Inventory
Problem 1
A subsidiary of J & J Products is in the process of preparing interim financial statements. Since they take physical inventory on an annual basis they use the Conventional Retail Inventory Method to estimate inventory. Fortunately, J &J Products keeps very detailed inventory records at both cost and retail. The following information for containers, as of the end of the third quarter, 2015, is provided.
Cost Retail
Beginning inventory 90,000 167,000
Purchases 250,000 435,000
Purchase returns 8,000
Markups 10,000
Markup cancellations 25,000
Markdowns 5,000
Employee discounts 9,000
Sales 400,000
Using the conventional retail inventory method calculate ending inventory at cost (for the third quarter of 2015).
Problem 2
J & J Products ordered $125,000 of raw material, FOB destination, from Acme Company on Dec. 31st of 2015. The merchandise was shipped on January 2nd. J & J Products did not include it in their 2015 raw materials inventory. Prepare any necessary entries.
Problem 3
A wholly owned subsidiary of J & J Products implemented Dollar Value LIFO inventory valuation in 2010, when their ending inventory was $650,000. The following are the inventory amounts for an ingredient used in packaging for years 2011 - 2015. The price index has been increasing by 5% each year 2011 through 2015.