The following independent situations relate to inventory accounting.

1. Kim Co. purchased goods with a list price of €175,000, subject to two trade discounts of 20% and 10%, with no cash discounts allowable. How much should Kim Co. record as the cost of these goods?

2. Keillor Company’s inventory of €1,100,000 at December 31, 2022, 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, 2022, at an invoice cost of €69,000 to Keillor Company were received on January 4, 2023.

b. The physical count included €29,000 of goods billed to Sakic Corp. f.o.b. shipping point on December 31, 2022. The carrier picked up these goods on January 3, 2023. What amount should Keillor report as inventory on its statement of financial position?

3. Zimmerman AG had 1,500 units of part M.O. on hand May 1, 2022, costing €21 each. Purchases of part M.O. during May were as follows.

A physical count on May 31, 2022, shows 2,000 units of part M.O. on hand. Using the FIFO method, what is the cost of part M.O. inventory at May 31, 2022? Using the average-cost method, what is the inventory cost?

4. Donovan AS, a retail store chain, had the following information in its general ledger for the year 2022.

Merchandise purchased for resale ....................................... €909,400
Interest on notes payable to vendors ........................................ 8,700
Purchase returns .......................................................................... 16,500
Freight-in ........................................................................................ 22,000
Freight-out (delivery expense) .................................................... 17,100
Cash discounts on purchases ........................................................ 6,800

What is Donovan’s total cost of inventory purchased for 2022?

Instructions

Answer each of the preceding questions about inventories, and explain your answers.

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Units Unit Cost May 9 2,000 €22 17 3,500 23 26 1,000 24