Revenge and Delay in Hamlet Essay Example for Free

Vengeance and Delay in Hamlet Essay The Tragedy of Hamlet, Prince of Denmark by William Shakespeare is one of his most compelling disasters recounting to the narrative of unfairness, vengeance and good debasement. The play is about Prince Hamlet who looks to get payback on his uncle Claudius for killing his King Hamlet, Claudius’s sibling. Hamlet’s father at that point succeeds the seat and takes as his significant other Gertrude, the old King’s Widow and Prince Hamlet’s father. â€Å"As doth well show up unit our state, But to recoup of us by solid †(1. 1. 01-102) These word by Horatio, Prince Hamlet’s dear companion uncovers to the peruser one of the essential topics in this play, the requirement for vengeance, by Hamlet as well as by Fortinbras, the Prince of Norway and Claudius through Laertes. Their feelings, contemplations and activity are powered by their hankering for retribution and as the three vengeance plots interlace, it is uncovered that the idea of retribution isn't straightforward yet confused as the peruser sees Hamlets internal battle to make a move, and his failure to decide. see more:conflict in villa The uncertainty, faltering and postponement are what make the plot stand apart from other vengeance stories. The principle plot in the play is that of Hamlet who is visited by the Ghost of his dad instructing him to retaliate for his demise. Hamlet’s reaction was â€Å"Hast me to know’t, that I, with wings as quick, As reflection or the contemplations of adoration, May clear to my revenge† (1. 5. 29-31)Sets the plot for vengeance yet later he is seen having his questions as communicated in the line â€Å"Fie upon’t, foh! About, my minds! † (2. 2. 574). After Hamlet builds up Claudius’ blame, by arranging the homicide of Gonzago he gets the chance to slaughter the unattended Claudius in his chamber yet permits this open door go in the wake of soliloquizing the issue and saying that executing Claudius won't be vengeance as he will go to paradise. All through the play he is intelligent and thoughtful and postpones the second as long as he can. He is later ousted when he unintentionally slaughters Polonius. After another visit by his father’s phantom he decides. He comes back to Denmark and in a fencing match that results, he figures out how to execute both Laertes and Claudius despite the fact that he kicks the bucket from the injury he got from the Poisoned tip of Laertes blade. Claudius then again, utilizes Laertes as instrument to do his arrangement to execute Hamlet. Laertes is blinded by the need of retribution such he would take the necessary steps to achieve this decisively at all. Claudius exploits this circumstance and it’s very clear in the accompanying lines: â€Å"Laertes, was your dad dear to you? Are you like the painting of a sorrow† (4. 7. 05-107) and â€Å"To show your father’s child in deedmore than in words? † (4. 7. 123-124) Laertes answers: â€Å"To ferocious i’the church. † (4. 7. 125)Claudius develops this thirst and his capacity to act carelessly which drives him in a fencing match with Hamlet. This transforms into a bleeding finishing and at last prompts Hamlet and Claudiusà ¢â‚¬â„¢ passing. Fortinbras, the ruler of Norway needs to retaliate for the demise of his dad by making so huge a military that would over the Danish armed force. He is a solid willed pioneer portrayed as â€Å"Hot and full† (1. 1. 96), with a propensity to act thoughtlessly rather than Hamlets persistent faltering postponement. While Hamlet is mulling over on the issues of life, demise and profound quality of vengeance, Fortinbras is out to vanquish lands. Be that as it may, he additionally tunes in to his companion Horatio who advices him to hold up before he assaults Denmark. This permits him at long last to accomplish his retaliation without doing a lot. Hamlet himself thinks about Fortinbras a model of significance, as he passed him with his military he comments, â€Å"To be extraordinary, isn't to mix without incredible contention yet to discover fight in a straw, When honor’s at the stake. † (4. 4. 52-55) Fortinbras isn't disturbed a lot with contemplations and rushes to make a move to protect his family’s respect. Taking everything into account it very well may be said that the primary explanation Hamlet bombs on his crucial retribution is because of his wavering somewhat brought by his own weakness and incompletely because of his inward clash with the ethical viewpoint, all things considered, Laertes comes up short since he rushes to move vigorously without cautious thought of the current circumstance. Fortinbras then again, succeeds in light of the fact that despite the fact that he rushed to make a move, he tunes in to his uncle’s counsel. At long last, this shows the peruser the significance of reasoning unmistakably, reasonably and adhering to our standards before taking any activities.

Nursing Leadership for Increase in Productivity -myassignmenthelp

Question: Talk about theNursing Leadership for Increase in Productivity. Answer: Quiet security in medicinal services is of vital significance in nursing practice in a wide range of social insurance settings. Administration in nursing is significant in light of the fact that the pioneer sets focuses for the nursing staff and aides them on the most proficient method to find a way to accomplish the objective of conveying quality consideration and guaranteeing most ideal results for patients. The nursing chief needs to work together and successfully convey to the group the basic need to convey care in a way that guarantees understanding security. The authority style ought to rouse the staff to give safe social insurance in all circumstances. Persistent security is characterized as the decrease of danger of pointless damage related with social insurance to a worthy least. It is additionally characterized as counteraction of any wounds and harms to patients during the consideration procedure (Hemmat, Atashzadeh-Shoorideh, Mehrabi, Zayeri, 2015). The medical attendant chief assumes a significant job in keeping the nursing workforce focussed on improving the nature of patient consideration. So as to improve execution they may receive one of the various styles of initiative. Three principle styles of initiative have been examined for their adequacy in improving patient wellbeing, in this paper, to be specific, the transformational style, the value-based style and the Laissez faire style of administration. The effect of executing each style on the patient security results has been talked about. Additionally talked about is the impact of the transformational style of authority on the counteraction of falls among patients. One of the administration styles that a medical caretaker pioneer can embrace to improve persistent wellbeing is the transformational style. Distinctive authority styles vary in their methodology in how the pioneer persuades the nursing staff to give the most ideal consideration to the patients. Authority styles fluctuate dependent on the methodology received by a medical attendant chief. The transformational style of administration is related with an expansion in staff fulfillment, there is an expanded duty towards the association, staff scores better in prosperity, there is diminished pressure, in this manner an increment in profitability and successful working are watched (Cope Murray, 2017). This sort of initiative encourages a situation where the subordinates become the teammates and along these lines, this style of nursing can be progressively viable in conveying medicinal services where endeavors are being made to improve persistent wellbeing. In an investigation at a clinic in Ethiopia, an examination was done to decide the favored style of authority in a poll that posed inquiries about whether they favored the value-based style of initiative over the transformational style. The transformational style of initiative helps the subordinates by giving them what can be accomplished. The transformational authority attempts to rouse and move, The medical caretakers w ho took an interest in the investigation favored the transformational style of administration over the value-based style of initiative and determined more noteworthy occupation fulfillment (Negussie Demissie, 2013). In a comparative report completed at private medical clinics at Jordan, the workers favored the transformational style of administration and revealed better natural employment fulfillment (Mohammad, Al-Zeaud, Batayne, 2011). An improvement in the territory of employment fulfillment is a decent forerunner to guaranteeing persistent security. It has been discovered that transformational administration prompts better patient results and there is a decrease in the quantity of unfriendly occasions when this style of authority is embraced (Wong Cummings, 2007). A roused and enlivened nursing workforce is bound to make progress toward persistent security. The value-based way to deal with administration can work in an organized framework. The value-based style of authority includes compensating execution in substantial or elusive structures. Instances of remuneration could change from monetary compensation to applaud during a gathering meeting. The style fuses dynamic administration that includes discovering shortcoming and calling attention to slip-ups of the subordinates. Frequently value-based authority favorably affects quiet wellbeing. The value-based methodology is regularly determined by targets and there is a danger of under detailing of missteps made during release of obligations. This can be impeding to tolerant wellbeing. Whenever botches are seen as chances to adapt instead of chances to rebuff there is more prominent possibility that the staff will hold fast to moral practice. The Laissez faire style of authority in nursing the board the pioneer remains somewhat reserved from the gathering and mediates just if there is a need. It is an aloof style of the board and the director mediates just if there is an issue. Less oversight is practiced by the medical attendant supervisors who receive this style. The nursing staff needs to perform all alone, with no administrative sources of info. It is a decent style if advancement of free reasoning is the objective, however it might prompt undesirable results, especially concerning significant patient results, for example, quiet security. Numerous restorative choices that might be required at significant points are left to the staff. Improvement in quality happens just when passes with respect to staff happen. Nursing chiefs who are new to their activity or the individuals who are anticipating a replacement typically receive this style(Bradley.edu, 2016). This style of administration is known to advance the way of lif e of fault since nobody needs to assume liability. At the point when this effect is contrasted and that of the transformational style, the last is greatly improved with regards to tolerant fulfillment, less drug mistakes and lower pace of clinic gained contaminations are reported(Bradley.edu, 2016). In an examination on the effect of authority style on quiet security, it was construed that the transformational style is more favored than the Laissez faire style of initiative in nursing the executives (Merrill, 2015). This style of administration is tormented by insufficiencies in taking choices and intercessions are generally responses to penetrate in understanding wellbeing. Fall anticipation, especially among the slight and the old patients is a significant part of patient security. In an investigation on association of workshops to diminish the quantity of falls among patients so as to improve the general nature of patient wellbeing and care, it was seen that since the transformational administration style was embraced, the effect on decrease was sure. Because of interest in the workshop, the medical attendants were roused and enlivened to lessen the quantity of falls and they made every single preventive step required for the counteraction of falls and decreased occurrence was accounted for. These workshops were given by the charge attendants utilizing the transformational style of initiative (White, 2016). Since the jobs of the subordinate attendants are plainly characterized, they were spurred and motivated to improve tolerant results and diminish antagonistic occasions, on estimation of the result it was discovered that less falls were accounted fo r. The achievement in diminishing falls through the transformational style of initiative happen through the scholarly incitement, individualized thought and through helpful inspiration of staff. The transformational style of administration encourages a workplace that gives medical attendants adequate self-sufficiency and responsibility, backing, assets and openings that they can utilize to enhance frameworks to lessen the occurrence of falls among the patients(Bradley.edu, how-nursing-initiative styles-can-affect understanding results and-authoritative execution/). Decreasing rate of falls and improved patient wellbeing can be accomplished through selection of better administration styles. In this, taking everything into account, it is essential to comprehend the effect of administration style on expanding tolerant security in human services offices. Nursing supervisors may receive various styles of administration. This paper examinations the transformational, value-based and the Laissez faire styles of initiative. While the Laissez faire style of authority has been seen as less favored because of a somewhat adhoc approach at taking care of issues. There is no component of value control since arrangements are looked for simply after an issue has happened. The value-based style of authorities depends on the prize and discipline of the medical caretakers and the chief watches out for the results of the work execution of the considerable number of attendants. The transformational style of administration is increasingly favored on the grounds that the pioneer rouses and motivates and the nursing staff is quick to improve quiet results. In an examination a workshop went bef ore by a program for fall counteraction, the medical caretakers were given clear objectives and they prevailing with regards to lessening the pace of falls. In this way, transformational style of initiative has been seen as progressively successful in improving patient wellbeing.

