[jeff]

Welcome to the Q1 2017 CPA Exam Study Group for FAR. 🙂

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Holly]

I'll try again

BEC - 79
REG - 85
AUD - 5/27/16

[Holly]

PURCHASES…………………..SALES………………………INVENTORY

Number Cost in $ Total………Number Cost in $ Total………Number Cost in $ Total
12/1/X1 400 11.00 $4,400………………………………………400 11.00 $4,400
12/6/X1 100 12.00 $1,200………………………………………400 11.00 $4,400
…………………………………………………………………100 12.00 $1,200

BEC - 79
REG - 85
AUD - 5/27/16

[GiniC]

I'm thinking what came out as a third line is the inventory, and the second column of numbers is sales?

IGNORE, HR corrected me

[Holly]

So, that's a 3 column chart sales has no info and the third line is blank until the inventory column.

BEC - 79
REG - 85
AUD - 5/27/16

[GiniC]

@HRSexton – what's the “call of the question” and what is that third line supposed to BE under inventory?

[GiniC]

Testing to see if I can post an image…

[Holly]

It's a LIFO question and wants you to fill in the chart using a perpetual system. The third line is a long blank line without row headers.

BEC - 79
REG - 85
AUD - 5/27/16

[GiniC]

Another test

[GiniC]

Test 3

[GiniC]

OK, so my son showed me how to post an image. If you can capture an image of the problem statement and save it somewhere online (or find it online) you can use the “img” button at the top of the posting box to paste the image into your post.

I put a photo of my cat into my Google Drive, then previewed it, then right-clicked the image to “copy image address”. Then in the “img” button you can paste that address, give it a description, and put it into your post.

[Holly]

Edge Co., a toy manufacturer, is in the process of preparing its financial statements for the year ending December 31, 20X1. Edge expects to issue its 20X1 financial statements on March 1, 20X2. Edge is in the process of determining if certain information needs to be included in the financial statements and if adjustments need to be made. This assumes that Edge uses a perpetual inventory system.

As of the beginning of December 20X1, Edge Co. decided to purchase certain toys for resale for the holiday season (they are not manufacturing them). The table below shows details on purchases and sales for the month of December 20X1. Complete the shaded cells of the table in order to determine the total purchases, cost of goods sold for the month, and ending inventory balance as of December 31, 20X1, using the LIFO method.

BEC - 79
REG - 85
AUD - 5/27/16

[GiniC]

@HRSexton – OK, I think I see it now. Assuming that “inventory” column is the end of the day (if it were beginning, you would need another column to fill in ending?

12/1/x1 they had no existing inventory and make no sales, since the perpetual inventory matched the purchase – so Sales is all zeros

12/6/x1 they purchased 100, but inventory remained at 400@11, so they must have sold all 100 of the new items

?future date, maybe end of month/year, they now have 100 @ 12 so they must have purchased another 100 @ 12 and sold none to get an ending inventory of 100 @ 12.

Does that approximate the answer?

[Holly]

I'm confused about why the purchase on 12/6 would not be counted in inventory until the third row. You're thinking they must have sold all 100 items, but they show when they sell – I only included the first two transactions because it affects the rest of the chart.

BEC - 79
REG - 85
AUD - 5/27/16

[Holly]

file:///C:/Users/Holly/Desktop/SimulationSession.aspx.htm

BEC - 79
REG - 85
AUD - 5/27/16

[GiniC]

Maybe there's too much I can't see, I thought you would be filling in the blocks that were empty.

The only way that could possibly work is if the inventory column is that day's STARTING inventory, rather than ending.

[Author]

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