Question

1. Yardbirds Enterprises is planning to invest $36,000 each year for eight years. What will be...

1. Yardbirds Enterprises is planning to invest $36,000 each year for eight years. What will be the value of the investment at the end of eight years if the company can earn 8%?

2. The following information pertains to April 2019 for Eddington Enterprises:

Beginning inventory 10 units @ $1,000 per unit
First purchase 25 units @ $1,400 per unit
Second purchase 25 units @ $1,800 per unit
Ending inventory 20 units

Using LIFO, determine the total cost of the ending inventory.

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Homework Answers

Answer #1

1.Future value of annuity=Annuity[(1+rate)^time period-1]/rate

=36000[(1.08)^8-1]/0.08

=36000*10.6366276

=$382918.59(Approx)

2.Goods sold=Beginning inventory+Purchases-Ending inventory

=10+25+25-20=40 units

As per LIFO;ending inventory=10 units @$1000 each+10 units@$1400 each

=$24000

NOTE:As per LIFO;goods purchased last are sold off first.Hence 40 units sold would consist of 25 units of second purchases and the balance=(40-25)=15 units of first purchases.

Hence 20 units of ending inventory would consist of =(25-15)=10 units of first purchases and 10 units of beginning inventory.

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