Thursday, May 21, 2020

Teddy Roosevelt Essays - 919 Words

nbsp;nbsp;nbsp;nbsp;nbsp;Theodore Roosevelt, born October 27, 1858, was the United States’ twenty sixth President. Roosevelt was born into a wealthy and socially dominant family. Though he was a quick thinker and very bright, he was not very physically fit; Roosevelt had severe asthma attacks as a youth. (Andrews) Roosevelt attended Harvard College starting with a science major, but his eventual majors were law and politics. After graduating Harvard in 1880, Roosevelt married his first wife, had his first child, and lost his wife two weeks after the birth of their daughter on Valentines day 1884. He had also begun his career in politics, joining the Republican Party when they were treated like a private organization, having few†¦show more content†¦Roosevelt had stated, â€Å"If I wanted anything to eat it was wise to carry it with me.† He also suggested, â€Å"I would earnestly advise the men of every volunteer organization always to proceed upon the belief t hat their supplies will not turn up.† (Roosevelt) nbsp;nbsp;nbsp;nbsp;nbsp;In June of 1898 at the battle of San Juan Hill, Roosevelt was given notification that there might be orders to fall back. After seeing his men fight, he told General Joseph Wheeler that he did not know if he could follow those orders. Roosevelt and his men were often told that the battles would take place at night and it so happened that one Saturday morning there were shots fired and by morning there was artillery being fired at the regiment. (Roosevelt) nbsp;nbsp;nbsp;nbsp;nbsp;After the battle at San Juan Hill, the men were exhausted and hungry. They had managed to gain control of some of the Spanish’s supplies and provisions. (Jeffers) nbsp;nbsp;nbsp;nbsp;nbsp;Despite the Rough Riders accomplishments during the Spanish American War, Washington was given the option to withdraw their troops from Cuba, but the proposal was vetoed. Allowing the men to fulfill their patriotic duty, but also caused a huge increase in sickness and fatigue. (Roosevelt) Even though Roosevelt and his men were always eager to fight, three fourths of the men had either died, became sick withShow MoreRelatedEssay on Teddy Roosevelt1199 Words   |  5 Pages Roosevelt, Theodore (American President) (c. 1858-1919) Roosevelt’s presidency began with the chaos of McKinley’s assassination in 1901, when Roosevelt was 43 years old, and ended after his second term, achieved by his election to President in 1904. Although Roosevelt’s selection as McKinley’s Vice-President was more of a political pay-off, and the New York political machine, fearing an independent Roosevelt, was more than ready to say good-bye to Roosevelt as Governor, Roosevelt is acknowledgedRead MoreTeddy Roosevelt : A Sick Kid808 Words   |  4 PagesTeddy Roosevelt. Adventurist, Workaholic, Naturalist, Republican, Hunter etc. He did it all. But he didn’t exactly start that way. We all know Teddy as the one who just wouldn’t stop. He did EVERYTHING, if he had an idea, he put it out there and no matter how dumb the idea the public supported him because they loved him so much. But once again, he didn’t start that way. Teddy Roosevelt was a sick kid from the very start, he had a breathing problem. He had an inhaler ever since he knew how to useRead MoreEssay on Teddy Roosevelt and the Panama Canal512 Words   |  3 PagesTeddy Roosevelt and the Panama Canal Teddy Roosevelt was a man who liked to creat a stir wherever he went. He loved mingling with people to boost his own self-image.He loved to impress people with his cowboyism, his collection of guns, and his pintsize spectacles.Also, Roosevelt was a direct-actionist.He wanted to keep the country moving foward and preserve his public image at the same time. He wanted to display to his supporters that he could lead the country and be a jovial person simulataneouslyRead MoreTeddy Roosevelt in the Progressive Era Essay1180 Words   |  5 PagesTeddy Roosevelt in the Progressive Era Progressivism originated as the optimistic vision that society was capable of improvement, and that continued growth and advancement were the nations destiny. This, however, would require direct, purposeful human intervention in social and economic affairs. Progressive reformers wished to limit the disperse authority and wealth by empowering the government to regulate or break up trusts at both state and national levels. They also believed in the importanceRead MoreTheodore Roosevelt : A Young Boy Teddy976 Words   |  4 Pages Theodore â€Å"Teddy† Roosevelt Jr was born on October 27, 1858 in New York City. His parents were Theodore â€Å"Thee† Roosevelt, Sr. and Martha Stewart Bulloch. He was the second born out of four children who included his older sister Anna, younger brother Elliott and younger sister named Corinne. Elliott was the father of the First Lady Anna Eleanor Roosevelt, wife of President Franklin Delano Roosevelt. As a young boy Teddy suffered from severe asthma, which had a huge impact on his body and health. RooseveltRead MoreTeddy Roosevelt And The Development Of The National Parks1353 Words   |  6 Pages Teddy Roosevelt and the development of the National Parks 11/30/2014 Nicholas Wittkopp He was the youngest candidate to become president. He was the leader of the progressive movement. He was our twenty sixth president, he served from 09/14/1901 to 03/4/1909. He was a writer of thirty five books. He was New York s thirty third governor. He was a naturalist. He was a war hero in the Spanish-American War. He was a member of rough riders. He trust busted forty corporations. He madeRead MoreTheodore Teddy Roosevelt And The President Of The United States955 Words   |  4 Pages Theodore â€Å"Teddy† Roosevelt was the 26th president of the United States. He was born in New York City on October 27, 1858. His parents, Theodore and Martha Bulloch Roosevelt, had 4 children. Teddy’s brother’s name was Elliot, and his sisters were Anna and Corinne. As a child, Teddy was active and curious. He had asthma, though, and was also nearsighted. He traveled a lot with his family. He went to Europe and the Middle East when he was 10 and 14. When he was 12, his father built a gymnasium forRead MoreTeddy Roosevelt: An American Hero Essay examples1986 Words   |  8 Pagesï » ¿Trey Draper Dr. Rager History 136 10-21-2011 Theodore Roosevelt: American Hero Although many people at the time disagreed with the actions of Teddy Roosevelt, he played a very important role in the Spanish-American war by not only preparing the navy, but on the front lines of combat as well. Theodore Roosevelt, the 26th president of the United States of America, had a huge impact on the Spanish-American war in many ways. The war also had a huge impact on Theodore Roosevelt’s politicalRead MoreTheodore (‘Teddy’ or T.R.) Roosevelt was born on October 27, 1858 in New York City, New York. Teddy800 Words   |  4 PagesTheodore (‘Teddy’ or T.R.) Roosevelt was born on October 27, 1858 in New York City, New York. Teddy was the second born out of four children in his family. As a child I wouldn’t say he was the healthiest. He suffered from asthma and poor eye sight, which explains his glasses, throughout his childhood. Since he was sick all of the time he didn’t attend school, he was home schooled. His mom and sometime s aunt would be his teacher. His family traveled around Europe, while they were in Europe, Teddy attendedRead MoreThe Meaning and Value of a Teddy Bear721 Words   |  3 Pagesof a bear doll named teddy bear. Teddy bear is a symbol of innocent that protects children from fear and makes children to have good-night-sleep. Teddy Bears have been hogging loves from kids all over the world for a long time. Sometimes they are great companions when children are traveling their dream lands, sometimes they are warriors that save kids from nightmare and sometimes they come to lives when kids open their limitless imagination land. People’s love toward the teddy bear don’t stop even