Is travel insurance really necessary

Is travel insurance really necessary Make Money Online Queries? Struggling To Get Traffic To Your Blog? Sign Up On (HBB) Forum Now! Is travel insurance really necessary? Updated On 22/11/2019 Author : Ram kumar Topic : Business Short URL : https://hbb.me/37rRrpI CONNECT WITH HBB ON SOCIAL MEDIA Follow @HellBoundBlog We are exposed to risks all the time, everywhere. While we take all measures to protect and secure our house, car and properties, we tend to forget that we are prone to risks even while travelling.   A travel insurance is an insurance that covers any damage expenses caused during travel. From baggage going missing to your wallet being stolen, the insurance covers a range of risks. To travel with a peace of mind, having a travel insurance is your go-to choice. There are several risks involved in travelling if you are not careful. Some of the most common risks are: You might have to cancel your trip unexpectedly â€" you might have planned your trip to the minutest details, but might have to cancel it due to some personal issues or other problems. Getting a refund on your tickets and so on might be difficult if you do not have an insurance.The destination you are off to can be hit by a natural disaster â€" cyclones, floods, earthquakes, you never know what could happen when. In such cases, you might have to figure a way out and shell a little extra money out of your pocket to get back home. This is where your travel insurance comes into place.There could be a sudden terrorist event at your destinationYou could fall sick or get physically injured when you are travelling â€" travelers are prone to sickness due to weather changes, or a pre-existing flu in the region and could even be food poisoning.Your luggage can get lost or stolen while travelling â€" this is a very common problem amongst many travelers. Most of them tend to forget or misplace t heir luggage at airports and other stops and have a difficult time getting it back and might have to spend more to regain the losses.You could lose your passport while travelling â€" this is the riskiest thing that can happen to you. Your passport is your ticket to enter and exit from one country. Loss of passport can cause a lot of trouble for you. A travel insurance has clauses that will help you with the financial aspects of getting your passport. .IRPP_button , .IRPP_button .postImageUrl , .IRPP_button .centered-text-area { min-height: 86px; position: relative; } .IRPP_button , .IRPP_button:hover , .IRPP_button:visited , .IRPP_button:active { border:0!important; } .IRPP_button { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #3498DB; } .IRPP_button:active , .IRPP_button:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .IRPP_button .postImageUrl { background-position: center; background-size: cover; float: right; margin: 0; padding: 0; width: 30%; } .IRPP_button .centered-text-area { float: left; width: 70%; padding:0; margin:0; } .IRPP_button .ctaText { border-bottom: 0 solid #fff; color: inherit; font-size: 13px; font-weight: bold; letter-spacing: .125em; margin: 0; padding: 0; } .IRPP_button .postTitle { color: #ECF0F1; font-size: 16px; fon t-weight: 600; margin: 0; padding: 0; width: 100%; } .IRPP_button .ctaButton { background: #ECF0F1; color: inherit; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; margin: 18px 14px 18px 14px; moz-border-radius: 3px; padding: 12px 0; text-align: center; text-decoration: none; text-shadow: none; webkit-border-radius: 3px; width: 80px; position: absolute; } .IRPP_button:hover .ctaButton { background: #e6e6e6; } .IRPP_button .centered-text { display: table; height: 86px; padding:0; margin:0; padding-left: 108px!important; top: 0; } .IRPP_button .IRPP_button-content { display: table-cell; margin: 0; padding: 0; padding-right: 10px; position: relative; vertical-align: middle; width: 100%; } .IRPP_button:after { content: "; display: block; clear: both; } READBusiness is BoomingWhile being cautious is the best way to prevent these mishaps from happening, we cannot always have control over everything that happens to us. Taking preve ntive measures is extremely important so that we don’t pay the costs for them later. While a lot of travelers take time to plan and execute their trip, they fail to pick up a good travel insurance. The next time you are off to travel, don’t forget to purchase an overseas travel insurance policy for yourself. There are also group insurances that you can take if you are travelling with people. There are several limitations and exclusions that you need to be aware of before buying your insurances. Most importantly, it is important to note that while one travel insurance policy might work well for a particular company, it might not for the other. There are different travel insurances such as Schengen travel insurance, US travel insurance and so on. Ensure you take a well informed decision when choosing your travel insurance.

Qué es el programa de Comunidades Seguras

Comunidades Seguras es un programa del gobierno federal de colaboracià ³n con autoridades locales y estatales para identificar inmigrantes para proceder a su remocià ³n inmediata de los Estados Unidos o al inicio de un procedimiento de deportacià ³n. Las razones por las que el migrante puede verse en ese problema pueden ser variadas, desde estar en el paà ­s como indocumentado a haber cometido violaciones migratorias o delitos o  faltas penales. En este artà ­culo se explica cà ³mo funciona este programa, por quà © tiene fieros defensores y crà ­ticos, cuà ¡l es la relacià ³n de Comunidades Seguras con las ciudades santuario y quà © se puede hacer. Cmo funciona el programa Comunidades Seguras El funcionamiento es realmente sencillo. En Estados Unidos cuando una persona es arrestada o detenida se le toman las huellas digitales, conocidas en algunos paà ­ses como dactilares. A continuacià ³n esa informacià ³n se le envà ­a al FBI. El FBI las compara contra varias bases de datos, por ejemplo, IAFIS, donde està ¡n fichadas personas con pasado delictivo. Ademà ¡s, las compara con bases de datos de otras agencias como IDENT, del Departamento de Seguridad Interna (DHS, por sus siglas en inglà ©s) en la que se guarda toda la informacià ³n disponible sobre inmigrantes, sobre criminales y sobre personas consideradas terroristas o sospechosas de serlo. Asimismo, tambià ©n se comparan esas huellas dactilares con la base de datos  de los oficiales de migracià ³n, como por ejemplo US-VISIT, con las que controlan los  pasos fronterizos terrestres, puertos y aeropuertos. Si el resultado es que la persona es inmigrante y tiene rà ©cord criminal o una orden de deportacià ³n pendiente o se sospecha que està ¡ en el paà ­s ilegalmente entonces se considera que se produce un  ¨hit ¨. Aclarar que se puede creer que una persona està ¡ como indocumentada tanto porque no aparece rà ©cord de su ingreso legal y se cree que es extranjera o porque es evidente que ingresà ³ legalmente pero no ha salido a tiempo.   Si se produce ese  ¨hit ¨, es decir, una coincidencia de interà ©s para Inmigracià ³n, entonces el FBI lo notifica tanto a la autoridad que tiene a la persona arrestada o detenida como al Centro de Apoyo para el Cumplimiento de la Ley (LESC, por sus siglas en inglà ©s), que es un departamento dentro de ICE. A partir de ahà ­, ICE analiza la situacià ³n y decide, segà ºn lo que considere prioritario, quà © hacer. Puede decidir emitir un detainer, tambià ©n conocido como hold. Esto quiere decir que se solicita que se retenga al detenido por 48 horas mà ¡s a partir del dà ­a que deba ser liberado, con el objetivo de darle tiempo al ICE de hacerse cargo. En ese plazo de 48 horas no se incluyen sà ¡bados, domingos ni feriados. Ademà ¡s, en la actualidad los detainer van acompaà ±ados de una orden (warrant, por su nombre en inglà ©s), que pueden ser de dos clases: para remocià ³n/deportacià ³n o para arresto. A partir de ahà ­, si la autoridad que recibe el detainer decide cumplirlo, entregarà ¡ al detenido a las autoridades migratorias, que segà ºn el caso, procederà ¡n a su deportacià ³n inmediata o iniciarà ¡n  un procedimiento judicial de deportacià ³n. Argumentos a favor y en contra de Comunidades Seguras Los defensores de este programa consideran que es una gran herramienta para deportar a migrantes, particularmente los que tienen un historial como  criminales violentos.   Sin embargo, un estudio de Transactional Records Access Clearinghouse de la Universidad de Syracuse argumenta que en la actualidad no hay datos pà ºblicos de cuà ¡ntos detainers se emiten y que no està ¡ nada claro cuà ¡ntos son causa de deportacià ³n. Es mà ¡s, aseguran que solamente un porcentaje mà ­nimo de las deportaciones tienen su origen en un detainer emitido dentro del marco de Comunidades Seguras. Entre los argumentos en contra de Comunidades Seguras se citan, entre otros, que rompe la confianza entre la policà ­a y la comunidad y hace que muchos delitos no se reporten. Ademà ¡s, se afirma que da lugar a la deportacià ³n elevada de inmigrantes con rà ©cord criminal limpio, cuyo à ºnico problema es que està ¡n en el paà ­s como indocumentados. Finalmente, tambià ©n se aduce que Comunidades Seguras es un gasto excesivo para las municipalidades. Lo cierto es que este programa ha tenido un historial conflictivo. Fue creado en el aà ±o 2008 por el presidente George W. Bush en el condado de Harris en Texas y de ahà ­ se extendià ³ progresivamente por todo el paà ­s, incluidos sus territorios como por ejemplo Puerto Rico, bajo el mandato de Obama. Bajo ese presidente se establecieron prioridades en su aplicacià ³n y, finalmente, se suspendià ³ su aplicacià ³n. Sin embargo, la llegada de Donald Trump a la Casa Blanca supuso su activacià ³n mediante orden ejecutiva del 25 de enero de 2017. En la actualidad sigue siendo un programa muy criticado, que causa miedo entre la comunidad migrante y que ha dado lugar a oposicià ³n de municipios e incluso estados en la forma de lo que se conoce como ciudades santuario. Qu son las ciudades santuario y cmo se relacionan con el programa Comunidades Seguras Uno de los temas migratorios mà ¡s controvertidos y debatidos en los Estados Unidos es el de las ciudades santuario, a las que sus crà ­ticos acusan de no cumplir con las leyes migratorias.   Para entender este asunto lo primero es saber de quà © realmente se està ¡ hablando. Hay que partir de que no hay una definicià ³n legal de lo que es una ciudad santuario, pero puede entenderse como tal a aquella  jurisdiccià ³n -estado, condado o ciudad, que limita su colaboracià ³n con las autoridades federales en materia de inmigracià ³n. Ese là ­mite puede estar declarado pà ºblicamente o puede ser algo que simplemente ocurre, es decir, es un asunto informal. En cuanto a las formas que puede tomar la falta de colaboracià ³n, à ©stas pueden ser muy variadas. Por ejemplo, la prohibicià ³n de que un funcionario pà ºblico municipal pregunte sobre el estatus migratorio de una persona. Otro ejemplo comà ºn es el de no compartir informacià ³n sobre datos en los que conste la situacià ³n de indocumentado de un migrante como es el caso de la Ciudad de Nueva York que no comparte lo que sabe sobre los solicitantes del I.D. de la ciudad. Pero quizà ¡ el ejemplo mà ¡s conocido y el que levanta mà ¡s crà ­ticas y que està ¡ directamente relacionado con el programa de Comunidades Seguras  es el de no cumplir con las peticiones de deteiners que emite el ICE solicitando a otra jurisdiccià ³n que retenga, por un plazo de 48 horas, a un migrante que tiene arrestado o detenido por otro asunto no relacionado con temas migratorios. Algunas ciudades santuario incumplen los deteiners siempre mientras que otras los ejecutan cuando el objeto del deteiner es un inmigrante con un delito en su rà ©cord.   En la actualidad, segà ºn el Inmigrant Legal Resource Center, hay mà ¡s de 300 jurisdicciones que en algà ºn grado pueden ser consideradas como ciudades santuario y han sido amenazadas con la retirada de fondos federales, en particular de subvenciones del Departamento de Justicia. Sin embargo, no es seguro de que se pueda aplicar este castigo y en la fecha en la que se escribe este artà ­culo està ¡ inmerso en una batalla legal de la que se desconoce cà ³mo puede finalizar. Qu se puede hacer Lo cierto es que estamos viviendo una à ©poca que causa gran ansiedad entre la comunidad migrante. Los residentes permanentes deberà ­an considerar convertirse en ciudadanos mediante naturalizacià ³n y evitar cualquier tipo de problemas que pueden dar lugar a su deportacià ³n. Los extranjeros con visa deben conocer los tà ©rminos de la misma y evitar violaciones migratorias. Y en cuanto a los migrantes indocumentados deben informarse sobre si existe alguna posibilidad real para arreglar su situacià ³n, deben conocer sus derechos si son parados por la autoridad y no mostrar ninguna documentacià ³n que pueda dar lugar a revelar que estatus, como por ejemplo la matrà ­cula consular. Finalmente, es siempre aconsejable que tengan a mano el telà ©fono de un abogado migratorio u organizacià ³n de apoyo a inmigrantes de confianza para comunicarse en el caso de problemas. Estar informados es siempre la mejor arma para estar preparados, defender los derechos que se tienen y evitar ser và ­ctimas de fraude por parte de personas inescrupulosas que toman ventaja de la situacià ³n de miedo en la que muchos migrantes viven en la actualidad. Este artà ­culo es informativo. No es asesorà ­a legal para ningà ºn caso en particular.

