Intermediate Accounting Bus2
Ending inventory 149,000
A company began its fiscal year with inventory of $186,000. Purchases and cost of goods sold for the year were $945,000 and $982,000, respectively. What was the amount of ending inventory?
Gross profit $27,000,000 Gross profit ratio 50 %
Cast Iron Grills, Inc., manufactures premium gas barbecue grills. The company uses a periodic inventory system and the LIFO cost method for its grill inventory. Cast Iron's December 31, 2016, fiscal year-end inventory consisted of the following (listed in chronological order of acquisition): Units Unit Cost 5,000 $ 700 3,500,000.00 4,000 800 3,200,000.00 6,000 900 5,400,000.00 The replacement cost of the grills throughout 2017 was $1,000. Cast Iron sold 27,000 grills during 2017. The company's selling price is set at 200% of the current replacement cost. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2017 assuming that Cast Iron purchased 28,000 units during the year.
LIFO liquidation profit (loss) $15,000 Units Liquidated 5000 Difference in cost ($30 - $25) $5 Before Tax LIFO Liquidation Profit $25,000 Tax Effect ($25,000 * 40%) (10000.00) LIFO Liquidation Profit $15,000
Esquire Inc. uses the LIFO method to value its inventory. Inventory at January 1, 2016, was $500,000 (20,000 units at $25 each). During 2016, 80,000 units were purchased, all at the same price of $30 per unit. 85,000 units were sold during 2016. Esquire uses a periodic inventory system. Assuming an income tax rate of 40%, what is LIFO liquidation profit or loss that the company would report in a disclosure note accompanying its financial statements?
Correct inventory balance $204,000
Goods shipped to Kwok f.o.b. destination on December 20, 2016, were received on January 4, 2017. The invoice cost was $30,000. Goods shipped to Kwok f.o.b. shipping point on December 28, 2016, were received on January 5, 2017. The invoice cost was $17,000. Goods shipped from Kwok to a customer f.o.b. destination on December 27, 2016, were received by the customer on January 3, 2017. The sales price was $40,000 and the merchandise cost $22,000. Goods shipped from Kwok to a customer f.o.b. destination on December 26, 2016, were received by the customer on December 30, 2016. The sales price was $20,000 and the merchandise cost $13,000. Goods shipped from Kwok to a customer f.o.b. shipping point on December 28, 2016, were received by the customer on January 4, 2017. The sales price was $25,000 and the merchandise cost $12,000.
General Journal Debit Credit Inventory 5,000 Accounts payable 5,000 Inventory 300 Cash 300 Accounts payable 600 Inventory 600 Cash 5,200 Sales revenue 5,200 Cost of goods sold 2,800 Inventory 2,800
John's Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May 2016: John's purchased merchandise on account for $5,000. Freight charges of $300 were paid in cash. John's returned some of the merchandise purchased in (1). The cost of the merchandise was $600 and John's account was credited by the supplier. Merchandise costing $2,800 was sold for $5,200 in cash. Required: Prepare the necessary journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Date General Journal Debit Credit 28-Dec-16 Inventory 247,500 Accounts payable 247,500 6-Jan-17 Accounts payable 247,500 Cash 247,500
On December 28, 2016, Videotech Corporation (VTC) purchased 10 units of a new satellite uplink system from Tristar Communications for $25,000 each. The terms of each sale were 1/10, n/30. VTC uses the net method to account for purchase discounts and a perpetual inventory system. VTC paid the net-of-discount amount on January 6, 2017. Prepare the necessary journal entries assuming that VTC uses the net method to account for purchase discounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Ending Inventory DVL Cost Date Inventory at Year-End Cost Year-End Cost Index Inventory Layers at Base Year Cost Inventory Layers at Base Year Cost Year-End Cost Index = Inventory Layers Converted to Cost 1/1/2016 $660,000 ÷ 1 = $660,000 Base $660,000 × 1 = $660,000 $660,000 12/31/2016 $690,000 ÷ 1.04 = $663,462 Base $660,000 × 1 = $660,000 2016 $3,462 × 1.04 = $3,600 $663,600 12/31/2017 $760,000 ÷ 1.08 = $703,704 Base $660,000 × 1 = $660,000 2016 $3,462 × 1.04 = $3,600 2017 $40,242 × 1.08 = $43,461 $707,061
On January 1, 2016, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $660,000. The 2016 and 2017 ending inventory valued at year-end costs were $690,000 and $760,000, respectively. The appropriate cost indexes are 1.04 for 2016 and 1.08 for 2017. Required: Complete the below table to calculate the inventory value at the end of 2016 and 2017 using the dollar-value LIFO method.
Date General Journal Debit Credit 15-Jul-16 Purchases 50,000 Accounts payable 50,000 23-Jul-16 Accounts payable 50,000 Purchase discounts 1,000 Cash 49,000 Date General Journal Debit Credit 15-Aug-16 Accounts payable 50,000 Cash 50,000
On July 15, 2016, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms of the sale were 2/10, n/30. Nixon uses a periodic inventory system and the gross method of accounting for purchase discounts. Required: Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The transaction is not correctly accounted for. The transaction is not correctly accounted for. The transaction is not correctly accounted for. The transaction is correctly accounted for. The transaction is correctly accounted for.
The following inventory transactions took place near December 31, 2016, the end of the Rasul Company's fiscal year-end: 1. On December 27, 2016, merchandise costing $2,000 was shipped to the Myers Company on consignment. The shipment arrived at Myers's location on December 29, but none of the merchandise was sold by the end of the year. The merchandise was not included in the 2016 ending inventory. 2. On January 5, 2017, merchandise costing $8,000 was received from a supplier and recorded as a purchase on that date and not included in the 2016 ending inventory. The invoice revealed that the shipment was made f.o.b. shipping point on December 28, 2016. 3. On December 29, 2016, the company shipped merchandise costing $12,000 to a customer f.o.b. destination. The goods, which arrived at the customer's location on January 4, 2017, were not included in Rasul's 2016 ending inventory. The sale was recorded in 2016. 4. Merchandise costing $4,000 was received on December 28, 2016, on consignment from the Aborn Company. A purchase was not recorded and the merchandise was not included in 2016 ending inventory. 5. Merchandise costing $6,000 was received and recorded as a purchase on January 8, 2017. The invoice revealed that the merchandise was shipped from the supplier on December 28, 2016, f.o.b. destination. The merchandise was not included in 2016 ending inventory. Required: Select whether Rasul correctly accounted for each of the above transactions.