Wednesday, May 6, 2020

Supreme Court Justice Debate the Constitution Essay

Essays on Supreme Court Justice Debate the Constitution Essay The paper "Supreme Court Justice Debate the Constitution" is an outstanding example of an essay on law. To start with, Court judges Stephen Breyer and Antonin Scalia are legitimate extremes, however in no way, shape or form enemies. In October 2011, the two Justices testified before a Senate Judiciary Committee in Congress (Andrea, 2011). The conversation forms the foundation of all legal debates and how to translate the Constitution of the United States of America. For close to two hours, the Justices talked about the contrasts between the role of judges and their judicial philosophies. The open debate has Scalia and Breyer explaining the likelihood of persuasion, drawbacks of Constitutional history, and the possibility or existence of Justice and equity. Without any doubt, the two Justices concur more than they differ. Collectively, they concur in most of the cases they considered. Justice Scalia accepts the fact that judges ought to focus and strictly observe the expectations of the mastermind behind the expressions of the Constitution. Indeed, Scalia is considerate about any deviations from the initial meaning of the Constitutions content. He unequivocally condemns Supreme Court rulings that enhance activist judiciary rather than playing a neural part in a democratic society (Moran, 2011, p30). However, Justice Breyer believes that the ideas outlined by the framers of the Constitution should be restructured to apply to modern society. Breyer concentrates fundamentally on making Americas examination in democracy useful by giving a voice to the people through the aggregate judgments and opinions of the nine unelected Justices of the Supreme Court (p.36)In conclusion, Justices Scalia and Breyer talk about the diverse speculations of h ow to translate and implement the U.S Constitution to cases and how they influence democracy and the daily lives of American citizens. While Justice Breyer interprets the Constitution by using the Living Constitution approach, Scalia expresses his concerns using the Textual approach. As observed, the two Justices concur that there is a misrepresentation of legal moderation and that religion cases are hard. Also, Scalia and Breyer agree to the fact that judicial activism bears no results.