Wild Rumpus Is An Award Winning Children s Bookstore

Wild Rumpus is an award-winning children’s bookstore in the Linden Hills neighborhood of South Minneapolis. Wild Rumpus offers its customers a shopping experience that is unique and near unmatchable. As kids wander the store, browsing countless books of all shapes and sizes, they may encounter one or more of the store’s twelve pet animals. Cats, birds, and even a chinchilla roam throughout the store to give youngsters from all over the Twin Cities metro a fun and unique experience that will have them begging their parents to bring them back. The versatile bookstore also hosts book clubs, organizes field trips, and many more fun activities for people of all ages. Wild Rumpus’ core strength of maintaining a one-of-a-kind and immersive†¦show more content†¦The distinctive interior design within the store instills a â€Å"book-brought-to-life† impression that pulls you in as you walk further into the store. According to Collette Morgan, one of the Wi ld Rumpus owners, the goal of the design was to provide a space that did not condescend to kids by using primary colors and overly-childish decor, but rather to create an experience comfortable for the â€Å"littlest through the biggest. This atmosphere is even further enhanced by perhaps the most singularly distinguishing feature of this children’s bookstore; the menagerie of animals dwelling between the shelves. The bookstore industry in the US is comprised of a mix of a few large chain bookstores such as Barnes and Noble and many smaller, private and/or family owned businesses. As far as market size goes, the bookstore industry accumulated approximately $14 billion in annual revenue last year, according to IBIS. The overall industry has been experiencing a decline over the last decade, largely as a consequence of the growing trend of e-commerce, and is expected to continue this trend. Many bookstores have tried to capitalize on the new trend by offering e-readers and e-books. Although there are a few large chain bookstores, such as Barnes and Noble, Wild Rumpus competes more heavily with smaller, more local bookstores. Since they specialize in children’s books, their competitors are also more narrowly

Rhetorical Essay - 687 Words

Rhetorical Analysis of the Anti-Smoking Advertisements Joshua Martinez DeVry University ENG-112-64585 Anti-smoking advertisements occasionally pop up throughout our society which is often showing the viewers the harmful effects of tobacco through startling images. This advertisement uses the elements of ethos, pathos, and logos in order to make people rethink about smoking. The video advertisement uses children to make a point across by showing real scenarios on the effects of smoking. It shows that the commonplace for smoking, in today’s time, is acceptable for teenagers to smoke and jump to an assumption that children are starting to try it. Once the children are introduced into this advertisement pathos is†¦show more content†¦Another woman brings up to a little girl how smoking can increase your risk of aging. This advertisement shows logos into play. Logos is shown when it is stating the reasoning on why children should not start smoking. Pathos is also shown when the adults state the reason why one should not pick up a cigarette. The different kind of effects c reates a sense of fear and avoidance of the product. When the adults finish talking to the children, the children hands them a paper and leave. One can notice in that scene that the kids did not want to smoke but wanted see if they knew the consequences of smoking. The message the children gave to them states, â€Å"You worry about me, but why not about yourself? Reminding yourself is the most effective warning to help you quit. Call 1800 hotline to quit smoking.† This makes the viewer think on why people smoke. The smokers were shocked to read it, but none of them threw away the brochures. They knew what the logic thing to do. This reminded people that they could influence everyone to stop smoking through the influence of the children. We know that smoking is bad and what ingredients they put in a cigarette, but why do people still do it. This advertisement was called by many throughout the internet, â€Å"the best anti-smoking ad ever†. This campaign filmed children walking up to adult smokers, asking them for a light. Every adult took the opportunity to remind the childrenShow MoreRelatedRhetorical Analysis Template Essay659 Words   |  3 Pagesï » ¿Profile Process Planning Sheet: Analyzing the Rhetorical Situation Week 1 Assignment Please answer the following questions in complete sentence and paragraph format. Although this is not a formal essay assignment, please note that proper spelling, grammar, and sentence structure are required. This week’s lecture and Chapters 2 and 3 in your text will help you work through some of the terms within the rhetorical situation. Defining Topic, Angle, Purpose 1. What is your chosen topic? (For example:Read MoreRhetorical Essay : Using Rhetoric958 Words   |  4 PagesUsing rhetoric to make an argument has been very crucial to my writing in the past couple of months. From Project 1 to Project 3, I learned to form my sentences using rhetorical strategies to make my argument. In the project 1, my use of rhetoric was above average in my opinion. My essay responded to the question of what good writing is. I used clear sentences and many examples to make my point. To explain the idea that good writing has no rules, I used the unstructured format of Whitehead’s textRead MoreRhetorical Analysis Of Alexander Pope s An Essay1310 Words   |  6 PagesAn essay is, generally, a piece of writing that gives the author s own argument — but the definition is vague, overlapping with those of an article, a pamphlet, and a short story. Essays have traditionally been sub-classified as formal and informal. Formal essays are characterized by serious purpose, dignity, logical organization, length, whereas the informal essay is characterized by the personal element (self-revelation, individual tastes and experiences, confidential manner), humor, gracefulRead MoreRhetorical Analysis of Video Game Violence Essay1753 Words   |  8 Pagesï » ¿ In my most recent essay I wrote of the violence attributed to video games in light of various shootings and other tragedies that occurred in the past year or so. In this essay I argued that despite their violent content, video games are not completely to blame for acts of violence committed by children. Throughout this essay I tried to convince the reader by, first, establishing my own credibility with video games, then sharing my own experiences with violent games, and providing both empiricalRead MoreCom/155 Appendix C Rhetorical Modes Essay1750 Words   |  7 PagesAppendix C Rhetorical Modes Matrix Rhetorical modes are methods for effectively communicating through language and writing. Complete the following chart to identify the purpose and structure of the various rhetorical modes used in academic writing. Provide at least 2 tips for writing each type of rhetorical device. |Rhetorical Mode |Purpose – Explain when or why |Structure – Explain what organizational |Provide 2 tips for writing in | | |each rhetorical mode is usedRead MoreThe Tipping Point: Rhetorical Analysis Essay813 Words   |  4 PagesThe Tipping Point: Rhetorical Analysis Throughout The Tipping Point, Malcolm Gladwell explains to his reader his ideas about drastic changes in society, and how they seem to occur so rapidly. In this particular selection, Gladwell emphasizes the purpose of â€Å"connectors†, saying that they have a â€Å"special gift for bringing the world together (page 38)†. Gladwell states that part of the reason information or trends spread like wildfire is the presence of a specific group of people. They are called â€Å"connecters†Read MoreRhetorical Analysis of Ellen DeGeneress Commencement Speech Essay1144 Words   |  5 Pages Ellen’s Commencement Speech Rhetorical Analysis Graduation caps fly into the air, cheers erupt, and diplomas are received. This is a typical graduation day. Not only did these ceremonial events take place for Tulane Universitys class of 2009, but Ellen DeGeneres was there to congratulate them as well! This class was dubbed the Katrina Class for being survivors of the devastating Hurricane Katrina in 2005. Katrina was named one of the deadliest Hurricanes, causing more than 1,836Read MoreRhetorical Analysis Essay1401 Words   |  6 PagesDevi Thapa LLD 100A October 22, 2017 Rhetorical Analysis of Social and Personality Development in Childhood article http://nobaproject.com/modules/social-and-personality-development-in-childhood Introduction Rhetorical analysis is important because it breaks down the writing into parts and then explains how different each parts work together effectively in relation to the topic, audience and purpose. In this rhetorical analysis assignment, I analyzed Ross Thompson’s 2017 article, â€Å"SocialRead MoreRhetorical Analysis Essay1480 Words   |  6 Pagesâ€Å"Shitty First Drafts† by Anne Lamott, is a hilarious must read for junior high school students and any other aspiring writers. Her essay inspires comfort and confidence in writing a first draft. It concretes that all writers experience the â€Å"shitty† first draft. Anne Lamott wrote this instructional information in 1995, but it is timeless information. She blows the idea of writing an immaculate first draft out of the water. Anne supports the idea that bad first drafts will almost always lead to betterRead MoreRhetorical Analysis Essay848 Words   |  4 Pagesï » ¿January 13th 2012 AP English Rhetorical Analysis Essay #3 Final Draft Every individual has traditions passed down from their ancestors. This is important because it influences how families share their historical background to preserve certain values to teach succeeding generation. N. Scott Momaday has Native American roots inspiring him to write about his indigenous history and Maxine Hong Kingston, a first-generation Chinese American who was inspired by the struggles of her emigrant family

Satire Essay free essay sample

Satire is typically intended to be comical although its greater purpose is often constructive social criticism, using wit as a weapon and as a tool to draw attention to both particular and wider issues in society. In particular it aims to expose its audience to the nature of the political atmosphere by exploring the trivial and self-serving nature of governmental objectives. Rob Sitch’s television programme The Hollowmen ironically depicts the shallow values of contemporary Australian politics that appear to altruistically appease the stipulations of individuals and society. While The Ambassador reveals the skewed, self-serving nature of politics, Rear Vision conveys the duplicitous, impressionable practicality that overwhelms the proper political process. Similarly Reitman’s movie Thank You For Smoking controversial issues are brought to light, the way smoking is perceived in and by society as well as the inner workings of the government and how their authority and decisions can be swayed or negated by large corporations with smooth talking lobbyists. However enough said on our amazing president. Obama Care is the main miracle that gives ordinary Americans critical preventive services for free, that were originally out of pocket costs. Obama Care, the health insurance program that gives Americans preventive services for free. What a blessing! You would think. It is a miracle that Obama Care is practically free because in a study led by the Congressional Budget Office(CBO), it stated that 2. 5 million citizens are anticipated to lose their jobs by 2024 because of Obama Care. Isnt it a blessing that Obama Care is free! Obama Care is also free to the 42 million Americans that are living in poverty because of Obama. Isnt that what we wanted. Another interesting fact to people that love Obama Care, before Obama Care people could choose what vaccination they wanted to take or not, the people had the choice, but now if you dont take certain vaccinations like a flu shot you will be fined. Thats great you dont have a choice in what you want to take, instead if you do not take the vaccination you will be fined. Obama Care also forced trillions of dollars in dept down our throats, while legislators did not even get a chance to read the bill before it was passed. Thats great Obama makes all the decisions for the people we dont have to worry about what will happen, lets just sit back like usual and let our amazing government make our decisions for us. This is starting to sound a little bit like communism but it is all marvelous, we dont have to make any decisions anymore. Obama Care has impacted many lives of ordinary Americans young and old, wealthy and poor. Some impacts are introduced in many interviews of random individuals, too give an idea of what Obama Care really is becoming. Obama Care will impose new compliance regulations, employer mandate taxes, and numerous indirect costs on small, and medium-size companies. For Scott Womack, the owner of a dozen IHOP restaurants in Indiana and Ohio, these are obstacles that will most likely prevent him from expanding his business and hiring new employees. Ann Lorenz a senior citizen relies on Medicare as she copes with serious health care challenges, including Parkinsons Disease. Ann sees a number of doctors and depends on a variety of prescription drugs and therapies to stay independent. She worries that Obama Care threatens her access to doctors, treatment options and insurance plans. This mainly exemplified that Obama Care does not cover her doctor bills that she needs to pay or she would be at risk of not obtaining her prescriptions, but it is all great there are other doctors that are covered by Obama Care you can change your health care. Obama care will discourage the uninsured from seeking coverage and cause the insured to lose the coverage they currently have. The uninsured also can not afford their bills including those who are in poverty, they will be fined if they can not afford their monthly low cost bill. Its amazing that the government forces you to obtain a health insurance but if you can not afford it you will be fined. People can not afford a place to stay or food to eat. Those people are then forced to take on an insurance policy that they also can not afford so they will get fined because they can not pay their bill. So, then the government will look to the middle class people to pay those bills through taxes. These taxs are then sent into the governments coffers as well as the money they fined the poor individual. The president of the United States makes a total of $400,000 a year through taxes. This is a very high starting salary I am shore he will have no problem paying for his health insurance policy. But oh wait Obama is exempt from this health insurance as well as congress! It is so great that even the government did not want to be a part of it.

