RQ21-11 (similar to) Question Help Incuded in the December 31, 2016, inventory o
ID: 2550620 • Letter: R
Question
RQ21-11 (similar to) Question Help Incuded in the December 31, 2016, inventory of the Top Dog Supply Company are 2 200 deluxe ring binders in the amount of $6,590. An examination of the most recent acquisitions of binders showed the following costs: January 26 2017, 1,900 at $3.08 each, December 6, 2016, 1,800 at $2.96 each, November 26, 2016, 2,000 at $2.78 each. What is the misstatement in valuation of the December 31, 2016, inventory for deluxe ring binders, assuming FIFO inventory valuation? What would your answer be if the January 26, 2017, acquisition was for 1,900 binders at $2 84 each? What is the misstatement in valuation of the December 31, 2016, inventory for deluxe ring binders, assuming FIFO inventory valuation? Assuming FIFO inventory valuation, the December 31, 2016 inventory balance for deluxe ring binders should be As such, the ending inventory balance of $6,590 at December 31, 2016 is by Choose trom any ist or enter any number in the impu heds and then cick check Answer Check Answer part remainig Clear All O Type here to search
Explanation / Answer
Inventory purchases (before Dec31, 2016) 6-Dec 1800 units 2.96 26-Nov 2000 units 2.78 Inventory Ending in hand: 2200 units Ending inventory: 6-Dec 1800 units 2.96 5328 26-Nov 400 units 2.78 1112 Correct valuation as pe FIFO 6440 As per FIFO, the December 31, 2016 valuation for deluxe ring binders shall be $ 6440 As such Ending inventory of $6590 is overstated by $ 150 The answer to above will not change for a change in Jan prices. the Inventory valuation for Dec31, 2016 will be $ 6440 The ending inventory is overstated by $ 1500
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