Impact of Marketization on Higher Education in the UK Free Essays

Abstract Marketization is an increasing phenomenon within the current environment. Every sector of the economy continues to adopt the concept of marketization in a bid to enhance efficiency, effectiveness, and competitiveness of the affected sectors. One of the main sectors identified in the current literature review is higher education. We will write a custom essay sample on Impact of Marketization on Higher Education in the UK or any similar topic only for you Order Now The paper below provides a critical literature review on the basis of theoretical and empirical reviews. The theoretical review identifies and explains the theory of marketization whereas the empirical review evaluates the varied findings and views of the scholars and researchers on the impact of marketization on higher education. The results of the review state that there are both negative and positive impacts of marketization on higher education in respect to UK. Key words: Marketization, higher education, theoretical, empirical Introduction The following is a review of literature on the impact of marketization on higher education in the UK. Evidently, marketization, which involves the restructuring, remodelling, and transformation of publicly-owned enterprises or organisations into market-based entities, continues to be a common phenomenon especially in the current century. Through marketization, majority of the higher learning institutions in the UK have been transformed from being owned by the government to market-oriented institutions to enhance quality and operations. A number of researchers and scholars have conducted an evaluation and analysis on the impact of the concept on higher education in the UK. Therefore, the current paper aims at reviewing some of the literatures explaining the impact of marketization on higher education. In accomplishing this objective, the current literature review is performed on the basis of theoretical and empirical reviews. The review ends with a concluding remark that summarises th e main points whilst stating the stand of the analysis. Theoretical Review Marketization theory describes the functionality of marketization. According to Raffe and Croxford (2013), the theory of marketization provides a good foundation to nations in introducing the aspects of choices, competition, and public accountability, which are essential in enhancing the quality of products or services under production. Evidently, the theory of marketization helps in eliminating different economic problems and concepts such as unfavourable market competition, inefficiencies in markets, and the lack of players and market forces that are likely to influence the production process. Based on the theory of marketization argues it is important to transform an entire economy by getting rid of the planned economic system and allowing market-based scenario to prevail in the economy in question (Quinlan, 2014). Amongst the aspects discussed within the theory of marketization include liberalisation, contracting reforms, stimulating of competition, incentive creation, and outsou rcing reforms that will help in transforming the higher education sector. Other aspects explained within the theory of marketization include the reduction of regulation, opening market-oriented systems, and effective allocation of resources (Xue-chao, 2012). From such perceptions, it is arguably important to note that the theory of marketization explains the fact that through the concept of liberalising an economy all the trade barriers and price controls are significantly removed, which provide space to the various stakeholders to actively engage in ensuring that there is high quality production process. From the perspective of the marketization theory, a number of economies across the globe are calling upon for the deregulation of institutions of higher learning with the aim of making them more competitive within the global market. The 2013 year has been a year of marketization of the higher education system in the UK (Raffe Croxford, 2013). Throughout the 2013, UK developed policies and strategies towards attaining a fully marketised system especially for the higher education sector. Since 2013 UK has developed numerous and possibly effective policies that are aimed at encouraging the expansion of higher education. Expansion of higher education as anticipated by the UK government through development of various policies has the sole objective of increasing participation of all the stakeholders in education (McNeill, 2012). Increased participation of all involved stakeholders in the higher education courtesy of marketization concept results into a more educated workforce, which has actually enabled the UK to experience a growth in its economy. Indeed, marketization of the higher education in UK has offered a perfect ground-breaking insight on how the government policies can be employed towards altering the structures and operations of different institutions for higher learning especially universities and technical colleges (Xue-chao, 2012). The following section provides an empirical review of the previous studies and views of the scholars on the impact of the marketization on higher education with special focus to the UK. Empirical Review Different scholars and researchers have performed evaluation, analysis, and studies on the impact of marketization on higher education in the UK. Brown (2013) conducted a study that aimed at describing the concept of market-based policies with regards to higher education in the UK. In addition, Brown (2013) also aimed at assessing the historical background regarding the current reforms within higher education in UK especially in respect to marketization. The study by Brown (2013) established that there has been an improvement in higher education as seen within the idea of competition, efficiency, responsiveness, as well as innovation courtesy of marketization. From the perspective of the theory of marketization, Brown (2013) argued that marketization has provided the opportunity for different stakeholders other than government to also engage in providing services of education and learning in higher institutions of learning. Therefore, from the study of Brown it is evident that market ization has positive impact on higher education within UK. The other study was performed by Hommel and King (2013) who sought