Intermediate Accounting Ch 8 Essay Example

Intermediate Accounting Ch 8 Paper CHAPTER 8 Valuation of Inventories: A Cost-Basis Approach ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Inventory accounts; determining quantities, costs, and items to be included in inventory; the inventory equation; balance sheet disclosure. Perpetual vs. periodic. Recording of discounts. Inventory errors. Flow assumptions. 10, 11 7 12, 13, 16, 18, 20 4 5, 6, 7 Questions 1, 2, 3, 4, 5, 6, 8, 9 Brief Exercises 1, 3 Exercises 1, 2, 3, 4, 5, 6, 10 Problems 1, 2, 3 Concepts for Analysis 1, 2, 3, 5, 11 2. 3. 4. 5. 2 , 13, 14, 17 7, 8 2, 3, 4, 5, 10, 11, 12 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 18 4, 5, 6 3 2 1, 4, 5, 6, 7 5, 6, 7, 8 4 6. 7. Inventory accounting changes. Dollar-value LIFO methods. 14, 15, 17, 18, 19 8, 9 7 1, 8, 9, 10, 11 6, 7, 10 8, 9 23, 24, 25, 26 8-1 ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE) Learning Objectives 1. 2. 3. 4. 5. Identify major classifications of inventory. Distinguish between perpetual and periodic inventory systems. Identify the e ffects of inventory errors on the financial statements. Understand the items to include as inventory cost. Describe and compare the cost flow assumptions used to account for inventories. Explain the significance and use of a LIFO reserve. Understand the effect of LIFO liquidations. Explain the dollar-value LIFO method. Identify the major advantages and disadvantages of LIFO. Understand why companies select given inventory methods. 8, 9 22, 23, 24, 25, 26 1, 8, 9, 10, 11 Brief Exercises 1 2 4 1, 3 5, 6, 7 4, 9, 13, 16, 17, 18, 20 5, 10, 11, 12 1, 2, 3, 4, 5, 6, 7, 8 13, 14, 15, 16, 17, 18, 19, 20, 22 21 1, 2, 3 1, 4, 5, 6, 7 4, 5, 6 Exercises Problems 6. 7. 8. . 10. 8-2 ASSIGNMENT CHARACTERISTICS TABLE Level of Difficulty Moderate Moderate Simple Simple Moderate Simple Simple Simple Moderate Simple Simple Moderate Moderate Moderate Moderate Moderate Simple Simple Moderate Simple Moderate Moderate Simple Simple Moderate Moderate Moderate Moderate Simple Complex Complex Moderate Moderate Moderate Time (minutes) 15–20 10–15 10–15 10–15 15–20 10–20 10à ¢â‚¬â€œ15 20–25 15–25 10–15 10–15 15–20 15–20 20–25 15–20 15–20 10–15 15–20 15–20 10–15 10–15 25–30 5–10 15–20 20–25 15–20 30–40 25–35 20–25 40–55 40–55 25–35 30–40 30–40 Item E8-1 E8-2 E8-3 E8-4 E8-5 E8-6 E8-7 E8-8 E8-9 E8-10 E8-11 E8-12 E8-13 E8-14 E8-15 E8-16 E8-17 E8-18 E8-19 E8-20 E8-21 E8-22 E8-23 E8-24 E8-25 E8-26 P8-1 P8-2 P8-3 P8-4 P8-5 P8-6 P8-7 P8-8 Description Inventoriable costs. Inventoriable costs. Inventoriable costs. Inventoriable costs—perpetual. Inventoriable costs—error adjustments. Determining merchandise amounts—periodic. Purchases recorded net. Purchases recorded, gross method. Periodic versus perpetual entries. Inventory errors, periodic. Inventory errors. Inventory errors. FIFO and LIFO—periodic and perpetual. We will write a custom essay sample on Intermediate Accounting Ch 8 specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Intermediate Accounting Ch 8 specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Intermediate Accounting Ch 8 specifically for you FOR ONLY $16.38 $13.9/page Hire Writer FIFO, LIFO and average cost determination. FIFO, LIFO, average cost inventory. Compute FIFO, LIFO, average cost—periodic. FIFO and LIFO; periodic and perpetual. FIFO and LIFO; income statement presentation. FIFO and LIFO effects. FIFO and LIFO—periodic. LIFO effect. Alternate inventory methods—comprehensive. Dollar-value LIFO. Dollar-value LIFO. Dollar-value LIFO. Dollar-value LIFO. Various inventory issues. Inventory adjustments. Purchases recorded gross and net. Compute FIFO, LIFO, and average cost—periodic and perpetual. Compute FIFO, LIFO, and average cost—periodic and perpetual. Compute FIFO, LIFO, and average cost—periodic and perpetual. Financial statement effects of FIFO and LIFO. Dollar-value LIFO. 8-3 ASSIGNMENT CHARACTERISTICS TABLE (Continued) Item P8-9 P8-10 P8-11 CA8-1 CA8-2 CA8-3 CA8-4 CA8-5 CA8-6 CA8-7 CA8-8 CA8-9 CA8-10 CA8-11 Description Internal indexes—dollar-value LIFO. Internal indexes—dollar-value LIFO. Dollar-value LIFO. Inventoriable costs. Inventoriable costs. Inventoriable costs. Accounting treatment of purchase discounts. General inventory issues. LIFO inventory advantages. Average cost, FIFO, and LIFO. LIFO application and advantages. Dollar-value LIFO issues. FIFO and LIFO. LIFO Choices—Ethical Issues Level of Difficulty Moderate Complex Moderate Moderate Moderate Moderate Simple Moderate Simple Simple Moderate Moderate Moderate Moderate Time (minutes) 25–35 30–35 40–50 15–20 15–25 25–35 15–25 20–25 15–20 15–20 25–30 25–30 30–35 20–25 8-4 ANSWERS TO QUESTIONS 1. In a retailing concern, inventory normally consists of only one category, that is the product awaiting resale. In a manufacturing enterprise, inventories consist of raw materials, work in process, and finished goods. Sometimes a manufacturing or factory supplies inventory account is also included. a) Inventories are unexpired costs and represent future benefits to the owner. A statement of financial position includes a listing of all unexpired costs (assets) at a specific point in time. Because inventories are assets owned at the specific point in time for which a statement of financial position is prepared, they must be included in order that the owners’ financial position will be presented fairly. (b) Beginning and ending inventories are included in the computation of net income only for the purpose of arriving at the cost of goods sold during the period of time covered by the statement. Goods included in the beginning inventory which are no longer on hand are expired costs to be matched against revenues earned during the period. Goods included in the ending inventory are unexpired costs to be carried forward to a future period, rather than expensed. 3. In a perpetual inventory system, data are available at any time on the quantity and dollar amount of each item of material or type of merchandise on hand. A physical inventory means that inventory is periodically counted (at least once a year) but that up-to-date records are not necessarily maintained. Discrepancies often occur between the physical count and the perpetual records because of clerical errors, theft, waste, misplacement of goods, etc. 4. No. Mariah Carey, Inc. should not report this amount on its balance sheet. As consignee, it does not own this merchandise and therefore it is inappropriate for it to recognize this merchandise as part of its inventory. Product financing arrangements are essentially off-balance-sheet financing devices. These arrangements make it appear that a company has sold its inventory or never taken title to it so they can keep loans off their balance sheet. A product financing arrangement should not be recorded as a sale. Rather, the inventory and related liability should be reported on the balance sheet. (a) (b) (c) (d) (e) (f) Inventory. Not shown, possibly in a note to the financial statements if material. Inventory. Inventory, separately disclosed as raw materials. Not shown, possibly a note to the financial statements. Inventory or manufacturing supplies. 2. 5. 6. 7. This omission would have no effect upon the net income for the year, since the purchases and the ending inventory are understated in the same amount. With respect to financial position, both the inventory and the accounts payable would be understated. Materiality would be a factor in determining whether an adjustment for this item should be made as omission of a large item would distort the amount of current assets and the amount of current liabilities. It, therefore, might influence the current ratio to a considerable extent. Cost, which has been defined generally as the price paid or consideration given to acquire an asset, is the primary basis for accounting for inventories. As applied to inventories, cost means the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. These applicable expenditures and charges include all acquisition and production costs but exclude all selling expenses and that portion of general and administrative expenses not clearly related to production. Freight charges applicable to the product are considered a cost of the goods. 8-5 8. Questions Chapter 8 (Continued) 9. By their nature, product costs â€Å"attach† to the inventory and are recorded in the inventory account. These costs are directly connected with the bringing of goods to the place of business of the buyer and converting such goods to a salable condition. Such charges would include freight charges on goods purchased, other direct costs of acquisition, and labor and other production costs incurred in processing the goods up to the time of sale. Period costs are not considered to be directly related to the acquisition or production of goods and therefore are not considered to be a part of inventories. Conceptually, these expenses are as much a cost of the product as the initial purchase price and related freight charges attached to the product. While selling expenses are generally considered as more directly related to the cost of goods sold than to the unsold inventory, in most cases, though, the costs, especially administrative expenses, are so unrelated or indirectly related to the immediate production process that any allocation is purely arbitrary. Interest costs are considered a cost of financing and are generally expensed as incurred, when related to getting inventories ready for sale. 10. Cash discounts (purchase discounts) should not be accounted for as financial income when payments are made. Income should be recognized when the earning process is complete (when the company sells the inventory). Furthermore, a company does not earn revenue from purchasing goods. Cash discounts should be considered as a reduction in the cost of the items purchased. 11. $100. 00, $105. 00, $103. 00. (Transportation-In not included for discount. ) 12. Arguments for the specific identification method are as follows: (1) It provides an accurate and ideal matching of costs and revenues because the cost is specifically identified with the sales price. 2) The method is realistic and objective since it adheres to the actual physical flow of goods rather than an artificial flow of costs. (3) Inventory is valued at actual cost instead of an assumed cost. Arguments against the specific identification method include the following: (1) (2) (3) (4) The cost of using it restricts its use to goods of high unit value. The method is impractical for manufacturing processes or cases in which units are comming led and identity lost. It allows an artificial determination of income by permitting arbitrary selection of the items to be sold from a homogeneous group. It may not be a meaningful method of assigning costs in periods of changing price levels. 