Looking for some serious help in
accounting assignment. I needed honest
and willing to meet my dead line. Instruction
as following questions using grammatically correct
language and appropriate APA citations. All questions need to be answer and with APA citations. The book that used is
Accounting Principles: A Business perspective, Financial Accounting text,
read: Chapter 8 “Measuring and Reporting Inventories, pages 359-395. Question 7 is about Periodic or Perpetual. There are some hints and
suggestions for certain questions in this assignment.
Explain why proper inventory valuation is so important to the
calculation of a company's "bottom line" net income.
What is the meaning of taking a physical inventory and why is it
important to take a physical inventory when using a perpetual inventory system.
Explain the accountant's role regarding taking a physical
Hints/Suggestion: To respond to the Proficient-level questions,
review section 8.5 of the text, with emphasis on the each of the four inventory
valuation methods covered: Specific Identification,
FIFO, LIFO, and Weighted Average. Then,
review the second third full paragraph on page 381
What is the cost flow assumption?
What is meant by the physical flow of goods?
What relationship exists between cost flows and the physical
flow of goods in a company?
Hints feel free to use the following response: “Getting goods (physically) ready to sell
should relate to the needs of the specific inventory item. Perishables should physically be sold on the
FIFO basis. Accordingly, merchandisers
of perishables will rotate their stock, selling the oldest units first
(FIFO). However, non-perishables, such
as piles of coal, could be sold on the LIFO basis.”
To place the proper valuation on inventory, a business must
determine which costs should be included in inventory cost. Getting goods ready
to sell should include what items?
Identify and describe each of the four most commonly used
inventory valuation methods. What are the main advantages of each method?
Identify the main disadvantages of each inventory valuation
Proficient: Hints- A word of
advice: You cannot use the costs
determined in the various exhibits of calculations of COGS in each of the four
individual methods presented in the text because the costs presented in those
exhibits are not constantly rising cost.
If inventory is being valued at cost and the price level is steadily
rising, which of the following three methods of costing—FIFO, LIFO, or weighted
average cost—will yield the lowest annual after tax net income?
Which method will yield the highest after tax net income in a
scenario where the price level is steadily declining?
Which of the three methods of inventory will in general yield an
inventory cost most nearly approximating current replacement cost?
Some circumstances justify departures from the historical cost
approaches of FIFO, LIFO, and weighted average cost. Several additional
inventory methods may be used when circumstances warrant. Identify and describe
each of these alternative methods. Include an example of when each method may
Identify which methods could be used to determine whether there
has been shrinkage or shortage in the physical inventory.
Identify and describe the ratio that can be used to analyze a
What does the ratio measure? What are the components of the
ratio? How is the ratio computed?
How does a company know if the results of the calculation are
helping or hurting the company's financial health?
make sure you compute and use the “average inventory” as is shown in the
demonstration problem in section 8.7 of the text
Given the following information, calculate the inventory
turnover for Lincoln Company, a large grocery
store chain. Evaluate the trend results.
-2014: Cost of goods sold—$1,043,000; Beginning
inventory—$283,000; Ending inventory—$264,000.
-2013: Cost of goods sold—$820,000; Beginning
inventory—$311,000; Ending inventory—$283,000.
Cripple Creek Hardware
Store currently uses a periodic inventory system. Hoyt Braxton, the owner, is
considering the purchase of a computer system that would make it feasible to
switch to a perpetual inventory system. Hoyt is unhappy with the periodic
system because it does not provide timely information on inventory levels.
Hoyt has noticed on
several occasions that the store runs out of good-selling items, while too many
poor-selling are on hand. Hoyt is also concerned about lost sales while a
physical inventory is being taken. The store currently takes a physical
inventory twice a year. To minimize distractions, the store is closed on the
day inventory is taken.
Hoyt believes that
closing the store is the only way to get an accurate count. You have been brought in to assess the
situation and provide expert advice on which course of action to take—remain
with the current periodic inventory system or switch to a perpetual inventory
system. Present your findings to Hoyt, discussing whether switching to a
perpetual inventory system will strengthen Cripple Creek Hardware's control
over inventory items and eliminate the need for a physical inventory count.