to find out the financial dimension of specific reforms by the government especially in respect to developing an educational sector that is risk-based. From the corporate risk management literature, Hommel and King (2013) found out that business schools, which continues to adopt the risk-based regulations and reforms to meet their objectives and targets with respect to learning process, face a lot of challenges especially in line with managing risks. In this respect, Hommel and King (2013) established the fact that business schools especially within the ranks of universities and other institutions of higher learning should be careful about their financial solvency through effective and efficient maintenance of functioning risks. Hence, on the perspective of the study conducted by Hommel and King (2013), it is evident that in as much as marketization provides some positive impacts there are negative impacts that accrue due to the concept for instance the increase exposure to various financial risks. Natale and Doran (2012) also performed a study on the marketization of education in a bid to identify the ethical dilemma that exists in the same. From the study, it is clear that the marketing of education continues to be epidemic, which calls for the suffusion of both practices and principles of business in the management of higher education. However, Natale and Doran (2012) established in their study that in as much as the higher education is becoming more advanced, efficient, effective, and very competitive, the idea of exposing higher education to marker-based systems has resulted into increased costs of education. As a result, there is a growing ethical concern, that is, even though on one side the higher education sector is becoming more efficient, effective, and competitive, the cost of accessing such higher education has become higher and unattainable since the pricing has been left on market forces. Such views have also been put forward by Tapper (2013), who argue that desp ite positive impacts of marketization on higher education, the market-based systems have exposed the pricing of higher education to market forces, which makes the entire cost expensive. Hence, there is need to identify whether to enhance efficiency at the expense of the cost of providing education. The other study was conducted by Holmwood (2012) with an aim of analysing markets and publics as the new battlegrounds for the sector of higher education across many economies. Holmwood (2012) evaluated the recent policy changes especially started by the British Conservative-Liberal Democrat coalition government. The policy by the coalition government is a preferred paradigm shift with respect to restructuring and remodelling of the higher education sector. The findings from the study showed that there has been radical and neo-liberal approach towards transforming the higher education sector. So far, the policies developed by the government have been very successful in enhancing the efficiency, effectiveness, and competitiveness of higher education. However, Holmwood (2012) stated in the study that the only problem with transforming higher education sector into a market-based system is the fact that monocultural perspectives are likely to result into value of what is lost. Despite th e problem of monoculture as created by the market-based systems, Holmwood (2012) strongly believe that marketization is indeed a good concept; a view that has also been supported by Nickola et al (2012). Consequently, marketization continues to be a good foundation for changing higher education in the UK. Conclusion The above is a literature review explaining the impacts of marketization on higher education with special focus to the UK. The review contains two main sections, namely, the theoretical review and the empirical review. On the basis of the theoretical review, it is evident that the theory of marketization calls for the removal of the public or government dominance in the running and management of institutions of higher learning. What’s more, the theory of marketization explains that through changing the higher education sector to market-based system, the private sector is highly involved, which results into enhanced efficiency, effectiveness, and competitiveness of the higher institutions of learning. On a different perspective, the empirical review provides an analysis and evaluation of the various findings by different researchers and scholars on the impact of marketization on higher education. From the empirical review, it is clear that whereas there are numerous positive im pacts of marketization on higher education, the concept also has negative impacts on the same sector. List of References Brown, R. 2013, â€Å"Access to Higher Education: The Shift towards Market-Based Policies in the UK†, DICE Report, vol. 11, no. 2, pp. 23-27. Holmwood, J. 2012, â€Å"Markets versus Publics: The New Battleground of Higher Education†, Harvard International Review, vol. 34, no. 2, pp. 12-15. Hommel, U. King, R. 2013, â€Å"The emergence of risk-based regulation in higher education†, The Journal of Management Development, vol. 32, no. 5, pp. 537-547. McNeill, T., 2012, ‘‘Don’t affect the share price’’: social media policy in higher education as reputation management. Research in Learning Technology, vol. 20. Natale, S.M. Doran, C. 2012, â€Å"Marketization of Education: An Ethical Dilemma†, Journal of Business Ethics, vol. 105, no. 2, pp. 187-196. Nickolai, D. H., Hoffman, S. G., Trautner, M. N., 2012, Can a knowledge sanctuary also be an economic engineThe marketization of higher education as institutional boundary work. Sociology Compass, vol. 6, no. 3; Pp. 205-218. Quinlan, K. M., 2014, Everything for saleThe marketisation of UK higher education. By Roger Brown with Helen Carasso. British Journal of Educational Studies, (ahead-of-print), 1-3. Raffe, D., Croxford, L., 2013, How stable is the stratification of higher education in England and Scotland?. British Journal of Sociology of Education, (ahead-of-print), 1-23. Tapper, T., 2013, Roger Brown and H. Carasso: Everything for saleThe marketisation of UK higher education. Higher Education, vol. 66, no. 5; Pp. 641-643. Xue-chao, Y. H. J. M., 2012, Marketization of Higher Education in the UK: The Perspective of Financing [J]. Tsinghua Journal of Education, vol. 3, no. 015. How to cite Impact of Marketization on Higher Education in the UK, Essay examples