13. The first-in, first-out method approximates the specific identification method when the physical flow of goods is on a FIFO basis. When the goods are subject to spoilage or deterioration, FIFO is particularly appropriate. In comparison to the specific identification method, an attractive aspect of FIFO is the elimination of the danger of artificial determination of income by the selection of advantageously priced items to be sold. The basic assumption is that costs should be charged in the order in which they are incurred. As a result, the inventories are stated at the latest costs. Where the inventory is consumed and valued in the FIFO manner, there is no accounting recognition of 8-6 Questions Chapter 8 (Continued) unrealized gain or loss. A criticism of the FIFO method is that it maximizes the effects of price fluctuations upon reported income because current revenue is matched with the oldest costs which are probably least similar to current replacement costs. On the other hand, this method produces a balance sheet value for the asset close to current replacement costs. It is claimed that FIFO is deceptive when used in a period of rising prices because the reported income is not fully available since a part of it must be used to replace inventory at higher cost. The results achieved by the weighted average method resemble those of the specific identification method where items are chosen at random or there is a rapid inventory turnover. Compared with the specific identification method, the weighted average method has the advantage that the goods need not be individually identified; therefore accounting is not so costly and the method can be applied to fungible goods. The weighted average method is also appropriate when there is no marked trend in price changes. In opposition, it is argued that the method is illogical. Since it assumes that all sales are made proportionally from all purchases and that inventories will always include units from the first purchases, it is argued that the method is illogical because it is contrary to the chronological flow of goods. In addition, in periods of price changes there is a lag between current costs and costs assigned to income or to the valuation of inventories. If it is assumed that actual cost is the appropriate method of valuing inventories, last-in, first-out is not theoretically correct. In general, LIFO is directly adverse to the specific identification method because the goods are not valued in accordance with their usual physical flow. An exception is the application of LIFO to piled coal or ores which are more or less consumed in a LIFO manner. Proponents argue that LIFO provides a better matching of current costs and revenues. During periods of sharp price movements, LIFO has a stabilizing effect upon reported income figures because it eliminates paper income and losses on inventory and smooths the impact of income taxes. LIFO opponents object to the method principally because the inventory valuation reported in the balance sheet could be seriously misleading. The profit figures can be artificially influenced by management through contracting or expanding inventory quantities. Temporary involuntary depletion of LIFO inventories would distort current income by the previously unrecognized price gains or losses applicable to the inventory reduction. 14. A company may obtain a price index from an outside source (external index)—the government, a trade association, an exchange—or by computing its own index (internal index) using the double extension method. Under the double extension method the ending inventory is priced at both base-year costs and at current-year costs, with the total current cost divided by the total base cost to obtain the current year index. 15. Under the double extension method, LIFO inventory is priced at both base-year costs and currentyear costs. The total current-year cost of the inventory is divided by the total base-year cost to obtain the current-year index. The index for the LIFO pool consisting of product A and product B is computed as follows: Base-Year Cost Product Units Unit Total A 25,500 $10. 20 $260,100 B 10,350 $37. 00 382,950 December 31, 2007 inventory $643,050 Current-Year Cost Base-Year Cost = $956,460 $643,050 Current-Year Cost Unit Total $19. 00 $484,500 $45. 60 471,960 $956,460 = 148. 74, index at 12/31/07. 8-7 Questions Chapter 8 (Continued) 16. The LIFO method results in a smaller net income because later costs, which are higher than earlier costs, are matched against revenue. Conversely, in a period of falling prices, the LIFO method would result in a higher net income because later costs in this case would be lower than earlier costs, and these later costs would be matched against revenue. 17. The dollar-value method uses dollars instead of units to measure increments, or reductions in a LIFO inventory. After converting the closing inventory to the same price level as the opening inventory, the increases in inventories, priced at base-year costs, is converted to the current price level and added to the opening inventory. Any decrease is subtracted at base-year costs to determine the ending inventory. The rincipal advantage is that it requires less record-keeping. It is not necessary to keep records nor make calculations of opening and closing quantities of individual items. Also, the use of a base inventory amount gives greater flexibility in the makeup of the base and eliminates many detailed calculations. The unit LIFO inventory costing method is appli ed to each type of item in an inventory. Any type of item removed from the inventory base (e. g. , magnets) and replaced by another type (e. g. , coils) will cause the old cost (magnets) to be removed from the base and to be replaced by the more current cost of the other item (coils). The dollar-value LIFO costing method treats the inventory base as being composed of a base of cost in dollars rather than of units. Therefore a change in the composition of the inventory (less magnets and more coils) will not change the cost of inventory base so long as the amount of the inventory stated in base-year dollars does not change. 18. (a) LIFO layer—a LIFO layer (increment) is formed when the ending inventory at base-year prices exceeds the beginning inventory at base-year prices. (b) LIFO reserve—the difference between the inventory method used for internal purposes and LIFO. c) LIFO effect—the change in the LIFO reserve (Allowance to Reduce Inventory to LIFO) from one period to the next. 19. December 31, 2007 inventory at December 31, 2006 prices, $1,026,000 ? 1. 08 Less: Inventory, December 31, 2006 Increment added during 2007 at base prices Increment added during 2007 at December 31, 2007 prices, $150,000 X 1. 08 Add: Inventory at December 31, 2006 Inventory, December 31, 2007, under dollar-value LIFO method $950,000 800,000 $150,000 $162,000 800,000 $962,000 20. Phantom inventory profits occur when the inventory costs matched against sales are less than the replacement cost of the inventory. The costs of goods sold therefore is understated and profit is considered overstated. Phantom profits are said to occur when FIFO is used during periods of rising prices. High inventory profits through involuntary liquidation occur if a company is forced to reduce its LIFO base or layers. If the base or layers of old costs are eliminated, strange results can occur because old, irrelevant costs can be matched against current revenues. A distortion in reported income for a given period may result, as well as consequences that are detrimental from an income tax point of view. -8 SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 8-1 Billie Joel Company Balance Sheet (Partial) December 31 Current assets Cash Receivables (net) Inventories Finished goods Work in process.. Raw materials Prepaid insurance . Total current assets. $150,000 200,000 335,000 685,000 41,000 $1,316,000 $ 190,000 400,000 BRIEF EXERCISE 8-2 Inventory (150 X $30). Accounts Payable.. Accounts Payable (6 X $30) Inventory. Accounts Receivable (125 X $50).. Sales Cost of Goods Sold (125 X $30).. Inventory. 8-9 4,500 4,500 180 180 6,250 6,250 3,750 3,750 BRIEF EXERCISE 8-3 December 31 inventory per physical count Goods-in-transit purchased FOB shipping point Goods-in-transit sold FOB destination December 31 inventory $200,000 15,000 22,000 $237,000 BRIEF EXERCISE 8-4 Cost of goods sold as reported Overstatement of 12/31/06 inventory Overstatement of 12/31/07 inventory Corrected cost of goods sold 12/31/07 retained earnings as reported Overstatement of 12/31/07 inventory Corrected 12/31/07 retained earnings $1,400,000 (110,000) 45,000 $1,335,000 $5,200,000 (45,000) $5,155,000 BRIEF EXERCISE 8-5 $11,850 1,000 Weighted average cost per unit Ending inventory 300 X $11. 85 = Cost of goods available for sale Deduct ending inventory Cost of goods sold (700 X $11. 85) = $11. 85 $3,555 $11,850 3,555 $ 8,295 8-10 BRIEF EXERCISE 8-6 Ending inventory (April 23) 300 X $13 = $3,900 $11,850 3,900 $ 7,950 Cost of goods available for sale Deduct ending inventory Cost of goods sold BRIEF EXERCISE 8-7 April 1 April 15 Ending inventory Cost of goods available for sale Deduct ending inventory Cost of goods sold 250 X $10 = 50 X $12 = $2,500 600 $3,100 $11,850 3,100 $ 8,750 BRIEF EXERCISE 8-8 2005 2006 $123,200 ? 1. 10 = $112,000 $100,000 X 1. 00 $12,000* X 1. 10 *$112,000 – $100,000 2007 $134,560 ? 1. 16 = $116,000 $100,000 X 1. 00 $12,000 X 1. 10 $4,000** X 1. 16 **$116,000 – $112,000 8-11 $100,000 $100,000 13,200 $113,200 $100,000 13,200 4,640 $117,840 BRIEF EXERCISE 8-9 2006 inventory at base amount ($21,708 ? 1. 08) 2005 inventory at base amount Increase in base inventory 2006 inventory under LIFO Layer one Layer two $19,750 X 1. 00 $ 350 X 1. 08 $19,750 378 $20,128 2007 inventory at base amount ($25,935 ? 1. 14) 2006 inventory at base amount Increase in base inventory 2007 inventory under LIFO Layer one Layer two Layer three $19,750 X 1. 00 $ 350 X 1. 08 $ 2,650 X 1. 14 $19,750 378 3,021 $23,149 $22,750 20,100 $ 2,650 $20,100 (19,750) $ 350 8-12 SOLUTIONS TO EXERCISES EXERCISE 8-1 (15–20 minutes) Items 1, 3, 5, 8, 11, 13, 14, 16, and 17 would be reported as inventory in the financial statements. The following items would not be reported as inventory: 2. Cost of goods sold in the income statement. 4. Not reported in the financial statements. 6. Cost of goods sold in the income statement. 7. Cost of goods sold in the income statement. 9. Interest expense in the income statement. 10. Advertising expense in the income statement. 12. Office supplies in the current assets section of the balance sheet. 15. Not reported in the financial statements. 18. Short-term investments in the current asset section of the balance sheet. EXERCISE 8-2 (10–15 minutes) Inventory per physical count Goods in transit to customer, f. . b. destination Goods in transit from vendor, f. o. b. seller Inventory to be reported on balance sheet $441,000 + 38,000 + 51,000 $530,000 The consigned goods of $61,000 are not owned by Jose Oliva and were properly excluded. The goods in transit to a customer of $46,000, shipped f. o. b. shipping point, are properly excluded from the inventory because the title to the goods passed when they left the seller (Oliva) and th erefore a sale and related cost of goods sold should be recorded in 2007. The goods in transit from a vendor of $83,000, shipped f. o. b. estination, are properly excluded from the inventory because the title to the goods does not pass to Oliva until the buyer (Oliva) receives them. 8-13 EXERCISE 8-3 (10–15 minutes) 1. 2. 3. Include. Merchandise passes to customer only when it is shipped. Do not include. Title did not pass until January 3. Include in inventory. Product belonged to Harlowe Inc. at December 31, 2007. 4. Include in inventory. Under invoice terms, title passed when goods were shipped. Do not include. Goods received on consignment remain the property of the consignor. 5. EXERCISE 8-4 (10–15 minutes) 1. Raw Materials Inventory .. Accounts Payable 2. Raw Materials Inventory .. Accounts Payable No adjustment necessary. Accounts Payable .. Raw Materials Inventory. 5. Raw Materials Inventory .. Accounts Payable 19,800 19,800 7,500 7,500 28,000 28,000 8,100 8,100 3. 4. 8-14 EXERCISE 8-5 (15–20 minutes) (a) Inventory December 31, 2007 (unadjusted) Transaction 2 Transaction 3 Transaction 4 Transaction 5 Transaction 6 Transaction 7 Transaction 8 Inventory December 31, 2007 (adjusted) (b) Transaction 3 Sales.. Accounts Receivable .. (To reverse sale entry in 2007) Transaction 4 Purchases (Inventory) .. Accounts Payable .. (To record purchase of merchandise in 2007) Transaction 8 Sales Returns and Allowances. Accounts Receivable .. 2,600 2,600 15,630 15,630 $234,890 13,420 -0-08,540 (10,438) (10,520) 1,500 $237,392 12,800 12,800 8-15 EXERCISE 8-6 (10–20 minutes) 2005 Sales Sales Returns Net Sales Beginning Inventory Ending Inventory Purchases Purchase Returns and Allowances Transportation-in Cost of Good Sold Gross Profit $290,000 11,000 279,000 20,000 32,000* 242,000 5,000 8,000 233,000 46,000 2006 $360,000 13,000 347,000 32,000 37,000 260,000 8,000 9,000 256,000 91,000 2007 $410,000 20,000 390,000 37,000** 44,000 298,000 10,000 12,000 293,000 97,000 *This was given as the beginning inventory for 2006. *This was calculated as the ending inventory for 2006. EXERCISE 8-7 (10–15 minutes) (a) May 10 Purchases Accounts Payable .. ($15,000 X . 