Exercise 9-3
Michael Bolton Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.
| Item No. | | Quantity | | Cost per Unit | | Cost to Replace | | Estimated Selling Price | | Cost of Completion and Disposal | | Normal Profit |
| 1320 | | 1,600 | | | $4.35 | | | $4.08 | | | $6.12 | | | $0.48 | | | $1.70 | |
| 1333 | | 1,300 | | | 3.67 | | | 3.13 | | | 4.76 | | | 0.68 | | | 0.68 | |
| 1426 | | 1,200 | | | 6.12 | | | 5.03 | | | 6.80 | | | 0.54 | | | 1.36 | |
| 1437 | | 1,400 | | | 4.90 | | | 4.22 | | | 4.35 | | | 0.34 | | | 1.22 | |
| 1510 | | 1,100 | | | 3.06 | | | 2.72 | | | 4.42 | | | 1.09 | | | 0.82 | |
| 1522 | | 900 | | | 4.08 | | | 3.67 | | | 5.17 | | | 0.54 | | | 0.68 | |
| 1573 | | 3,400 | | | 2.45 | | | 2.18 | | | 3.40 | | | 1.02 | | | 0.68 | |
| 1626 | | 1,400 | | | 6.39 | | | 7.07 | | | 8.16 | | | 0.68 | | | 1.36 | |
From the information above, determine the amount of Bolton Company inventory.
Exercise 9-7
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 | Your answer is correct. |
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Phil Collins Realty Corporation purchased a tract of unimproved land for $52,000. This land was improved and subdivided into building lots at an additional cost of $27,000. These building lots were all of the same size but owing to differences in location were offered for sale at different prices as follows.
| Group | | No. of Lots | | Price per Lot |
| 1 | | 9 | | | $4,050 | |
| 2 | | 18 | | | 5,400 | |
| 3 | | 21 | | | 2,700 | |
Operating expenses for the year allocated to this project total $17,400. Lots unsold at the year-end were as follows.
| Group 1 | | 5 lots |
| Group 2 | | 7 lots |
| Group 3 | | 3 lots |
At the end of the fiscal year Phil Collins Realty Corporation instructs you to arrive at the net income realized on this operation to date.
(Round ratios for computational purposes to 4 decimal places, e.g. 78.7234% and final answer to 0 decimal places, e.g. 5,845.)
Exercise 9-12
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| Your answer is correct. |
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Mark Price Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.
| Inventory, May 1 | | $ 164,900 |
| Purchases (gross) | | 642,600 |
| Freight-in | | 31,100 |
| Sales revenue | | 1,034,400 |
| Sales returns | | 72,500 |
| Purchase discounts | | 12,480 |
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales.
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of cost.
(Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.)
Exercise 9-19
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| Your answer is correct. |
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Presented below is information related to Ricky Henderson Company.
| | Cost | | Retail |
| Beginning inventory | | $ -10,040 | | $ 288,700 |
| Purchases | | 1,514,000 | | 2,143,000 |
| Markups | | | | 91,600 |
| Markup cancellations | | | | 16,700 |
| Markdowns | | | | 43,500 |
| Markdown cancellations | | | | 7,700 |
| Sales revenue | | | | 2,285,000 |
Compute the inventory by the conventional retail inventory method.
(Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)Exercise 9-21
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| Your answer is correct. |
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The financial statements of
ConAgra Foods, Inc.’s 2012 annual report disclose the following information.
| (in millions) | | May 27, 2012 | | May 29, 2011 | | May 30, 2010 |
| Inventories | | $1,870 | | $1,803 | | $1,598 |
| | | | Fiscal Year |
| | | | 2012 | | 2011 |
| Net sales | | | | $13,263 | | $12,303 |
| Cost of goods sold | | | | 10,436 | | 9,390 |
| Net income | | | | 474 | | 818 |
Compute ConAgra’s (a) inventory turnover and (b) the average days to sell inventory for 2012 and 2011.
(Round times to 1 decimal place, e.g. 7.6 and all other answers to 0 decimal places, e.g. 65.)
Solution: UMUC ACC310 Chapter 9 Homework -