Saturday, April 25, 2020

Platos Allegory of the Cave in Pleasantville Essay Example

Platos Allegory of the Cave in Pleasantville Paper Writer and director Gary Ross captured the essence of Plato’s philosophical views in his movie, Pleasantville. The movie is about two siblings, David and Jennifer, who live in completely different high school social scenes. Jennifer is the wild, extroverted teen who is obsessed with partying and boy drama. David, on the other hand, is a social outcast and spends most of his time watching TV, specifically, his favorite show, Pleasantville. David idolizes the show because of the perfect town in which everyone is accepted and there is never anything that goes wrong. When the siblings’ mother goes away, the two are left arguing over what TV channel to watch. As their fighting develops, they eventually break the remote, which leads to the plot twist when the two are transported into the town of Pleasantville. This movie directly relates to Plato’s philosophical beliefs, specifically his conclusions about the Allegory of the Cave. However, the movie can also be loosely related to Plato’s noumenal and phenomenal realms in the sense that it is hard to tell the difference between the intelligible and sensible realms. Plato’s beliefs are interpreted and modernized in the movie, which demonstrate the four truths that Plato realizes in his Allegory of the Cave conclusions. Pleasantville helps the audience understand the conclusions Plato draws from the Allegory of the Cave. Plato’s first conclusion explains why gathering knowledge and education can be difficult. The movie is a parallel because David and Jennifer’s cave is the life they lead as high school students. They are brought to the light when they are transported to Pleasantville. We will write a custom essay sample on Platos Allegory of the Cave in Pleasantville specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Platos Allegory of the Cave in Pleasantville specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Platos Allegory of the Cave in Pleasantville specifically for you FOR ONLY $16.38 $13.9/page Hire Writer There, they must adapt to a different lifestyle and confront the truths about themselves that they ignored in the superficial world they once inhabited. When they are brought to Pleasantville, they also act as a philosopher who is bringing knowledge to the small town. For the people that live in Pleasantville, they are stuck in a cave and David and Jennifer are their keys to the light. The movie contrasts parallel universe’s, showing that perspective is what makes someone stuck in a cave. Because the people of Pleasantville and David and Jen learn new things about themselves, they all escaped the cave and gathered knowledge. The road to enlightenment was not an easy road, however. David and Jennifer had a difficult time maturing and leaving behind their old masks; the town of Pleasantville had a very difficult time gaining a new perspective—the town leaders tried everything they could to forbid people from leaving their perfect little world. This parallel of the cave explains Plato’s first conclusion of how education can often be difficult because it means turning your back on everything familiar. The movie also very clearly identifies with Plato’s second conclusion that explains why philosophers are often ridiculed. When Jennifer and David were transported to Pleasantville, they were immediately hated for disrupting the order in the town. They had to learn how to cope with a completely different world, while also instilling in others their new perspective and experience. While Pleasantville is black and white, the town represents the ignorance that people in the cave feel. However, when the town begins to turn to color, the people are finally seeing the light and escaping from the cave. This I somewhat ironic because, for both the people of Pleasantville and David and Jen, they all begin their journey in black and white. This is interesting because, from Jen and David’s perspective, the two had already experienced the world and were sent to Pleasantville to not disrupt anything. They, however, were very mistaken. They were just as ignorant as the people of Pleasantville, just in a different way. Jen’s radical actions of having sex when she goes on a date in Pleasantville do not make her turn to color because her actions are what would be expected from her back in her own cave. She only turns to color when she gets in touch with her emotions and relieves some insecurities that had hindered her from being her full self. The people that first turn to color are ridiculed by town leaders and people that had not yet left the cave. This explains why philosophers are often ridiculed; the people that were in color, representing philosophers, had divorced mundane concerns and found their true inner spirit. Plato’s final two conclusions describe the nature of education and the role of the philosopher, which are also dramatized in the movie. Plato tells that the role of an educator is to point their students in the right direction. In Pleasantville, the people are both students and teachers. They are teachers to Jen and David; the townspeople teach Jen and David the importance of tradition and good values. The townspeople are also students: they learn from Jen and David how to ignite their inner flame and break from the cave that Pleasantville once was. Similarily, Jen and David are also both students and teachers. They are students in that they take the lessons from the people of Pleasantville in order to help them reach the sun and gather knowledge about a world they were unfamiliar with. They are teachers in that they help orient the people of Pleasantville to get in touch with their daring and adventurous side. In this way, being a teacher is the role of the philosopher—the teacher must help others escape from the cave to experience life. Everyone that turned to color towards the beginning of the movie were the â€Å"philosophers† or â€Å"teachers† that helped instigate everyone else to turn to color. They helped share their knowledge and encouraged people to reach the sun and gather all new kinds of knowledge. Plato’s final two conclusions explain the nature of the philosopher in educating others and how the student has all the information inside them, they just need to tap into their inner mind to retrieve it. Plato’s Allegory of the Cave and Gary Ross’s Pleasantville each were very insightful in helping understand the other. By studying the allegory, it was very easy to understand the themes and symbols present in Pleasantville. Conversely, by watching Pleasantville, it was very easy to understand and modernize the conclusions Plato draws in his allegory. Through comprehending both, it is easier to understand Plato’s four truths: why knowledge can be difficult; why philosophers are ridiculed; the nature of education; and the role of the philosopher.