98) May 11 Purchases Accounts Payable .. ($13,200 X . 99) May 19 Accounts Payable. Cash. May 24 Purchases Accounts Payable ($11,500 X . 98). 8-16 14,700 14,700 13,068 13,068 14,700 14,700 11,270 11,270 EXERCISE 8-7 (Continued) (b) May 31 Purchase Discounts Lost . Accounts Payable ($13,200 X . 01) .. (Discount lost on purchase of May 11, $13,200, terms 1/15, n/30) EXERCISE 8-8 (a) Feb. 1 Inventory [$10,800 – ($10,800 X 10%)].. Accounts Payable.. Feb. 4 Accounts Payable [$2,500 – ($2,500 X 10%)] .. Inventory. Feb. 13 Accounts Payable ($9,720 – $2,250) .. Inventory (3% X $7,470) Cash (b) Feb. 1 Purchases [$10,800 – ($10,800 X 10%)] .. Accounts Payable.. Accounts Payable [$2,500 – ($2,500 X 10%)] Purchase Returns and Allowances Feb. 13 Accounts Payable ($9,720 – $2,250) .. Purchase Discounts (3% X $7,470). Cash 8-17 132 132 9,720 9,720 2,250 2,250 7,470 224. 10 7,245. 90 9,720 9,720 Feb. 4 2,250 2,250 7,470 224. 10 7,245. 90 EXERCISE 8-8 (Continued) (c) Purchase price (list) Less: Trade discount (10% X $10,800) Price on which cash discount based Less: Cash discount (3% X $9,720) Net price EXERCISE 8-9 (15–25 minutes) (a) Jan. 4 Accounts Receivable. Sales (80 X $8) Jan. 11 Purchases ($150 X $6).. Accounts Payable .. Accounts Receivable. Sales (120 X $8. 75). Jan. 20 Purchases (160 X $7) . Accounts Payable .. Accounts Receivable. Sales (100 X $9) Jan. 31 Inventory ($7 X 110) Cost of Goods Sold. Purchases ($900 + $1,120) . Inventory (100 X $5).. *($500 + $2,020 – $770) 770 1,750* 2,020 500 1,120 1,120 900 900 900 900 1,050 1,050 640 640 $10,800 1,080 9,720 291. 60 $ 9,428. 40 Jan. 13 Jan. 27 8-18 EXERCISE 8-9 (Continued) (b) Sales ($640 + $1,050 + $900) Cost of goods sold Gross profit Jan. 4 $2,590 1,750 $ 840 640 640 400 400 900 900 1,050 1,050 700 700 1,120 1,120 900 900 650 650 (c) Accounts Receivable .. Sales (80 X $8) . Cost of Goods Sold .. Inventory (80 X $5) .. Jan. 11 Inventory . Accounts Payable (150 X $6) Accounts Receivable .. Sales (120 X $8. 75) .. Cost of Goods Sold .. Inventory ([(20 X $5) + (100 X $6)] Jan. 13 Jan. 20 Inventory . Accounts Payable (160 X $7) . Accounts Receivable . Sales (100 X $9).. Cost of Goods Sold .. Inventory [(50 X $6) + (50 X $7)] .. Jan. 27 (d) Sales Cost of goods sold ($400 + $700 +$650) Gross profit 8-19 $2,590 1,750 $ 840 EXERCISE 8-10 (10–15 minutes) Current Year Overstated Overstated Overstated Overstated No effect Overstated* No effect No effect Overstated Overstated Overstated Overstated Subsequent Year No effect No effect No effect Understated No effect No effect No effect No effect No effect No effect No effect Understated . Working capital Current ratio Retained earnings Net income Working capital Current ratio Retained earnings Net income Working capital Current ratio Retained earnings Net income 2. 3. *Assume that the correct current ratio is greater than one. EXERCISE 8-11 (10–15 minutes) (a) $370,000 = 1. 85 to 1 $200,000 $370,000 + $22,000 – $13,000 + $3,000 $382,000 = = 2. 06 to 1 $200,000 – $15,000 $185,000 Adjust Income Increase (Decrease) $22,000 15,000 (13,000) (b) (c) 1. 2. 3. 4. Event Understatement of ending inventory Overstatement of purchases Overstatement of ending inventory Overstatement of advertising expense; understatement of cost of goods sold Effect of Error Decreases net income Decreases net income Increases net income 0 $24,000 8-20 EXERCISE 8-12 (15–20 minutes) Errors in Inventories Net Income Year 2002 2003 2004 2005 2006 2007 Per Books $ 50,000 52,000 54,000 56,000 58,000 60,000 $330,000 2,000 8,000 $3,000 9,000 $11,000 2,000 Add Overstatement Jan. 1 Deduct Understatement Jan. 1 Deduct OverstateAdd UnderstateCorrected Net Income $ 47,000 46,000 $11,000 74,000 45,000 60,000 50,000 $322,000 ent Dec. 31 ment Dec. 31 $3,000 9,000 EXERCISE 8-13 (15–20 minutes) (a) (1) Cost of Goods Sold LIFO 500 @ $13 = 500 @ $12 = $ 6,500 6,000 $12,500 $ 3,000 8,400 $11,400 Ending Inventory 300 @ $10 = 300 @ $12 = $3,000 3,600 $6,600 $6,500 1,200 $7,700 (2) FIFO 300 @ $10 = 700 @ $12 = 500 @ $13 = 100 @ $12 = (b) LIFO 100 @ $10 = 300 @ $12 = 200 @ $1 3 = $ 1,000 3,600 2,600 $ 7,200 8-21 EXERCISE 8-13 (Continued) (c) Sales Cost of Goods Sold Gross Profit (FIFO) $25,400 = ($24 X 200) + ($25 X 500) + ($27 X 300) 11,400 $14,000 Note: FIFO periodic and FIFO perpetual provide the same gross profit and inventory value. d) LIFO matches more current costs with revenue. When prices are rising (as is generally the case), this results in a higher amount for cost of goods sold and a lower gross profit. As indicated in this exercise, prices were rising and cost of goods sold under LIFO was higher. EXERCISE 8-14 (20–25 minutes) (a) (1) LIFO 600 @ $6. 00 = $3,600 100 @ $6. 08 = 608 $4,208 (2) Average cost Total cost Total units $33,655* 5,300 = = $6. 35 average cost per unit 700 @ $6. 35 = $4,445 8-22 EXERCISE 8-14 (Continued) *Units 600 1,500 800 1,200 700 500 5,300 (b) (1) FIFO 500 @ $6. 79 = $3,395 200 @ $6. 0 = 1,320 $4,715 (2) LIFO 100 @ $6. 00 = $ 600 100 @ $6. 08 = 608 500 @ $6. 79 = 3,395 $4,603 (c) Total merchandise available fo r sale Less inventory (FIFO) Cost of goods sold $33,655 4,715 $28,940 @ @ @ @ @ @ Price $6. 00 $6. 08 $6. 40 $6. 50 $6. 60 $6. 79 = = = = = = Total Cost $ 3,600 9,120 5,120 7,800 4,620 3,395 $33,655 (d) FIFO. 8-23 EXERCISE 8-15 (15–20 minutes) (a) Shania Twain Company COMPUTATION OF INVENTORY FOR PRODUCT BAP UNDER FIFO INVENTORY METHOD March 31, 2007 Units 600 800 200 1,600 Unit Cost $12. 00 11. 00 10. 00 Total Cost $ 7,200 8,800 2,000 $18,000 March 26, 2007 February 16, 2007 January 25, 2007 (portion) March 31, 2007, inventory (b) Shania Twain Company COMPUTATION OF INVENTORY FOR PRODUCT BAP UNDER LIFO INVENTORY METHOD March 31, 2007 Units 600 1,000 1,600 Unit Cost $8. 00 9. 00 Total Cost $ 4,800 9,000 $13,800 Beginning inventory January 5, 2007 (portion) March 31, 2007, inventory (c) Shania Twain Company COMPUTATION OF INVENTORY FOR PRODUCT BAP UNDER WEIGHTED AVERAGE INVENTORY METHOD March 31, 2007 Units 600 1,200 1,300 800 600 4,500 Unit Cost $ 8. 00 9. 00 10. 00 11. 00 12. 00 Total Cost $ 4,800 10,800 13,000 8,800 7,200 $44,600 Beginning inventory January 5, 2007 January 25, 2007 February 16, 2007 March 26, 2007 Weighted average cost ($44,600 ? 4,500) March 31, 2007, inventory *Rounded off. 1,600 $ 9. 91* $ 9. 91 $15,856 8-24 EXERCISE 8-16 (15–20 minutes) (a) (1) 2,100 units available for sale – 1,400 units sold = 700 units in the ending inventory. 500 @ $4. 58 = $2,290 200 @ 4. 60 = 920 700 $3,210 Ending inventory at FIFO cost. (2) 100 @ $4. 10 = 600 @ 4. 20 = 700 $ 410 2,520 $2,930 Ending inventory at LIFO cost. (3) $9,240 cost of goods available for sale ? 2,100 units available for sale = $4. 40 weighted-average unit cost. 00 units X $4. 40 = $3,080 Ending inventory at weighted-average cost. (b) (1) LIFO will yield the lowest gross profit because this method will yield the highest cost of goods sold figure in the situation presented. The company has experienced rising purchase prices for its inventory acquisitions. In a period of rising prices, LIFO will yield the highest cost of goods sold because the most recent purchase prices (which are the higher prices in this case) are used to price cost of goods sold while the older (and lower) purchase prices are used to cost the ending inventory. 2) LIFO will yield the lowest ending inventory because LIFO uses the oldest costs to price the ending inventory units. The company has experienced rising purchase prices. The oldest costs in this case are the lower costs. 8-25 EXERCISE 8-17 (10–15 minutes) (a) (1) 400 @ $30 = 160 @ $25 = $12,000 4,000 $16,000 (2) 400 @ $20 = 160 @ $25 = $ 8,000 4,000 $12,000 (b) (1) (2) FIFO LIFO $16,000 [same as (a)] 100 @ $20 = 60 @ $25 = 400 @ $30 = $ 2,000 1,500 12,000 $15,500 8-26 EXERCISE 8-18 (15–20 minutes) First-in, first-out Sales Cost of goods sold: Inventory, Jan. Purchases Cost of goods available Inventory, Dec. 31 Cost of goods sold Gross profit Operating expenses Net income $120,000 592,000* 712,000 235,000** 477,000 573,000 200,000 $ 373,000 $1,050,000 $120,000 592,000 712,000 164,000*** 548,000 502,000 200,000 $ 302,000 Last-in, first-out $1,050,000 *Purchases 6,000 @ $22 = 10,000 @ $25 = 7,000 @ $30 = $132,000 250,000 210,000 $592,000 **Computation of inventory, Dec. 31: First-in, first-out: 7,000 units @ $30 = 1,000 units @ $25 = $210,000 25,000 $235,000 ***Last-in, first-out: 6,000 units @ $20 = 2,000 units @ $22 = $120,000 44,000 $164,000 8-27 EXERCISE 8-19 (20–25 minutes) Sandy Alomar Corporation SCHEDULES OF COST OF GOODS SOLD For the First Quarter Ended March 31, 2007 Schedule 1 First-in, First-out Beginning inventory Plus purchases Cost of goods available for sale Less ending inventory Cost of goods sold $ 40,000 146,200* 186,200 61,300 $124,900 Schedule 2 Last-in, First-out $ 40,000 146,200 186,200 56,800 $129,400 *($33,600 + $25,500 + $38,700 + $48,400) Schedules Computing Ending Inventory Units Beginning inventory Plus purchases Units available for sale Less sales ($150,000 ? 5) Ending inventory 10,000 34,000 44,000 30,000 14,000 The unit computation is the same for both assumptions, but the cost assigned to the units of ending inventory are different. First-in, First-out (Schedule 1) 11,000 3,000 14,000 at $4. 40 = at $4. 30 = $48,400 12,900 $61,300 Last-in, First-out (Schedule 2) 10,000 at $4. 00 = 4,000 at $4. 20 = 14,000 $40,000 16,800 $56,800 8-28 EXERCISE 8-20 (10–15 minutes) (a) FIFO Ending Inventory 12/31/07 $ 827. 64 76 @ $10. 89* = 24 @ $11. 88** = 285. 12 $1,112. 76 *[$11. 00 – . 01 ($11. 00)] **[$12. 00 – . 01 ($12. 00)] (b) LIFO Cost of Goods Sold—2007 76 @ $10. 89 = $ 827. 64 84 @ $11. 88 = 997. 92 90 @ $14. 85* = 1,336. 50 15 @ $15. 84** = 237. 0 $3,399. 66 *[$15. 00 – . 01 ($15)] **[$16. 00 – . 01 ($16)] (c) FIFO matches older costs with revenue. When prices are declining, as in this case, this results in a higher amount for cost of goods sold. Therefore, it is recommended that FIFO be used by Howie Long Shop to minimize taxable income. EXERCISE 8-21 ( 10–15 minutes) (a) The difference between the inventory used for internal reporting purposes and LIFO is referred to as the Allowance to Reduce Inventory to LIFO or the LIFO reserve. The change in the allowance balance from one period to the next is called the LIFO effect (or as shown in this example, the LIFO adjustment). LIFO subtracts inflation from inventory costs by charging the items purchased recently to cost of goods sold. As a result, ending inventory (assuming increasing prices) will be lower than FIFO or average cost. 8-29 (b) EXERCISE 8-21 (Continued) (c) Cash flow was computed as follows: Revenue $3,200,000 Cost of goods sold (2,800,000) Operating expenses (150,000) Income taxes (75,600) Cash flow $ 174,400 If the company has any sales on account or payables, then the cash flow number is incorrect. It is assumed here that the cash basis of accounting is used. (d) The company has extra cash because its taxes are less. The reason taxes are lower is because cost of goods sold (in a period of inflation) is higher under LIFO than FIFO. As a result, net income is lower which leads to lower income taxes. If prices are decreasing, the opposite effect results. EXERCISE 8-22 (25–30 minutes) (a) (1) Ending inventory—Specific Identification Date No. Units Unit Cost December 2 July 20 100 50 150 $30 25 Total Cost $3,000 1,250 $4,250 (2) Ending inventory—FIFO Date No. Units December 2 September 4 100 50 150 Unit Cost $30 28 Total Cost $3,000 1,400 $4,400 (3) Ending inventory—LIFO Date No. Units January 1 March 15 100 50 150 Unit Cost $20 24 Total Cost $2,000 1,200 $3,200 8-30 EXERCISE 8-22 (Continued) (4) Ending inventory—Average Cost Date January 1 March 15 July 20 September 4 December 2 Explanation Beginning inventory Purchase Purchase Purchase Purchase No. Units 100 300 300 200 100 1,000 Unit Cost $20 24 25 28 30 Total Cost $ 2,000 7,200 7,500 5,600 3,000 $25,300 $25,300 ? 1,000 = $25. 30 Ending Inventory—Average Cost No. Units 150 (b) Unit Cost $25. 30 Total Cost $3,795 Double Extension Method Base-Year Costs Current Costs Total $3,000 Units 100 50 Current-Year Cost Per Unit $30 $28 Total $3,000 1,400 $4,400 Units 150 Base-Year Cost Per Unit $20 Ending Inventory for the Period at Current Cost Ending Inventory for the Period at Base-Year Cost = $4,400 = 1. 