Instructions for the Microsoft Excel Templates by Rex A Schildhouse

Be advised, the template workbooks and worksheets are not protected. Overtyping any data may remove it.
Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text. You should enter your name, date, instructor's name, and course into the cells at the top of the page. This information will be printed on the top of each page if the template requires more than one page. Each template is set to print with File Name, Page # of # Page(s), the print date, and the print time to assist in assembly of multiple pages. If more than one page is required by the template, manual page breaks have been set to provide consistent presentation. All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the appropriate cells. In general, the yellow highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account title(s), values, memorandum appropriate to the entry, or text answers to questions. And information or data which may be required by the solution will be entered in cells with borders to help identify them. Where a yellow highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01, 2012, in the format set in the template. Where a yellow highlighted cell shows "Acct Nbr" enter the appropriate account number, provided in the template and in the text for that step of the challenge. This is entry may be a "Look to" formula to another cell where that information has been provided or previously entered. Where a yellow highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry and most of those cells are set for the proper indentation for that step. Frequently the chart of accounts appropriate to the challenge is provided and you can use the "look to" formula to reference the appropriate account title without typing it. Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be acceptable. Where a yellow highlighted cell shows titles such as "Values," "Amounts," or "Quantities" enter the appropriate numerical value for that step of the challenge. The cell is formatted for proper presentation of the entered information. If a dollar sign is appropriate, it should not be entered, Microsoft Excel will place it there through formatting. Commas and significant digits (decimals) are also set through formatting for common presentation. Since the formatting of the templates is not protected by any password, you may change any of the formatting found in the templates to meet your desires. Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel.

Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel. Where a yellow highlighted cell shows "Text" enter the appropriate text for that step of the challenge. This may be a memorandum entry for a journal entry or a lengthy text answer discussing the results of an analysis of a company's financials. These titles can simply be typed over. Where a yellow highlighted cell shows titles such as "Journal Number" or "Journ #" you should enter the appropriate number provided in the template and in the text for that step of the challenge. In general this will appear in instances such as "Record the following events in General Journal number six." The print area is defined to fit onto 8 1/2" 11" sheets in portrait or landscape mode as required. Margins are generally set to no less than 1/2" so most printers can print them without a problem. If you printer cannot accept margins less than 1" you may have to reformat the margins through Page Setup. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. This can be removed by utilizing the View menu and selecting "Unfreeze Panes" under "Freeze Panes." When negative values are required, enter them by starting with a minus sign, "-". Negative values may be shown as ($400) or -$400. Negative values in formulas can be created by putting a minus sign in front of the cell reference - "=E10*-E11" will return a negative value if both cells E10 and E11 contain positive values. Microsoft Office and Microsoft Excel are products of, and copyrighted by, Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2013, consists of the following items. Part No. Quantity Cost Per Unit Cost to Replace per Unit 110 600 $95 $100.00 111 1,000 60 $52.00 112 500 80 $76.00 113 200 170 $180.00 120 400 205 $208.00 121 1,600 16 $14.00 122 300 240 $235.00 Part No. 121 is obsolete and has a realizable value of each as scrap: $0.50 Per Unit Cost $95 60 80 170 205 16 240 Total Market $60,000 52,000 38,000 36,000 83,200 800 70,500 $340,500 Lower of Cost or Market $57,000 52,000 38,000 34,000 82,000 800 70,500 $334,300

Part No. 110 111 112 113 120 121 122 Totals

Quantity 600 1,000 500 200 400 1,600 300

Market $100.00 52.00 76.00 180.00 208.00 14.00 $235.00

Total Cost $57,000 60,000 40,000 34,000 82,000 25,600 72,000 $370,600

Instructions: Complete the table above by inserting the correct values or formulas into the yellow highlighted cells. From this data, answer the following two questions: (a) Determine the inventory as of December 31, 2013, by the lower-of-cost-or-market method, applying this method directly to each item. The valuation of inventory as of December 31, 2013, by the lower of cost or market method, as applied directly to each item is: $334,300

