MultipleChoice (1.8points each)

The 2022inventory data forRoseCorporation is presented below. Assume thatRoseusesperiodicinventory tracking.

2022Beginning Inventory(purchased in 2021)		400 units @ $24per unit
Purchases:
Purchase 1 on 2/1/22		1,000 units @ $26per unit
Purchase 2 on6/12/22		600 units @ $30per unit
Sales:
Sale 1 on 3/5/22		900 units @ $50 per unit
Sale 2 on9/15/22		800 units@ $50 per unit

WhenRoseexamines the actual units in ending inventory, they see that100 of the units are from 2022beginning inventory,140 units are from the 2/1/22purchase, and 60 units are from the6/12/22purchase.

1.What isInventoryon the 12/31/22Balance Sheet ifRoseusesFIFO?

a.$7,200

b.$9,000

c.$44,600

d.$46,400

2.What isCost of Goods Soldon the 2022Income Statement ifRoseusesLIFO? a.$7,200

b.$9,000

c.$44,600

d.$46,400

3.What isInventoryon the 12/31/22BalanceSheetifRoseusesSpecific Identification?

a.$7,840

b.$9,000

c.$45,760

d.$46,400

4.What isGrossProfiton the 2022Income Statement ifRoseusesWeightedAverage Cost?a.$8,040

b.$39,440

c.$45,560

d.$76,960

5.SnuggleCorporationuses a periodic inventory system.WhenSnuggle'smanagercountsitsinventory on December 31, 2021, he accidentally forgets to count one pile ofblankets, resulting in 2021ending inventory beingunderstatedby $160,000.The managercountsthe December 31, 2022inventory correctly.Which of the following statements is true related toSnuggleCorporation's2021and 2022financial statements?

a.2021Cost of Goods Sold will be understated by $160,000.

b.2022BeginningInventory will be overstated by $160,000.

c.2022Cost of Goods Sold will be understated by $160,000.

d.Both a and b are true.e.All of the above are true.

6.In a period of rising prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory?

a.FIFO

b.LIFO

c.Weighted Average Cost

d.Cannot tell without more information

7.On January 29, 2022,RenoCorporation sold and shipped merchandise toArt, Inc. for $800,000 on credit. Goods were shippedFOBshipping pointand arrived atArtwarehouse on February 2. Which of the following statements istrue?

a.Art, Inc. includes the $800,000 as part of its January 31 Inventory balance.

b.RenoCorporation includes the $800,000 as part of its January 31 Inventory balance.

c.The goods are in transit on January 31 so neither company includes the $800,000 as part of its January 31 Inventory balance.

d.Both companies include the $400,000 as part of their January 31 Inventory balances.

Use Whirlpool' most recent financial statements to answer the following three questions.

8.Which inventory cost flow assumption does Whirlpool use to value its inventories in North America?

a.LIFO

b .FIFO

c.Weighted Average Cost

d.Specific Identification

9.What is the most likely reason that Whirlpool chose this inventory cost flow assumption in North America(given rising price trend)?

a.To report higher Net Income on its Income Statement.

b.To pay less taxes.

c.To report higher Total Assets on its Balance Sheet.

d.Both a and c are true.

10.Which of the following statements about Whirlpool isTRUE?

a.Fiscal year 2021 Gross Profit > Fiscal year 2020 Gross Profit.

b.Fiscal year 2021 COGS Fiscal year 2020 COGS.

c.Fiscal year 2020 Gross Profit Fiscal year 2019 Gross Profit.

d.Fiscal year 2020 Operating Income > Fiscal year 2019 Operating Income.e.Both a and d are true.

Problem (32points)

PlumCompanyuses a PERIODIC inventory system.Plumhad the following inventory purchases and sales during 2022:

2022Beginning Inventory (bought in 2021)		50 units @ $80 per unit
Purchases:
Purchase1on2/10/22		140 units @ $96per unit
Purchase2 on8/7/22		60 units @ $100per unit
Sales:
Sale 1 on3/4/22		80 units @ $220 per unit
Sale 2 on9/5/22		130 units @ $220 per unit

Of the units soldon 3/4/22,50unitswerefrom thebeginning inventoryand30unitswerefrom the2/10/22purchase. The 9/5/22sale included90unitsfrom the 2/10/22purchase and40unitsfrom the8/7/22purchase.

Show howPlum's Balance Sheet and Income Statement would look under each of the inventory cost flow assumptions.Compute Ending Inventory, Sales, COGS, and GrossProfitunder Specific Identification,WeightedAverage Cost, FIFO and LIFO. Fill in your answers on the table below.SHOW YOUR WORK.Round per unit cost to the nearest cent.

		Specific Identification		WeightedAverage		FIFO		LIFO
12/31/22Balance Sheet
Inventory
2022Income Statement
Sales
Cost of Goods Sold
GrossProfit

Whirlpool Corporation's Financial Statements (partial)

Consolidated Income Statements In millions of dollars
		Year endedDec 31, 2021		Year endedDec 31, 2020		Year endedDec 31, 2019
Net Sales		$21,985		$19,456		$20,419
Cost of goods sold		17,576		15,614		16,908
Selling, general, and administrative expenses		2,061		2,227		1,962

Consolidated Balance Sheets In millions of dollars
ASSETS		As of Dec 31, 2021		As of Dec 31, 2020
Cash and cash equivalents		$3,044		$2,924
Accounts receivable, net		3,100		3,109
Inventories		2,717		2,301
Prepaid and other current assets		834		795
Total current assets		$ 9,695		$ 9,129

Notes to Consolidated Financial Statements (partial)

Footnote 1. Summary of Significant Accounting Policies

1.1 Description of Business

Whirlpool Corporation, a Delaware corporation, manufactures products in 10countries and markets products in nearly every country around the world under brand names such asWhirlpool, KitchenAid, Maytag, Consul,Brastemp, Amana, Bauknecht,JennAir, Indesit,YummlyandHotpoint. We conduct our business through four operating segments, which we define based on geography. Whirlpool Corporation's operating and reportable segments consist of North America;Europe, Middle East and Africa ("EMEA");Latin America and Asia.

1.12Inventories

North America and EMEA reporting segments use thefirst-in, first-out ("FIFO")method of inventory valuation. Latin America and Asia inventories are stated at average cost.Costs include materials, labor and production overhead at normal production capacity. Costs do not exceed net realizable values.

3