 $54

Instructions
What amount will be reported on the company statement of financial position at December 31, 2014 for ending
inventory using lower-of-cost-or-net realizable value?

(Question#5): Major Grey Company uses the retail inventory method to value its merchandise inventory. The
following information is available for the current year:

Cost Retail
Beginning inventory 45,000 60,000
Purchases 136,300 185,000
Net sales 185,000

*** assume Gross profit ratio 35%

Instructions
(A) Compute the estimated cost of the ending inventory under the retail inventory method?
(B) Compute the estimated cost of the ending inventory under the Gross profit method?