Wednesday, March 18, 2020

Intermediate Accounting Ch 8 Essays

Intermediate Accounting Ch 8 Essays Intermediate Accounting Ch 8 Paper 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 effects 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. 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 financ ial 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, Decemb er 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 (10â₠¬â€œ15 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 95,12 0 105,600 100,000 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 units 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. 168 9 = *($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

Sunday, March 1, 2020

Creative Thinking Lesson Plans for Teachers

Creative Thinking Lesson Plans for Teachers Lesson plans and activities for teaching about inventions by increasing creativity and creative thinking. The lesson plans are adaptable for grades K-12 and were designed to be done in sequence. Teaching Creativity Creative Thinking Skills When a student is asked to invent a solution to a problem, the student must draw upon previous knowledge, skills, creativity, and experience. The student also recognizes areas where new learnings must be acquired in order to understand or address the problem. This information must then be applied, analyzed, synthesized, and evaluated. Through critical and creative thinking and problem-solving, ideas become reality as children create inventive solutions, illustrate their ideas, and make models of their inventions. Creative thinking lesson plans provide children with opportunities to develop and practice higher-order thinking skills. Throughout the years, many creative thinking skills models and programs have been generated from educators, seeking to describe the essential elements of thinking and/or to develop a systematic approach to teaching thinking skills as part of the school curricula. Three models are illustrated below in this introduction. Although each uses different terminology, each model describes similar elements of either critical or creative thinking or both. Models of Creative Thinking Skills Benjamin BloomCalvin TaylorIsaksen and Treffinger The models demonstrate how creative thinking lesson plans could provide an opportunity for students to experience most of the elements described in the models. After teachers have reviewed the creative thinking skills models listed above, they will see the critical and creative thinking and problem-solving skills and talents that can be applied to the activity of inventing. The creative thinking lesson plans that follow can be used across all disciplines and grade levels and with all children. It can be integrated with all curricular areas and used as a means of applying the concepts or elements of any thinking skills program that may be in use. Children of all ages are talented and creative. This project will give them an opportunity to develop their creative potential and synthesize and apply knowledge and skills by creating an invention or innovation to solve a problem, just as a real inventor would. Creative Thinking - List of Activities Introducing Creative ThinkingPracticing Creativity with the ClassPracticing Creative Thinking with the ClassDeveloping an Invention IdeaBrainstorming for Creative SolutionsPracticing the Critical Parts of Creative ThinkingCompleting the InventionNaming the InventionOptional Marketing ActivitiesParent InvolvementYoung Inventors Day Imagination is more important than knowledge, for imagination embraces the world. -  Albert Einstein Activity 1: Introducing Inventive Thinking and Brainstorming Read about the Lives of Great InventorsRead the  stories  about great inventors in class or let students read themselves. Ask students, How did these inventors get their ideas? How did they make their ideas a reality? Locate books in your library about inventors, invention, and creativity. Older students can locate these references themselves. Also, visit the  Inventive Thinking and Creativity Gallery Talk to a Real InventorInvite a local inventor to speak to the class. Since local inventors are not usually listed in the phone book under inventors, you can find them by calling a  local patent attorney  or your  local intellectual property law association. Your community may also have a  Patent and Trademark Depository Library  or an  inventors society  that you may contact or post a request. If not, most of your major companies have a research and development department made up of people who think inventively for a living. Examine InventionsNext, ask the students to look at the things in the classroom that are inventions. All the inventions in the classroom that have a U.S. patent will have a  patent number. One such item is probably  the pencil sharpener. Tell them to check out their house for patented items. Let the students brainstorm a list all of the inventions they discover. What would improve these inventions? DiscussionIn order to guide your students through the inventive process, a few preliminary lessons dealing with creative thinking will help set the mood. Begin with a brief explanation of brainstorming and a discussion on the rules of brainstorming. What is Brainstorming?Brainstorming is a process of spontaneous thinking used by an individual or by a group of people to generate numerous alternative ideas while deferring judgment. Introduced by Alex Osborn in his book Applied Imagination, brainstorming is the crux of each of the stages of all problem-solving methods. Rules for Brainstorming No CriticismAllowed People tend to automatically evaluate each suggested ideatheir own as well as others. Both internal and external criticism  is  to be avoided while brainstorming. Neither positive nor negative comments are allowed. Either type inhibits the free flow of thought and requires time which interferes with the next rule. Write each spoken idea down as it is given and move on.Work for QuantityAlex Osborn stated that Quantity breeds quality. People must experience a brain drain (get all the common responses out of the way) before the innovative, creative ideas can surface; therefore, the more ideas, the more likely they are to be quality ideas.Hitchhiking WelcomeHitchhiking occurs when one members idea produces a similar idea or an enhanced idea in another member. All ideas should be recorded.Freewheeling EncouragedOutrageous, humorous, and seemingly unimportant ideas