Question

Help me solve these problems and how to get each answer

The Science Road Show (SRS) is a not-for-profit organization that puts on traveling science demonstrations throughout the state. SRS operates on a September 1-August 31 fiscal year. The organization began the year with the following account balances: Cash Grants Receivable Inventory Net Assets without Donor Restrictions Notes Payable Pledges Receivable, Net PP&E, Net Prepaid Rent Wages Payable $40,000 100,000 4,000 169,000 50,000 10,000 75,000 10,000 20,000 SRS recorded the following financial events during the 2021 fiscal year: 1. On September 1, SRS took out a $200,000 bank loan with an annual interest rate of 4.5 percent. SRS's prior outstanding loan has an annual interest rate of 6.0 percent. Annual interest payments on both loans are due August 31. 2. Halfway through the fiscal year, SRS used the new loan proceeds to purchase a new set that is expected to last 10 years and has no salvage value. SRS also recorded $5,000 in depreciation on its existing equipment, per its policy of recording depreciation annually. 3. On the first day of the fiscal year, SRS held a membership drive. Each 2-year membership is priced at $1,000 and entitles the member to benefits for 2 years. SRS sold and received payment for 50 memberships. 4. SRS sold $375,000 in tickets. All tickets were paid for in cash. 5. SRS received a $100,000 check for a foundation grant that was awarded in the previous fiscal year. During the year, SRS was awarded another $50,000 foundation grant. Payment on the second grant is expected in October 2021. 6. During the fiscal year, SRS received $60,000 in new donor pledges and collected 75 percent of those pledges. SRS also collected 60 percent of the outstanding pledges from the previous fiscal year. Based on past experience, SRS expects that none of the remaining outstanding pledges from the prior fiscal year will be collected. 7. Throughout the year, SRS ordered paid for and used $15,000 of program booklets. In August, SRS ordered (on account) $5,000 of programs for the following fiscal year. 8. SRS's employees earned $25,000 per month. Employees are paid with a 1-month lag. SRS also fully paid its prior-year obligations to employees. 9. Payments on SRS's operating leased vehicles and equipment are due 1 month in advance. Currently, lease payments totaled $10,000 per month. Next year, they will rise to $12,000 per month. 10. On August 31, in addition to making annual interest payments, SRS repaid the loan outstanding prior to FY 2021 in full. A $25,000 principal repayment on the loan is taken out at the beginning of FY 2021 is due on September 1, 2021. Prepare an activity statement (operating statement), a comparative statement of financial position (balance sheet), and a statement of cash flows (using the indirect method). What do you learn from these statements, and what questions do they raise?

Assume you are the manager of a local hospital. You begin the year with 150 boxes of inventory, each at a cost of $1,000. Your organization had the following inventory changes during the year: You purchased 110 additional boxes in March at a cost of $1,200 each, purchased an additional 230 boxes in August at a cost of $1,400 each, and used 400 boxes during the year. Calculate the value of the ending inventory and the value of the inventory used for the year using both the FIFO and LIFO methods.

Answer 1

Value of ending inventory under FIFO method: FIFO means first in first out. so we will use the boxes which came first to us.

Opening stock - 150boxes with $ 1000 each

Purchase in March = 110 boxes of $1200 each

Purchase in August = 230 boxes of 1400 Each

Only 400 boxes were used during the year. so we are left with 150+110+230-400 boxes = 90 boxes. It means boxes which were purchased in August is in stock. the value of August boxes is 1400each. Hence the valueof inventory under FIFO method is 90*1400 =$126000

LIFO means last in first out. So the opening stock which we had in stock will remain with us. Hence the value of inventory under LIFO method will be = 90*$1000 = $90000