PROBLEM 1

Shown below is the activity for one of the products of Silent Creations: January 1 balance, 90 units @ $40, $3,600:

Purchases:

March 17: 50 units @ $41

March 28: 50 units @ $42

Sales:

March 12: 40 units

March 22: 40 units

March 31: 55 units

Requirements:

Using Excel, create schedules to show Beginning Inventory, Cost of Goods Available for Sale, Cost of Goods Sold, and Ending Inventory for Silent Creations under all the following scenarios:

1. Assume Silent Creations uses FIFO periodic inventory system.
2. Assume Silent Creations uses FIFO perpetual inventory system.
3. Assume Silent Creations uses LIFO periodic inventory system.
4. Assume Silent Creations uses LIFO perpetual inventory system.
5. Assume Silent Creations uses Average Cost periodic inventory system.
6. Assume Silent Creations uses Average Cost perpetual inventory system.

You MUST use formulas in all possible places. Make sure you use professional formatting and professional presentation similar to previous exams and exercises. (Hint: Use the print preview to see what your schedules look like before submitting).

Nature Lovers Nursery has developed the following data for lower of cost or market for its products. The individual types of trees are separated as to their categories:

	Selling Price	Cost	Cost to Replace
Broad leaf trees:
Ash	$1,800	$1,000	$800
Beech	2,200	1,600	1,400
Needle leaf trees:
Cedar	$2,500	$1,750	$1,800
Fir	3,600	3,350	3,200
Fruit trees:
Apple	$1,800	$1,400	$1,300
Cherry	2,300	1,800	1,700

The costs to sell are 10% of the selling price, and the normal profit margin on all trees is 20% of the selling price.

Required: Use Excel to create a schedule to solve the situation below. Use pages 461-466 as a guide. You must use formulas in all possible places and format in a business professional manner similar to what we have been doing in class.

• Determine the reported inventory value assuming the lower of cost or market rule is applied to individual tree products.

• Determine the reported inventory value assuming the lower of cost or market rule is applied to categories of trees.

• Determine the reported inventory value assuming the lower of cost or market rule is applied to the total inventory.