Question

# For the weighted-average method, round calculations to two decimal places. If required, round your final answers...

For the weighted-average method, round calculations to two decimal places. If required, round your final answers to the nearest cent.

Instructions:

For the weighted-average method, round calculations to two decimal places. If required, round your final answers to the nearest cent.

1. Calculate the total amount to be assigned to the ending inventory under each of the following periodic inventory methods.

2. Assume that the market price per unit (cost to replace) of Stalberg's inventory on December 31, 20--, was \$26. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods.

3. What journal entry would be made under lower-of-cost-or-market for parts 2(a) FIFO and 2(b) Weighted-average? If no entry is required, type "No entry required" in the account name box and leave the amount boxes blank or enter "0".

Stalberg Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows:

 Units Unit Price Total Cost Jan. 1 Beginning inventory 10 \$21 \$210 Mar. 5 1st purchase 10 22 220 Sept. 9 2nd purchase 10 25 250 Dec. 8 3rd purchase 10 30 300 40 \$980

There are 10 units of inventory on hand on December 31.

Inventory Valuation

For the weighted-average method, round calculations to two decimal places. If required, round your final answers to the nearest cent.

1. Calculate the total amount to be assigned to the ending inventory under each of the following periodic inventory methods:

a. FIFO
\$

b. Weighted-average
\$

2. Assume that the market price per unit (cost to replace) of Stalberg's inventory on December 31, 20--, was \$26. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

a. FIFO lower-of-cost-or-market
\$

b. Weighted-average lower-of-cost-or-market
\$

 1. a. FIFO \$300.00 b. Weighted average \$245.00
 Working: Units Unit Price Total Cost Jan. 1 Beginning inventory 10 21 210 Mar. 5 1st purchase 10 22 220 Sept. 9 2nd purchase 10 25 250 Dec. 8 3rd purchase 10 30 300 40 980 Weighted average cost 24.50 Ending inventory 10 units Last purchase 10 units @\$30 per unit Inventory value under FIFO = 10 x 30 = \$300 Inventory value under weighted average = 10 x 24.50 = \$245

2.

 a. FIFO --- lower of cost -or - market = \$260.00 b. Weighted average -- lowe-of-cost or market = \$245.00

Working:

 2. Market price as at December 31, 20-- is \$26.00 Market value of the inventory = 10 x \$26 = \$260.00

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