$[$FIFO$,$ LIFO, AC Methods$]$

At the beginning of the current period, Q Corp carried $2,000$ units of its product with a unit cost of $\backslash (\backslash$$ $30\backslash ).$

A summary of inventory purchases during the current period follows.

$1$ Assume that the Q Corp uses the first$-$in$,$ first$-$out $($FIFO$)$ method for $6,000$ units of sales. Compute the product's COGS for the current period and the ending inventory balance.

$2$ Assume that the Q Corp uses the last$-$in$,$ first$-$out $($LIFO$)$ method for this product. Compute the product's COGS for the current period and the ending inventory balance.

$3$ Assume that the Q Corp uses the average $\backslash (\backslash$operatorname$\{$cost$\}(\backslash$mathrm$\{$AC$\})\backslash )$ method for this product. Compute the product's COGS for the current period and the ending inventory balance. A

B

C

D

E

$\_$

F

G

H

I

J

$-$

K

L

M

N

$4$ Compute the LIFO Reserve $(=$ FIFO Ending Balance $-$ LIFO Ending Balance$).$

$[$FIFO$,$ LIFO, AC Methods: Q$5-$ Q$8]$

Assume that Fey Company reports the following initial balance and subsequent purchase of inventory. Assume that $4,000$ units are sold during the year.

$5$ What amount is reported for cost of goods sold and inventory on the year$-$end balance sheet using the FIFO method?

$6$ What amount is reported for cost of goods sold and inventory on the year$-$end balance sheet using the LIFO method?

$7$ What amount is reported for cost of goods sold and inventory on the year$-$end balance sheet using the average cost method?

$[$FIFO $\backslash$& LIFO: $\backslash$#$9-\backslash$#$12]$ The January $28,2017($fiscal year $2016)$ financial statements of CFS reported the following information $($in millions$)$ under the LIFO method.

$9$ If CFS had used the FIFO method of inventory costing, $2016$ inventory would have been:

Hint: FIFO Inventory $\backslash (=\backslash )$ LIFO inventory $+$ LIFO reserve

$10$ If CFS had used the FIFO method of inventory costing, $2016$ COGS would have been:

Hint: LIFO COGS $=$ FIFO COGS $+$ Increase in LIFO reserve A

B

C

D

E

F

G

H

I

J

K

L

M

N

$11$ Calculate the inventory turnover ratio $(=$ COGS $/$ Average inventory$)$ under LIFO for $2016.$

$12$ The $2016$ average days inventory outstanding under LIFO is:

$[$Depreciation: Q$13-$ Q$16]$ K Corp. has recorded straight$-$line depreciation on a machine for $4$ years that K Corp. purchased $4$ years ago for $\backslash (\backslash$$ $110,000\backslash ).$

The expected salvage value of the machine is $\backslash (\backslash$$ $10,000\backslash )$ at the end of its estimated useful life of $10$ years. The tax rate is $\backslash (30\backslash \%\backslash )$

$13$ Compute the annual depreciation expense under the straight$-$line depreciation method.

$14$ Compute the cumulative depreciation expenses of the machine for the four years.

$15$ Compute the current net book$-$value of the machine.

$16$ K Corp. decides to dispose the machine at the end of $5$th year. Compute the tax credit$/$loss from the sale of the machine if the sales price of the machine is:

$16$ K Corp. decides to dispose the machine at the end of $5$th year. Compute the tax credit$/$loss from the sale of the machine if the sales price of the machine is:

i$)$ Same as the machine's net book value:

ii$)\backslash (\backslash$$ $80,000\backslash )$ :

iii$)\backslash (\backslash$$ $65,000\backslash )$ :

$17$ HP purchased a new machine costing $\backslash (\backslash$$ $33,000\backslash )$ on January $1,2017.$ The machine is expected to have a $\backslash (\backslash$$ $3,000\backslash )$ salvage value at the end of its useful life of $6$ years. What is the depreciation expense that Howell Corporation records for $2017$ using the straight$-$line method?