Problem #4: Inventory Review Problem: A. Ironside Co. reported the following data for its purchases and sales of inventory during 2022 below on the left. On the right, the company reports the effect of each transaction on the inventory ledger account: Date 10/1 10/18 10/30 11/10 11/21 Transaction Purchased 12,000 units @ $15 Purchased 7,500 units @ $16 12/5 Sold 20,000 units 12/27 Purchased 5,000 units @ $19 1. Sold 11,900 units Purchased 15,000 units @ $18 Purchased 12,000 units @ $17.50 2. 3. Purchases Purchase Discounts Freight-in 180,000 121,128 Other notes: LIFO reserve has a credit balance of $75 the beginning of the period The estimated selling price was $21 at year end with selling costs of $1.50, both per unit. The expected gross profit of the inventory is $9 a unit. The current replacement cost of inventory is $19. 269,745 212,990 20x8 $600,000 Inventory LIFO reserve 97,119 ??? 10,000 2,000 Inventory Provide COGS assuming a LIFO perpetual cost method and a FIFO perpetual cost method (you're solving for the ??? amounts because the reduction to inventory is the same as COGS). Provide the adjustment required to LIFO reserve if the company uses FIFO for its internal record- keeping and reports its financial results in LIFO. Provide the test required to determine the lower of cost or market/NRV for both LIFO and FIFO methods. Is a write-down required? (note: you're assessing the entire inventory for write-down). ??? B. We worked through this problem in class. But it is a good one to revisit. Riker Corp. uses a periodic system of inventory and reports the following balances in its accounts for the years ending 20x7 and 20x8 prior to closing its nominal (temporary) inventory accounts: ??? 20x7 $650,000 9,000 1,000 Riker also has the following information regarding its real (permanent) inventory accounts from its ledger (all provided after the periodic COGS adjustment has been made and nominal accounts are closed). 12/31/x7 12/31/x8 $102,500 13,000 $95.000 6,500 1. What amount of inventory would Riker record on its balance sheet at 12/31/x8, 12/31/x7? 2. Determine the cost of goods sold for Riker Corp. during 20x8.

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Problem #4: Inventory Review Problem: A. Ironside Co. reported the following data for its purchases and sales of inventory during 2022 below on the left. On the right, the company reports the effect of each transaction on the inventory ledger account: Transaction Purchased 12,000 units @ $15 Date Inventory 10/1 180,000 10/18 Purchased 7,500 units @ $16 121,128 10/30 Sold 11,900 units 222 11/10 Purchased 15,000 units @$18 269,745 11/21 Purchased 12,000 units @ 212,990 $17.50 12/5 Sold 20,000 units ??? 12/27 Purchased 5,000 units @ $19 97.119 ??? Other notes: LIFO reserve has a credit balance of $75 the beginning of the period The estimated selling price was $21 at year end with selling costs of $1.50, both per unit. The expected gross profit of the inventory is $9 a unit. The current replacement cost of inventory is $19. 1. Provide COGS assuming a LIFO perpetual cost method and a FIFO perpetual cost method (you're solving for the ??? amounts because the reduction to inventory is the same as COGS). 2. Provide the adjustment required to LIFO reserve if the company uses FIFO for its internal record- keeping and reports its financial results in LIFO. 3. Provide the test required to determine the lower of cost or market/NRV for both LIFO and FIFO methods. Is a write-down required? (note: you're assessing the entire inventory for write-down). B. We worked through this problem in class. But it is a good one to revisit. Riker Corp. uses a periodic system of inventory and reports the following balances in its accounts for the years ending 20x7 and 20x8 prior to closing its nominal (temporary) inventory accounts: Purchases Purchase Discounts Freight-in 20x8 $600,000 10,000. 2,000 20x7 $650,000 9,000 1,000 Riker also has the following information regarding its real (permanent) inventory accounts from its ledger (all provided after the periodic COGS adjustment has been made and nominal accounts are closed). Inventory LIFO reserve 12/31/x8 $102,500 13,000 12/31/x7 $95,000 6,500 1. What amount of inventory would Riker record on its balance sheet at 12/31/x8, 12/31/x7? 2. Determine the cost of goods sold for Riker Corp. during 20x8. Problem #4: Inventory Review Problem: A. Ironside Co. reported the following data for its purchases and sales of inventory during 2022 below on the left. On the right, the company reports the effect of each transaction on the inventory ledger account: Transaction Purchased 12,000 units @ $15 Date Inventory 10/1 180,000 10/18 Purchased 7,500 units @ $16 121,128 10/30 Sold 11,900 units 222 11/10 Purchased 15,000 units @$18 269,745 11/21 Purchased 12,000 units @ 212,990 $17.50 12/5 Sold 20,000 units ??? 12/27 Purchased 5,000 units @ $19 97.119 ??? Other notes: LIFO reserve has a credit balance of $75 the beginning of the period The estimated selling price was $21 at year end with selling costs of $1.50, both per unit. The expected gross profit of the inventory is $9 a unit. The current replacement cost of inventory is $19. 1. Provide COGS assuming a LIFO perpetual cost method and a FIFO perpetual cost method (you're solving for the ??? amounts because the reduction to inventory is the same as COGS). 2. Provide the adjustment required to LIFO reserve if the company uses FIFO for its internal record- keeping and reports its financial results in LIFO. 3. Provide the test required to determine the lower of cost or market/NRV for both LIFO and FIFO methods. Is a write-down required? (note: you're assessing the entire inventory for write-down). B. We worked through this problem in class. But it is a good one to revisit. Riker Corp. uses a periodic system of inventory and reports the following balances in its accounts for the years ending 20x7 and 20x8 prior to closing its nominal (temporary) inventory accounts: Purchases Purchase Discounts Freight-in 20x8 $600,000 10,000. 2,000 20x7 $650,000 9,000 1,000 Riker also has the following information regarding its real (permanent) inventory accounts from its ledger (all provided after the periodic COGS adjustment has been made and nominal accounts are closed). Inventory LIFO reserve 12/31/x8 $102,500 13,000 12/31/x7 $95,000 6,500 1. What amount of inventory would Riker record on its balance sheet at 12/31/x8, 12/31/x7? 2. Determine the cost of goods sold for Riker Corp. during 20x8.