should be recorded. It is not uncommon for the most off-the-wall idea to be the best. Activity  2: Practicing Creativity with the Class Step 1:  Cultivate the following creative thinking processes described by Paul Torrance and discussed in The Search for Satori and Creativity (1979): Fluency the production of a great number of ideas.Flexibility the production of ideas or products that show a variety of possibilities or realms of thought.Originality the production of ideas that are unique or unusual.Elaboration the production of ideas that display intensive detail or enrichment. For practice in elaboration, have pairs or small groups of students choose a particular idea from the brainstorming list of invention ideas and add the flourishes and details that would develop the idea more fully. Allow the students to share their innovative and  inventive ideas. Step 2:  Once your students have become familiar with the rules of brainstorming and the creative thinking processes, Bob Eberles  Scamperr  technique for brainstorming could be introduced. Substitute What else instead? Who else instead? Other ingredients? Other material? Other power? Another place?Combine How about a blend, an alloy, an ensemble? Combine purposes? Combine appeals?Adapt What else is like this? What other idea does this suggest? Does past offer parallel? What could I copy?Minify Order, form, shape? What to add? More time?Magnify Greater frequency? Higher? Longer? Thicker?Put to other uses New ways to use as is? Other uses I modified? Other places to use? Other people, to reach?Eliminate What to subtract? Smaller? Condensed? Miniature? Lower? Shorter? Lighter? Omit? Streamline? Understate?Reverse Interchange components? Another pattern?Rearrange another layout? Another sequence? Transpose cause and effect? Change pace? Transpose positive and negative? How about opposites? Turn it backward? Turn it upside-down? Reverse roles? Step 3:  Bring in any object or use objects around the classroom to do the following exercise. Ask the students to list many new uses for a familiar object by using the Scamper technique with regard to the object. You could use a paper plate, to begin with, and see how many new things the students will discover. Make sure to follow the rules for brainstorming in Activity 1. Step 4:  Using literature, ask your students to create a new ending to a story, change a character or situation within a story, or create a new beginning for the story that would result in the same ending. Step 5:  Put a list of objects on the chalkboard. Ask your students to combine them in different ways to create a new product. Let the students make their own list of objects. Once they combine several of them, ask them to illustrate the new product and explain why it might be useful. Activity 3: Practicing Inventive Thinking with the Class Before your students begin to find their own problems and create unique inventions or innovations to solve them, you can assist them by taking them through some of the steps as a group. Finding the Problem Let the class list problems in their own classroom that need solving. Use the brainstorming technique from Activity 1. Perhaps your students never have a pencil ready, as it is either missing or broken when it is time to do an assignment (a great brainstorming project would be to solve that problem). Select one problem for the class to solve using the following steps: Find several problems.Select one to work on.Analyze the situation.Think of many, varied, and unusual ways of solving the problem. List the possibilities. Be sure to allow even the silliest possible solution, as creative thinking must have a positive, accepting environment in order to flourish. Finding a Solution Select one or more possible solutions to work on. You may want to divide into groups if the class elects to work on several of the ideas.Improve and refine the idea(s).Share the class or individual solution(s)/invention(s) for solving the class problem. Solving a class problem and creating a class invention will help students learn the process and make it easier for them to work on their own invention projects. Activity 4: Developing an Invention Idea Now that your students have had an introduction to the inventive process, it is time for them to find a problem and create their own invention to solve it. Step One:  Begin by asking your students to conduct a survey. Tell them to interview everyone that they can think of to find out what problems need solutions. What kind of invention, tool, game, device, or idea would be helpful at home, work, or during leisure time? (You can use an Invention Idea Survey) Step Two:  Ask the students to list the problems that need to be solved. Step Three:  comes the decision-making process. Using the list of problems, ask the students to think about which problems would be possible for them to work on. They can do this by listing the pros and cons for each possibility. Predict the outcome or possible solution(s) for each problem. Make a decision by selecting one or two problems that provide the best options for an inventive solution. (Duplicate the Planning and Decision-Making Framework) Step Four:  Begin an  Inventors Log  or Journal. A record of your ideas and work will help you develop your invention and protect it when completed. Use Activity Form - Young Inventors Log to help students understand what can be included on every page. General Rules For Authentic Journal Keeping Using a  bound notebook, make notes each day about the things you do and learn while working on your invention.Record your idea and how you got it.Write about problems you have and how you solve them.Write in ink and do not erase.Add sketches and drawings to make things clear.List all parts, sources, and costs of materials.Sign and date all entries at the time they are made and have them witnessed. Step Five:  To illustrate why record-keeping is important, read the following story about Daniel Drawbaugh who said that he invented the telephone, but didnt have one single paper or record to prove it. Long before  Alexander Graham Bell  filed a patent application in 1875, Daniel Drawbaugh claimed to have invented the telephone. But since he had no journal or record, the  Supreme Court  rejected his claims by four votes to three. Alexander Graham Bell had excellent records and was awarded the patent for the telephone. Activity 5: Brainstorming for Creative Solutions Now that the students have one or two problems to