4667 $3,000 $3,000 2,000 1,000 1. 4667 1,467 2,000 $3,467 Ending inventory at base-year prices ($4,400 ? 1. 4667) Base layer (100 units at $20) Increment in base-year dollars Current index Increment in current dollars Base layer (100 units at $20) Ending inventory at dollar-value LIFO 8-31 EXERCISE 8-23 (5–10 minutes) $97,000 – $92,000 = $5,000 increase at base prices. $98,350 – $92,600 = $5,750 increase in dollar-value LIFO value. $5,000 X Index = $5,750. Index = $5,750 ? $5,000. Index = 115 EXERCISE 8-24 (15–20 minutes) (a) 12/31/07 inventory at 1/1/07 prices, $140,000 ? 1. 12 Inventory 1/1/07 Inventory decrease at base prices Inventory at 1/1/07 prices Less decrease at 1/1/07 prices Inventory 12/31/07 under dollar-value LIFO method (b) 12/31/08 inventory at base prices, $172,500 ? 1. 15 12/31/07 inventory at base prices Inventory increment at base prices Inventory at 12/31/07 Increment added during 2008 at 12/31/08 prices, $25,000 X 1. 15 Inventory 12/31/08 $125,000 160,000 $ 35,000 $160,000 35,000 $125,000 $150,000 125,000 $ 25,000 $125,000 28,750 $153,750 EXERCISE 8-25 (20–25 minutes) Change from Prior Year — $+30,000 (20,000) +4,000 +16,000 +12,000 Current $ 2004 2005 2006 2007 2008 2009 $ 80,000 115,500 108,000 122,200 154,000 176,900 Price Index 1. 00 1. 05 1. 20 1. 30 1. 40 1. 45 8-32 Base Year $ $ 80,000 110,000 90,000 94,000 110,000 122,000 EXERCISE 8-25 (Continued) Ending Inventory—Dollar-value LIFO: 2004 2005 $80,000 $80,000 @ 1. 00 = 30,000 @ 1. 05 = $ 80,000 31,500 $111,500 2006 $80,000 @ 1. 00 = 10,000 @ 1. 05 = $ 80,000 10,500 $ 90,500 2007 $80,000 @ 1. 00 = 10,000 @ 1. 05 = 4,000 @ 1. 30 = $ 80,000 10,500 5,200 $ 95,700 2009 $80,000 @ 1. 0 = 10,000 @ 1. 05 = 4,000 @ 1. 30 = 16,000 @ 1. 40 = 12,000 @ 1. 45 = 2008 $80,000 @ 1. 00 = 10,000 @ 1. 05 = 4,000 @ 1. 30 = 16,000 @ 1. 40 = $ 80,000 10,500 5,200 22,400 $118,100 $ 80,000 10,500 5,200 22,400 17,400 $135,500 EXERCISE 8-26 (15–20 minutes) Change from Date Dec. 31, 2003 Dec. 31, 2004 Dec. 31, 2005 Dec. 31, 2006 Dec. 31, 2007 Current $ $ 70,000 90,300 95,120 105,600 100,000 Price Index 1. 00 1. 05 1. 16 1. 20 1. 25 Base-Year $ $70,000 86,000 82,000 88,000 80,000 Prior Year — $+16,000 (4,000) +6,000 (8,000) 8-33 EXERCISE 8-26 (Continued) Ending Inventory—Dollar-value LIFO: Dec. 31, 2003 $70,000 Dec. 1, 2004 $70,000 @ 1. 00 = 16,000 @ 1. 05 = $70,000 16,800 $86,800 Dec. 31, 2005 $70,000 @ 1. 00 = 12,000 @ 1. 05 = $70,000 12,600 $82,600 Dec. 31, 2006 $70,000 @ 1. 00 = 12,000 @ 1. 05 = 6,000 @ 1. 20 = $70,000 12,600 7,200 $89,800 Dec. 31, 2007 $70,000 @ 1. 00 = 10,000 @ 1. 05 = $70,000 10,500 $80,500 8-34 TIME AND PURPOSE OF PROBLEMS Problem 8-1 (Time 30–40 minutes) Purpose—to provide a multipurpose problem with trade discounts, goods in transit, computing internal price indexes, dollar-value LIFO, comparative FIFO, LIFO, and average cost computations, and inventoriable cost identification. Problem 8-2 (Time 25–35 minutes) Purpose—to provide the student with eight different situations that require analysis to determine their impact on inventory, accounts payable, and net sales. Problem 8-3 (Time 20–25 minutes) Purpose—to provide the student with an opportunity to prepare general journal entries to record purchases on a gross and net basis. Problem 8-4 (Time 40–55 minutes) Purpose—to provide a problem where the student must compute the inventory using a FIFO, LIFO, and average cost assumption. These inventory value determinations must be made under two differing assumptions: (1) perpetual inventory records are kept in units only and (2) perpetual records are kept in dollars. Many detailed computations must be made in this problem. Problem 8-5 (Time 40–55 minutes) Purpose—to provide a problem where the student must compute the inventory using a FIFO, LIFO, and average cost assumption. These inventory value determinations must be made under two differing assumptions: (1) perpetual inventory records are kept in units only and (2) perpetual records are kept in dollars. This problem is very similar to Problem 8-4, except that the differences in inventory values must be explained. Problem 8-6 (Time 25–35 minutes) Purpose—to provide a problem where the student must compute cost of goods sold using FIFO, LIFO, and weighted average, under both a periodic and perpetual system. Problem 8-7 (Time 30–40 minutes) Purpose—to provide a problem where the student must identify the accounts that would be affected if LIFO had been used rather than FIFO for purposes of computing inventories. Problem 8-8 (Time 30–40 minutes) Purpose—to provide a problem which covers the use of inventory pools for dollar-value LIFO. The student is required to compute ending inventory, cost of goods sold, and gross profit using dollar-value LIFO, first with one inventory pool and then with three pools. Problem 8-9 (Time 25–35 minutes) Purpose—the student computes the internal conversion price indexes for a LIFO inventory pool and then computes the inventory amounts using the dollar-value LIFO method. Problem 8-10 (Time 30–35 minutes) Purpose—to provide the student with the opportunity to compute inventories using the dollar-value approach. An index must be developed in this problem to price the new layers. This problem will prove difficult for the student because the indexes are hidden. Problem 8-11 (Time 40–50 minutes) Purpose—to provide the student with an opportunity to write a memo on how a dollar-value LIFO pool works. In addition, the student must explain the step-by-step procedure used to compute dollar value LIFO. 8-35 SOLUTIONS TO PROBLEMS PROBLEM 8-1 1. $150,000 – ($150,000 X . 20) = $120,000; $120,000 – ($120,000 X . 10) = $108,000, cost of goods purchased $1,100,000 + $69,000 = $1,169,000. The $69,000 of goods in transit on which title had passed on December 24 (f. o. b. hipping point) should be added to 12/31/06 inventory. The $29,000 of goods shipped (f. o. b. shipping point) on January 3, 2007, should remain part of the 12/31/06 inventory. Because no date was associated with the units issued or sold, the periodic (rather than perpetual) inventory method must be assumed. FIFO inventory cost: 1,000 units at $24 1,100 units at 23 Total 1,500 unit s at $21 600 units at 22 Total 1,500 at $21 2,000 at 22 3,500 at 23 1,000 at 24 8,000 $ 24,000 25,300 $ 49,300 $ 31,500 13,200 $ 44,700 $ 31,500 44,000 80,500 24,000 $180,000 2. 3. LIFO inventory cost: Average cost: Totals $180,000 ? 8,000 = $22. 0 Ending inventory (2,100 X $22. 50) is $47,250. 8-36 PROBLEM 8-1 (Continued) 4. Computation of price indexes: 12/31/06 $252,000 = 105 $240,000 $286,720 = 112 $256,000 12/31/07 Dollar-value LIFO inventory 12/31/06: Increase $240,000 – $200,000 = 12/31/06 price index Increase in terms of 105 Base inventory Dollar-value LIFO inventory $ 40,000 X 1. 05 42,000 2006 Layer 200,000 $242,000 Dollar-value LIFO inventory 12/31/07: Increase $256,000 – $240,000 = 12/31/07 price index Increase in terms of 112 2006 layer Base inventory Dollar-value LIFO inventory 5. $ 16,000 X 1. 12 17,920 2007 Layer 42,000 200,000 $259,920 The inventoriable costs for 2007 are: Merchandise purchased Add: Freight-in Deduct: Purchase returns Purchase discounts Inventoriable cost $16,500 6,800 $909,400 22,000 931,400 23,300 $908,100 8-37 PROBLEM 8-2 James T. Kirk Company Schedule of Adjustments December 31, 2007 Inventory Initial amounts Adjustments: 1. 2. 3. 4. 5. 6. 7. 8. Total adjustments Adjusted amounts 1. $1,520,000 NONE 71,000 30,000 32,000 21,000 27,000 NONE 3,000 184,000 $1,704,000 Accounts Payable $1,200,000 NONE 71,000 NONE NONE NONE NONE 56,000 6,000 133,000 $1,333,000 Net Sales $8,150,000 (40,000) NONE NONE (47,000) NONE NONE NONE NONE (87,000) $8,063,000 The $31,000 of tools on the loading dock were properly included in the physical count. The sale should not be recorded until the goods are picked up by the common carrier. Therefore, no adjustment is made to inventory, but sales must be reduced by the $40,000 billing price. The $71,000 of goods in transit from a vendor to James T. Kirk were shipped f. o. b. shipping point on 12/29/07. Title passes to the buyer as soon as goods are delivered to the common carrier when sold f. o. b. shipping point. Therefore, these goods are properly includable in Kirk’s inventory and accounts payable at 12/31/07. Both inventory and accounts payable must be increased by $71,000. The work-in-process inventory sent to an outside processor is Kirk’s property and should be included in ending inventory. Since this inventory was not in the plant at the time of the physical count, the inventory column must be increased by $30,000. 8-38 2. 3. PROBLEM 8-2 (Continued) 4. The tools costing $32,000 were recorded as sales ($47,000) in 2007. However, these items were returned by customers on December 31, so 2007 net sales should be reduced by the $47,000 return. Also, $32,000 has to be added to the inventory column since these goods were not included in the physical count. The $21,000 of Kirk’s tools shipped to a customer f. o. b. destination are still owned by Kirk while in transit because title does not pass on these goods until they are received by the buyer. Therefore, $21,000 must be added to the inventory column. No adjustment is necessary in the sales column because the sale was properly recorded in 2008 when the customer received the goods. The goods received from a vendor at 5:00 p. m. on 12/31/07 should be included in the ending inventory, but were not included in the physical count. Therefore, $27,000 must be added to the inventory column. No adjustment is made to accounts payable, since the invoice was included in 12/31/07 accounts payable. The $56,000 of goods received on 12/26/07 were properly included in the physical count of inventory; $56,000 must be added to accounts payable since the invoice was not included in the 12/31/07 accounts payable balance. Since one-half of the freight-in cost ($6,000) pertains to merchandise properly included in inventory as of 12/31/07, $3,000 should be added to the inventory column. The remaining $3,000 debit should be reflected in cost of goods sold. The full $6,000 must be added to accounts payable since the liability was not recorded. 5. 6. 7. 8. 8-39 PROBLEM 8-3 (a) (1) 8/10 Purchases. Accounts Payable .. 8/13 Accounts Payable. Purchase Returns and Allowances 8/15 Purchases. Accounts Payable .. 8/25 Purchases. Accounts Payable .. 8/28 Accounts Payable. Cash . 9,000 9,000 1,200 1,200 12,000 12,000 15,000 15,000 12,000 12,000 (2) Purchases—addition in cost of goods sold section of income statement. Purchase returns and allowances—deduction from purchases in cost of goods sold section of the income statement. Accounts payable—current liability in the current liabilities section of the balance sheet. 8/10 Purchases. Accounts Payable ($9,000 X . 98) .. 8/13 Accounts Payable. Purchase Returns and Allowances ($1,200 X . 98) 8-40 (b) (1) 8,820 8,820 1,176 1,176 PROBLEM 8-3 (Continued) 8/15 Purchases .. Accounts Payable ($12,000 X . 99).. 8/25 Purchases .. Accounts Payable ($15,000 X . 98).. 8/28 Accounts Payable Purchase Discounts Lost. Cash 2. 8/31 Purchase Discounts Lost. Accounts Payable . (. 02 X [$9,000 – $1,200]) 11,880 11,880 14,700 14,700 11,880 120 12,000 156 156 3. Same as part (a) (2) except: Purchase Discounts Lost—treat as financial expense in income statement. (c) The second method is better theoretically because it results in the inventory being carried net of purchase discounts, and purchase discounts not taken are shown as an expense. The first method is normally used, however, for practical reasons. 8-41 PROBLEM 8-4 (a) Purchases Total Units April 1 (balance on hand) April 4 April 11 April 18 April 26 April 30 Total units Total units sold Total units (ending inventory) 100 400 300 200 500 200 1,700 1,400 300 Sales Total Units April 5 April 12 April 27 April 28 Total units 300 200 800 100 1,400 Assuming costs are not computed for each withdrawal: (1) First-in, first-out. Date of Invoice April 30 April 26 No. Units 200 100 Unit Cost $5. 