(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory. The valuation of inventory as of December 31, 2013, by the lower of cost or market method, as applied to total inventory is: $340,500

153010892.xlsx.ms_office, Exercise 9-1 Solution, Page 3 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2013, consists of the following items. Part No. Quantity Cost Per Unit Cost to Replace per Unit 110 600 $95 $100.00 111 1,000 60 $52.00 112 500 80 $76.00 113 200 170 $180.00 120 400 205 $208.00 121 1,600 16 $14.00 122 300 240 $235.00 Part No. 121 is obsolete and has a realizable value of each as scrap: $0.50 Per Unit Cost $95 60 80 170 205 16 240 Total Market Formula Formula Formula Formula Formula Formula Formula Formula Lower of Cost or Market Formula Formula Formula Formula Formula Formula Formula Formula

Part No. 110 111 112 113 120 121 122 Totals

Quantity 600 1,000 500 200 400 1,600 300

Market $100.00 52.00 76.00 180.00 208.00 14.00 $235.00

Total Cost Formula Formula Formula Formula Formula Formula Formula Formula

Instructions: Complete the table above by inserting the correct values or formulas into the yellow highlighted cells. From this data, answer the following two questions: (a) Determine the inventory as of December 31, 2013, by the lower-of-cost-or-market method, applying this method directly to each item. The valuation of inventory as of December 31, 2013, by the lower of cost or market method, as applied directly to each item is: Value

(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory. The valuation of inventory as of December 31, 2013, by the lower of cost or market method, as applied to total inventory is: Value

153010892.xlsx.ms_office, Exercise 9-1, Page 4 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E9-7 (Relative Sales Value Method) Larsen Realty Corporation purchased a tract of unimproved land for $55,000 . This land was improved and subdivided into building lots at an additional cost of $30,000 These building lots were all of the same size but owing to differences in location were offered for sale at different prices as follows. Group No. of Lots Price per Lot 1 9 $3,000 2 15 $4,000 3 19 $2,000 Operating expenses for the year allocated to this project total as follows: Group No. of Lots 1 5 2 7 3 2 $18,200 Lots unsold at the year-end

Instructions: At the end of the fiscal year Larsen Realty Corporation instructs you to arrive at the net income realized on this operation to date. Relative sales price as % 22% 48% 30% 100%

Group 1 2 3

No. of lots 9 15 19

Sales price per lot $3,000 4,000 2,000

Total sales price $27,000 60,000 38,000 $125,000

Cost total $85,000 85,000 85,000

Cost allocated to lots $18,360 $40,800 $25,840 $85,000

Cost per lot $2,040 $2,720 $1,360

Lots Sold Group 1 2 3 No. of Lots 4 8 17 29 Price per lot $3,000 4,000 2,000 Total selling price $12,000 32,000 34,000 $78,000 Cost per lot $2,040 2,720 1,360 Extended cost $8,160 21,760 23,120 $53,040 Gross Profit $3,840 $10,240 10,880 $24,960

Sales (see schedule) Cost of goods sold (see schedule) Gross profit Operating expenses Net income

$78,000 53,040 24,960 18,200 $6,760

153010892.xlsx.ms_office, Exercise 9-7 Solution, Page 5 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E9-7 (Relative Sales Value Method) Larsen Realty Corporation purchased a tract of unimproved land for $55,000 . This land was improved and subdivided into building lots at an additional cost of $30,000 These building lots were all of the same size but owing to differences in location were offered for sale at different prices as follows. Group No. of Lots Price per Lot 1 9 $3,000 2 15 $4,000 3 19 $2,000 Operating expenses for the year allocated to this project total as follows: Group No. of Lots 1 5 2 7 3 2 $18,200 Lots unsold at the year-end

Instructions: At the end of the fiscal year Larsen Realty Corporation instructs you to arrive at the net income realized on this operation to date. Relative sales price as % Formula Formula Formula Formula

Group 1 2 3

No. of lots Number Number Number

Sales price Total per lot sales price Amount Amount Amount Amount Amount Amount Formula