work on, they must take the same steps that they did in solving the class problem in Activity Three. These steps could be listed on the chalkboard or a chart. Analyze the problem(s). Select one to work on.Think of many, varied, and unusual ways of solving the problem. List all of the possibilities. Be non-judgmental. (See Brainstorming in Activity 1 and SCAMPER in Activity 2.)Select one or more possible solutions to work on.Improve and refine your ideas. Now that your students have some exciting possibilities for their invention projects, they will need to use their critical thinking skills to narrow down the possible solutions. They can do this by asking themselves the questions in the next activity about their inventive idea. Activity 6: Practicing the Critical Parts of Inventive Thinking Is my idea practical?Can it be made easily?Is it as simple as possible?Is it safe?Will it cost too much to make or use?Is my idea really new?Will it withstand use, or will it break easily?Is my idea similar to something else?Will people really use my invention? (Survey your classmates or the people in your neighborhood to document the need or usefulness of your idea - adapt the invention idea survey.) Activity 7: Completing the Invention When students have an idea that meets most of the above qualifications in Activity 6, they need to plan how they are going to complete their project. The following planning technique will save them a great deal of time and effort: Identify the problem and a possible solution. Give your invention a name.List the materials needed to illustrate your invention and to make a model of it. You will need paper, pencil, and crayons or markers to draw your invention. You might use cardboard, paper, clay, wood, plastic, yarn, paper clips, and so forth to make a model. You might also want to use an art book or a book on model-making from your school library.List, in order, the steps for completing your invention.Think of the possible problems that might occur. How would you solve them?Complete your invention. Ask your parents and teacher to help with the model. In SummaryWhat - describe the problem. Materials - list the materials needed. Steps - list the steps to complete your invention. Problems - predict the problems that could occur. Activity 8: Naming the Invention An invention can be named in one of the following ways: Using the inventors  name:Levi Strauss   LEVIS ® jeansLouis Braille Alphabet SystemUsing the components or ingredients of the invention:Root BeerPeanut ButterWith initials or acronyms:IBM  ®S.C.U.B.A. ®Using word  combinations (notice repeated  consonant sounds  and rhyming words):KIT KAT  ®HULA HOOP  Ã‚ ®PUDDING POPS  ®CAPN CRUNCH  ®Using the products function:SUPERSEAL  ®DUSTBUSTER  ®vacuum cleanerhairbrushearmuffs   Activity Nine: Optional Marketing Activities Students can be very fluent when it comes to listing ingenious names of products out on the market. Solicit their suggestions and have them explain what makes each name effective. Each student should generate names for his/her own invention. Developing a Slogan or JingleHave the students define the terms slogan and jingle. Discuss the purpose of having a slogan. Sample slogans and jingles: Things go better with Coke.COKE IS IT!  ®TRIX ARE FOR KIDS  ®OH THANK HEAVEN FOR 7-ELEVEN  ®TWOALLBEEFPATTIES...GE: WE BRING GOOD THINGS TO LIFE!  ® Your students will be able to recall many  slogans  and jingles! When a slogan is named, discuss the reasons for its effectiveness. Allow time for thought in which the students can create jingles for their inventions. Creating an AdvertisementFor a crash course in advertising, discuss the visual effect created by a television commercial, magazine, or newspaper advertisement. Collect magazine or newspaper ads that are eye-catchingsome of the ads might be dominated by words and others by pictures that say it all. Students might enjoy exploring newspapers and magazines for outstanding advertisements. Have students create magazine ads to promote their inventions. (For more advanced students, further lessons on advertising techniques would be appropriate at this point.) Recording a Radio PromoA radio promo could be the icing on a students advertising campaign! A promo might include facts about the usefulness of the invention, a clever jingle or song, sound effects, humor... the possibilities are endless. Students may choose to tape record their promos for use during the Invention Convention. Advertising ActivityCollect 5 - 6 objects and give them new uses. For instance, a toy hoop could be a waist-reducer, and some strange looking kitchen gadget might be a new type of mosquito catcher. Use your imagination! Search everywherefrom the tools in the garage to the kitchen drawerfor fun objects. Divide the class into small groups, and give each group one of the objects to work with. The group is to give the object a catchy name, write a slogan, draw an ad, and record a radio promo. Stand back and watch the creative juices flow. Variation: Collect magazine ads and have the students create new advertising campaigns using a different marketing angle. Activity Ten: Parent Involvement Few, if any, projects are successful unless the child is encouraged by the parents and other caring adults. Once the children have developed their own, original ideas, they should discuss them with their parents. Together, they can work to make the childs idea come to life by making a model. Although the making of a model is not necessary, it makes the project more interesting and adds another dimension to the project. You can involve parents by simply sending a letter home to explain the project and let them know how they may participate. One of your parents may have invented something that they can share with the class.   Activity Eleven: Young Inventors Day Plan a Young Inventors Day so that your students can be recognized for their  inventive thinking. This day should provide opportunities for the children to display their inventions and tell the story of how they got their idea and how it works. They can share with other students, their parents, and others. When a child successfully completes a task, it is important that (s)he be recognized for the effort. All children who participate in the Inventive Thinking Lesson Plans are winners. We have prepared a certificate that can be copied and given to all children who participate and use their inventive thinking skills to create an invention or innovation.