Need Help

Need by 6:00 am in about 3 hours. Please answer questions P6-40B including requirements and P6-42B including requirements. If can not be done by 6am then will give until 8 am. Thank you

0-4′
Merchandise Inventory 343

00Accounting for inventory using the perpetual system-FIFO, LIFO, and
average cost; comparing FIFO, LIFO, and average cost [20-25 min]
Ornamental Iron Works began January with 45 units of iron inventory that cost
$24 each. During January, the company completed the following inventory transactions:

Units Unit Cost Unit Sale Price

Jan 3 Sale 3S
8 Purchase…………….. 70

21 Sale 6S
30 Purchase…………….. 25

$32

$47

$51

$73

Bat

P6-41B

Requirements
1. Prepare a perpetual inventory record for the inventory using FIFO.
2. Prepare a perpetual inventory record for the inventory using LIFO.
3. Prepare a perpetual inventory record for the inventory using average cost.
4. Determine the company’s cost of goods sold for January using FIFO, LIFO, and

average cost.
5. Compute gross profit for January using FIFO, LIFO, and average cost.

eApplying the lower-of-cost-or-market rule to inventories [5 min]
Rocky Bayou Golf Clubs, which uses the FIFO method, has the following account
balances at July 31, 2012, prior to releasing the financial statements for the year:
Inventory Cost of goods sold Sales revenue

—– —

I 1__ 1
Rocky Bayou has determined that the replacement cost (current market value) of the
July 31, 2012, ending inventory is $13,000.

Requirements
1. Prepare any adjusting journal entry required from the information given.
2. What value would Rocky Bayou report on the balance sheet at July 31, 2012, for

8 inventory?P6-42B 0Correcting inventory errors over a three-year period [15-20 min]Peaceful Carpets’ books show the following data. In early 2013, auditors found that
the ending inventory for 2010 was understated by $4,000 and that the ending inven-
tory for 2012 was overstated by $5,000. The ending inventory at December 31,
2011, was correct.

2012 2011 2010

Net sales revenue ………. $201,000 $161,000 $176,000
Cost of goods sold: ………

Beginning inventory ….. $ 22,000 $ 25,000 $ 38,000
Net purchases ………. 130,000 104,000 92,000
Cost of goods available … $152,000 $129,000 $130,000
Ending inventory ……. (31,000) (22,000) (25,000)
Cost of goods sold …… 121,000 107,000 105,000

Gross profit ………….. $ 80,000 $ 54,000 $ 71,000
Operating expenses …….. 56,000 26,000 35,000
Net income …………… $ 24,000 $ 28,000 $ 36,000

Requirements
1. Prepare corrected income statements for the three years.
2. State whether each year’s net income-before your corrections-is understated

or overstated and indicate the amount of the understatement or overstatement.