Cost total Amount Amount Amount

Cost allocated to lots Cost per lot Formula Formula Formula Formula Formula Formula Formula

Lots Sold Group 1 2 3 No. of Lots Number Number Number Formula Price Total selling per lot price Cost per lot Amount Formula Amount Amount Formula Amount Amount Formula Amount Formula Amount Amount Formula Amount Formula Extended cost Formula Formula Formula Formula Gross Profit Formula Formula Formula Formula

Sales (see schedule) Cost of goods sold (see schedule) Gross profit Operating expenses Net income

153010892.xlsx.ms_office, Exercise 9-7, Page 6 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P9-2 (Lower-of-Cost-or-Market) Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2012, and Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2012, the balance in Garcias Raw Material Inventory account was $408,000 and the Allowance to Reduce Inventory to Market had a credit balance of $27,500 Alcide summarized the relevant inventory cost and market data at May 31, 2012, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcias May 31, 2012, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the cost principle. Net Realizable Value $56,000 84,800 168,300 140,000 $449,100

Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total

Cost $70,000 86,000 112,000 140,000 $408,000

Replacement Cost $62,500 79,400 124,000 126,000 $391,900

Sales Price $64,000 94,000 186,400 154,800 $499,200

Normal Profit $5,100 7,400 18,500 15,400 $46,400

Instructions: (a) (1) Determine the proper balance in the Allowance to Reduce Inventory to Market at May 31, 2012. Calculations of Proper Balance on the Allowance to Reduce Inventory to Market At May 31, 2012. NRV less NRV normal profit (Ceiling) (Floor) $56,000 $50,900 $84,800 77,400 $168,300 149,800 $140,000 124,600 $449,100 $402,700 $408,000 373,400 $34,600

Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Totals

Cost $70,000 $86,000 $112,000 $140,000 $408,000

Replacement Cost $62,500 $79,400 $124,000 $126,000 $391,900

LCM $56,000 $79,400 $112,000 $126,000 $373,400

Inventory cost LCM valuation Allowance at May 31, 2012

153010892.xlsx.ms_office, Problem 9-2 Solution, Page 7 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th (a) (2) For the fiscal year ended May 31, 2012, determine the amount the gain or loss that would be recorded Intermediate Accounting, 14 Edition by Kieso, Weygandt, andof Warfield
due to the change in the Allowance to Reduce Inventory to Market. For the fiscal year ended May 31, 2010, the loss that would be recorded due to the change in the Allowance to Reduce Inventory to Market would be $7,100, as calculated below. Balance prior to adjustment Required balance Loss to be recorded $27,500 34,600 ($7,100)

(b) Explain the rationale for the use of the lower of cost or market rule as it applies to inventories. The use of the lower of cost or market (LCM) rule is based on both the matching principle and the concept of conservatism. The matching principle applies because the application of the LCM rule allows for the recognition of a decline in the utility (value) of inventory as a loss in the period in which the decline takes place.

The departure from the cost principle for inventory valuation is permitted on the basis of conservatism. The general rule is that the historical cost principle is abandoned when the future utility of an asset is no longer as great as its original cost.

153010892.xlsx.ms_office, Problem 9-2 Solution, Page 8 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P9-2 (Lower-of-Cost-or-Market) Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2012, and Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2012, the balance in Garcias Raw Material Inventory account was $408,000 and the Allowance to Reduce Inventory to Market had a credit balance of $27,500 Alcide summarized the relevant inventory cost and market data at May 31, 2012, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcias May 31, 2012, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the cost principle. Net Realizable Value $56,000 84,800 168,300 140,000 $449,100

Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total

Cost $70,000 86,000 112,000 140,000 $408,000

Replacement Cost $62,500 79,400 124,000 126,000 $391,900

Sales Price $64,000 94,000 186,400 154,800 $499,200

Normal Profit $5,100 7,400 18,500 15,400 $46,400

Instructions: (a) (1) Determine the proper balance in the Allowance to Reduce Inventory to Market at May 31, 2012. Calculations of Proper Balance on the Allowance to Reduce Inventory to Market At May 31, 2012. NRV less NRV normal profit (Ceiling) (Floor) Amount Amount Amount Amount Amount Amount Amount Amount Formula Formula Amount Amount Formula

Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Totals

Cost Amount Amount Amount Amount Formula

Replacement Cost Amount Amount Amount Amount Formula

LCM Amount Amount Amount Amount Formula

Inventory cost LCM valuation Allowance at May 31, 2012

153010892.xlsx.ms_office, Problem 9-2, Page 9 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th (a) (2) For the fiscal year ended May 31, 2012, determine the amount the gain or loss that would be recorded Intermediate Accounting, 14 Edition by Kieso, Weygandt, andof Warfield
due to the change in the Allowance to Reduce Inventory to Market. Enter text answer here as appropriate.

Balance prior to adjustment Required balance Loss to be recorded

Amount Amount Formula

(b) Explain the rationale for the use of the lower of cost or market rule as it applies to inventories. Enter text answer here as appropriate.

Enter text answer here as appropriate.

153010892.xlsx.ms_office, Problem 9-2, Page 10 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P9-6 (Retail Inventory Method) The records for the Clothing Department of Sharapovas Discount Store are summarized below for the month of January. Inventory, January 1, at retail: $25,000 at cost: $17,000 Purchases in January, at retail: 137,000 at cost: 82,500 Freight-in, 7,000 Purchases returns, at retail: 3,000 at cost: 2,300 Transfers in from suburban branch, at retail: 13,000 at cost: 9,200 Net markups: 8,000 Net markdowns: 4,000 Inventory losses due to normal breakage, etc, at retail: at retail: 400 Sales at retail: 95,000 Sales returns: 2,400 Instructions: (a) Compute the inventory for this department as of January 31, at Retail Cost $17,000 82,500 7,000 (2,300) 9,200 113,400 Retail $25,000 137,000 (3,000) 13,000 172,000 8,000 180,000 (4,000) ($95,000) 2,400 (92,600) (400) $83,000 $113,400 $180,000 = 63.0%

Beginning Inventory Purchases Freight-in Purchase returns Transfers in from suburban branch Net markups Net markdowns Sales Sales returns Net sales Inventory losses due to breakage Ending inventory at retail Cost-to-retail ratio =

(b) Compute the inventory for this department as of January 31, at lower of average cost or market. Ending inventory at lower of average cost or market $83,000 63.0% = $52,290

Note: Due to significant digits of worksheets and calculators, small differences may occur.

153010892.xlsx.ms_office, Problem 9-6 Solution, Page 11 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P9-6 (Retail Inventory Method) The records for the Clothing Department of Sharapovas Discount Store are summarized below for the month of January. Inventory, January 1, at retail: $25,000 at cost: $17,000 Purchases in January, at retail: 137,000 at cost: 82,500 Freight-in, 7,000 Purchases returns, at retail: 3,000 at cost: 2,300 Transfers in from suburban branch, at retail: 13,000 at cost: 9,200 Net markups: 8,000 Net markdowns: 4,000 Inventory losses due to normal breakage, etc, at retail: at retail: 400 Sales at retail: 95,000 Sales returns: 2,400 Instructions: (a) Compute the inventory for this department as of January 31, at Retail Cost Amount Amount Amount Amount Amount Formula Retail Amount Amount Amount Amount Formula Amount Formula Amount Amount Amount Formula Amount Formula Value Value = Formula

Beginning Inventory Title Title Title Transfers in from suburban branch Net markups Net markdowns Title Title Title Title Ending inventory at retail Cost-to-retail ratio =

(b) Compute the inventory for this department as of January 31, at lower of average cost or market. Ending inventory at lower of average cost or market Value Percentage Formula

Note: Due to significant digits of worksheets and calculators, small differences may occur.

153010892.xlsx.ms_office, Problem 9-6, Page 12 of 12, 6/20/2013, 6:59 AM