80 5. 60 Total Cost $1,160 560 $1,720 (2) Last-in, first-out. Date of Invoice April 1 April 4 No. Units 100 200 Unit Cost $5. 0 5. 10 Total Cost $ 500 1,020 $1,520 8-42 PROBLEM 8-4 (Continued) (3) Average cost. Cost of Part X available. Date of Invoice No. Units April 1 April 4 April 11 April 18 April 26 April 30 Total Available 100 400 300 200 500 200 1,700 Unit Cost $5. 00 5. 10 5. 30 5. 35 5. 60 5. 80 Total Cost $ 500 2,040 1,590 1,070 2,800 1,160 $9,160 Average cost per unit = $ 9,160 ? 1,700 = $5. 39. Inventory, April 30 = 300 X $5. 39 = $1,617. (b) Assuming costs are computed for each withdrawal: (1) First-in, first out. The inventory would be the same in amount as in part (a), $1,720. 8-43 PROBLEM 8-4 (Continued) (2) Last-in, first-out. Purchased Date April 1 April 4 April 5 April 11 300 5. 30 No. of units 100 400 Unit cost $5. 00 5. 10 300 $5. 10 No. of units Sold Unit cost No. of units 100 100 400 100 100 100 100 300 April 12 200 5. 30 100 100 100 April 18 200 5. 35 100 100 100 200 April 26 500 5. 60 100 100 100 200 500 April 27 800 500 @ 200 @ 100 @ April 28 April 30 200 5. 80 100 5. 60 5. 35 5. 30 5. 10 100 100 100 100 200 5. 00 5. 10 5. 00 5. 00 5. 80 1,010 500 1,660 Balance* Unit cost $5. 00 5. 00 5. 10 5. 00 5. 10 5. 00 5. 10 5. 30 5. 00 5. 10 5. 30 5. 00 5. 10 5. 30 5. 35 5. 00 5. 10 5. 30 5. 35 5. 60 5,410 2,610 1,540 2,600 Amount $ 500 2,540 1,010 Inventory April 30 is $1,660. *The balance on hand is listed in detail after each transaction. 8-44 PROBLEM 8-4 (Continued) (3) Average cost. Purchased Date April 1 April 4 April 5 April 11 April 12 April 18 April 26 April 27 April 28 April 30 200 5. 80 200 500 5. 35 5. 60 800 100 5. 4336 5. 4336 300 5. 30 200 5. 2120 No. of units 100 400 Unit cost $5. 00 5. 10 300 $5. 0800 No. of units Sold Unit cost No. of units 100 500 200 500 300 500 1,000 200 100 300 Balance Unit cost* $5. 0000 5. 0800 5. 0800 5. 2120 5. 2120 5. 2672 5. 4336 5. 4336 5. 4336 5. 6779 Amount $ 500. 00 2,540. 00 1,016. 00 2,606. 00 1,563. 60 2,633. 60 5,433. 0 1,086. 72 543. 36 1,703. 36 Inventory April 30 is $1,703. *Four decimal places are used to minimize rounding errors. 8-45 PROBLEM 8-5 (a) Assuming costs are not computed for each withdrawal (units received, 5,600, minus units issued, 4,700, equals ending inventory at 900 units): (1) First-in, first-out. Date of Invoice No. Units Jan. 28 900 Unit Cost $3. 60 To tal Cost $3,240 (2) Last-in, first-out. Date of Invoice No. Units Jan. 2 (3) 900 Unit Cost $3. 00 Total Cost $2,700 Average cost. Cost of goods available: Date of Invoice No. Units Jan. 2 Jan. 10 Jan. 18 Jan. 23 Jan. 28 Total Available 1,200 600 1,000 1,300 1,500 5,600 Unit Cost $3. 00 3. 20 3. 30 3. 40 3. 60 Total Cost $ 3,600 1,920 3,300 4,420 5,400 $18,640 Average cost per unit = $18,640 ? 5,600 = $ 3. 33 Cost of inventory Jan. 31 = 900 X $3. 33 = $2,997 (b) Assuming costs are computed at the time of each withdrawal: Under FIFO—Yes. The amount shown as ending inventory would be the same as in (a) above. In each case the units on hand would be assumed to be part of those purchased on Jan. 28. Under LIFO—No. During the month the available balance dropped below the ending inventory quantity so that the layers of oldest costs were partially liquidated during the month. 8-46 PROBLEM 8-5 (Continued) Under Average Cost—No. A new average cost would be computed each time a withdrawal was made instead of only once for all items purchased during the year. The calculations to determine the inventory on this basis are given below. (1) First-in, first-out. The inventory would be the same in amount as in part (a), $3,240. Last-in, first-out. Received Date Jan. 2 Jan. 7 Jan. 10 Jan. 13 Jan. 18 1,000 3. 30 600 3. 20 500 300 3. 20 3. 30 No. of units 1,200 Unit cost $3. 00 700 $3. 00 Issued No. of units Unit cost No. of units 1,200 500 500 600 500 100 500 100 700 Jan. 20 700 100 300 Jan. 23 Jan. 26 Jan. 28 1,500 3. 0 1,300 3. 40 800 3. 40 3. 30 3. 20 3. 00 200 200 1,300 200 500 200 500 1,500 Jan. 31 1,300 3. 60 200 500 200 3. 00 3. 00 3. 40 3. 00 3. 40 3. 00 3. 40 3. 60 3. 00 3. 40 3. 60 3,020 7,700 600 5,020 2,300 Balance Unit cost* $3. 00 3. 00 3. 00 3. 20 3. 00 3. 20 3. 00 3. 20 3. 30 4,130 Amount $3,600 1,500 3,420 1,820 (2) Inventory, January 31 is $3,020. 8-47 PROBLEM 8-5 (Continued) (3) Average cost. Received Date Jan. 2 Jan. 7 Jan. 10 Jan. 13 Jan. 18 Jan. 20 Jan. 23 Jan. 26 Jan. 28 Jan. 31 1,500 3. 60 1,300 3. 5291 1,300 3. 40 800 3. 3773 1,000 3. 30 600 3. 20 500 300 1,100 3. 1091 3. 2281 3. 2281 No. of units 1,200 Unit cost $3. 0 700 $3. 0000 Issued No. of units Unit cost No. of units 1,200 500 1,100 600 1,300 200 1,500 700 2,200 900 Balance Unit cost* $3. 0000 3. 0000 3. 1091 3. 1091 3. 2281 3. 2281 3. 3773 3. 3773 3. 5291 3. 5291 Amount $3,600 1,500 3,420 1,865 4,197 646 5,066 2,364 7,764 3,176 Inventory, January 31 is $3,176. *Four decimal places are used to minimize rounding errors. 8-48 PROBLEM 8-6 (a) Beginning inventory Purchases (2,000 + 3,000) Units available for sale Sales (2,500 + 2,000) Goods on hand Periodic FIFO 1,000 X $12 = 2,000 X $18 = 1,500 X $23 = 4,500 1,000 5,000 6,000 4,500 1,500 $12,000 36,000 34,500 $82,500 (b) Perpetual FIFO Same as periodic: Periodic LIFO 3,000 X $23 = 1,500 X $18 = 4,500 Perpetual LIFO Purchased $82,500 (c) $69,000 27,000 $96,000 (d) Date 1/1 2/4 2/20 4/2 11/4 Sold Balance 1,000 X $12 = } $12,000 $48,000 2,000 X $18 = $36,000 2,000 X $18 500 X $12 3,000 X $23 = $69,000 2,000 X $23 = $46,000 ______ $88,000 1,000 X $12 2,000 X $18 } $42,000 500 X $12 500 X $12 3,000 X $23 500 X $12 1,000 X $23 = } } $ 6,000 $75,000 $29,000 8-49 PROBLEM 8-6 (Continued) (e) Periodic weighted-average 1,000 X $12 = $ 12,000 2,000 X $18 = 36,000 3,000 X $23 = 69,000 $117,000 ? 6,000 = $19. 50 4,500 X $19. 50 $87,750 (f) Perpetual moving average Date 1/1 2/4 2/20 4/2 11/4 3,000 X $23 = $69,000 2,000 X $22 = 44,000 $84,000 a Purchased Sold Balance 1,000 X $12 = $12,000 2,000 X $18 = $36,000 2,500 X $16 = $40,000 3,000 X $16 = 500 X $16 = 3,500 X $22 = 1,500 X $22 = a 48,000 8,000 77,000 33,000 500 X $16 = $ 8,000 3,000 X $23 = 69,000 3,500 $77,000 ($77,000 ? 3,500 = $22) 8-50 PROBLEM 8-7 The accounts in the 2008 financial statements which would be affected by a change to LIFO and the new amount for each of the accounts are as follows: Account Cash Inventory Retained earnings Cost of goods sold Income taxes New amount for 2008 $165,600 120,000 215,600 810,000 94,400 1) (2) (3) (4) (5) The calculations for both 2007 and 2008 to support the conversion to LIFO are presented below. Income for the Years Ended Sales Less: Cost of goods sold Other expenses Income before taxes Income taxes (40%) Net income Cost of Good Sold and Ending Inventory for the Years Ended Beginning inventory Purchases Cost of goods available Ending inventory Cost of goods sold Determination of Cash at Income taxes under FIFO Income taxes as calculated under LIFO Increase in cash Adjust cash at 12/31/08 for 2007 tax difference Total increase in cash Cash balance under FIFO Cash balance under LIFO 40,000 X $3. 00) (150,000 X $3. 50) (40,000 X $3. 00) 12/31/07 $900,000 525,000 205,000 730,000 170,000 68,000 $102,000 12/31/08 $1,350,000 810,000 304,000 1,114,000 236,000 94,400 $ 141,600 12/31/07 $120,000 525,000 645,000 120,000 $525,000 12/31/07 $ 76,000 68,000 8,000 — 8,000 130,000 $138,000 8-51 (40,000 X $3. 00) (180,000 X $4. 50) (40,000 X $3. 00) 12/31/08 $120,000 810,000 930,000 120,000 $810,000 12/31/08 $110,400 94,400 16,000 8,000 24,000 141,600 $165,600 PROBLEM 8-7 (Continued) Determination of Retained Earnings at Net income under FIFO Net income under LIFO Reduction in retained earnings Adjust retained earnings at 12/31/08 for 2007 reduction Total reduction in retained earnings Retained earnings under FIFO Retained earnings under LIFO 12/31/07 $114,000 102,000 12,000 — 12,000 200,000 $188,000 12/31/08 $165,600 141,600 24,000 12,000 36,000 251,600 $215,600 8-52 PROBLEM 8-8 (a) 1. Ending inventory in units Portable 6,000 + 15,000 – 14,000 = Midsize 8,000 + 20,000 – 24,000 = Flat-screen 3,000 + 10,000 – 6,000 = 7,000 4,000 7,000 18,000 2. Ending inventory at current cost Portable 7,000 X $120 = Midsize 4,000 X $300 Flat-screen 7,000 X $460 = $ 840,000 1,200,000 3,220,000 $5,260,000 3. Ending inventory at base-year cost Portable 7,000 X $100 = Midsize 4,000 X $250 = Flat-screen 7,000 X $400 = $ 700,000 1,000,000 2,800,000 $4,500,000 4. Price index $5,260,000 ? $4,500,000 = 1. 1689 Ending inventory $3,800,000 X 1. 0000 = 700,000* X 1. 1689 = *($4,500,000 – $3,800,000 = $700,000) 5. $3,800,000 818,230 $4,618,230 6. Cost of goods sold Beginning inventory Purchases [(15,000 X $120) + (20,000 X $300) + (10,000 X $460)] Cost of goods available Ending inventory Cost of goods sold 8-53 $ 3,800,000 2,400,000 16,200,000 4,618,230 $11,581,770 PROBLEM 8-8 (Continued) 7. Gross profit Sales [(14,000 X $150) + (24,000 X $405) + (6,000 X $600)] Cost of goods sold Gross profit $15,420,000 11,581,770 $ 3,838,230 (b) 1. Ending inventory at current cost restated to base cost Portable $ 840,000 ? 1. 20 = $ 700,000 Midsize 1,200,000 ? 1. 20 = $1,000,000 Flat-screen 3,220,000 ? 1. 15 = $2,800,000 Ending inventory Portable $ 600,000 X 1. 00 = 100,000 X 1. 20 = Midsize 1,000,000 X 1. 00 = Flat-screen 1,200,000 X 1. 00 = 1,600,000 X 1. 15 = 2. $ 600,000 120,000 1,000,000 1,200,000 1,840,000 $4,760,000 3. Cost of good sold Cost of good available Ending inventory Cost of goods sold Gross profit Sales Cost of goods sold Gross profit $16,200,000 4,760,000 $11,440,000 4. $15,420,000 11,440,000 $ 3,980,000 8-54 PROBLEM 8-9 (a) Adis Abeba Wholesalers Inc. Computation of Internal Conversion Price Index for Inventory Pool No. 1 Double Extension Method 2006 $595,000 234,000 $829,000 2007 $520,000 320,000 $840,000 Current inventory at current-year cost Product A Product B Current inventory at base cost Product A Product B 17,000 X $35 = 9,000 X $26 = 13,000 X $40 = 10,000 X $32 = 17,000 X $30 = 9,000 X $25 = 510,000 225,000 $735,000 13,000 X $30 = 10,000 X $25 = $390,000 250,000 $640,000 Conversion price index $829,000 ? $735,000 = 1. 13 $840,000 ? $640,000 = 1. 31 (b) Adis Abeba Wholesalers Inc. Computation of Inventory Amounts under Dollar-Value LIFO Method for Inventory Pool No. 1 at December 31, 2006 and 2007 Current Inventory at base cost Conversion price index 1. 00 1. 13 (a) Inventory at LIFO cost $525,000 237,300 $762,300 December 31, 2006 Base inventory 2006 layer ($735,000 – $525,000) Total December 31, 2007 Base inventory 2006 layer (remaining) Total (a) (b) $525,000 210,000 $735,000 (a) $525,000 115,000 $640,000 b) (a) 1. 00 1. 13 (a) $525,000 129,950 $654,950 Per schedule for instruction (a). After liquidation of $95,000 base cost ($735,000 – $640,000). 8-55 PROBLEM 8-10 Base-Year Cost December 31, 2005 January 1, 2005, base December 31, 2005, layer $45,000 11,000 $56,000 Index % 100 115* Dollar-Value LIFO $45,000 12,650 $57,650 December 31, 2006 January 1, 2005, base December 31, 2005, layer December 31, 2006, layer $45,000 11,000 12,400 $68,400 100 115 128** $45,000 12,650 15,872 $73,522 December 31, 2007 January 1, 2005, base December 31, 2005, layer December 31, 2006, layer December 31, 2007, layer 45,000 11,000 12,400 1,600 $70,000 100 115 128 130*** $45,000 12,650 15,872 2,080 $75,602 *$64,500 ? $56,000 **$87,300 ? $68,400 ***$90,800 ? $70 ,000 8-56 PROBLEM 8-11 (a) Schedule A A Current $ 2003 2004 2005 2006 2007 2008 $ 80,000 115,500 108,000 131,300 154,000 174,000 B Price Index 1. 00 1. 05 1. 20 1. 30 1. 40 1. 45 C Base-Year $ $ 80,000 110,000 90,000 101,000 110,000 120,000 D Change from Prior Year — $+30,000 (20,000) +11,000 +9,000 +10,000 Schedule B Ending Inventory-Dollar-Value LIFO: 2003 2004 $ 80,000 $ 80,000 31,500 $111,500 $ 80,000 10,500 $ 90,500 $ 80,000 10,500 14,300 $104,800 8-57 80,000 @ $1. 00 = 30,000 @ 1. 05 = $80,000 @ 1. 00 = 10,000 @ 1. 05 = 2007 $80,000 @ $1. 00 = 10,000 @ 1. 05 = 11,000 @ 1. 30 = 9,000 @ 1. 40 = 2008 $80,000 @ 1. 00 = 10,000 @ 1. 05 = 11,000 @ 1. 30 = 9,000 @ 1. 40 = 10,000 @ 1. 45 = $ 80,000 10,500 14,300 12,600 $117,400 $ 80,000 10,500 14,300 12,600 14,500 $131,900 2005 2006 $80,000 @ 1. 00 = 10,000 @ 1. 05 = 11,000