Info
Warning
Danger

Accounting Expert Answers, Study Resources & Learning Aids

The vast field of accounting contributes to one of the largest subjects in our study resources. Accounting flashcards, homework answers for textbooks & other learning aids can increase your competency in this domain instantly. Become a top student with our support. Search Now…

Ask an Expert

Our Experts can answer your tough homework and study questions.

Answers in as fast as 15 minutes
Post a Question
Ex. 7-106Reconciliation of cash account               Bestway Corp.’s book balance of the cash account shows an unadjusted balance of $72,000 before reconciliation. The following data was also available: 1.The bank statement does not include a deposit of $3,100 made on the last day of the month. 2.The bank statement shows a collection of.
16 Views
View Answer
Ex. 8-154Adjustments to lower of cost and NRV The controller of Utah Corp. has provided you with the following information relating to its inventory: DateCostLower of cost and NRV Dec 31/17$457,000$410,000 Dec 31/18$615,000$555,000 Utah uses the periodic inventory system, and records its inventory at cost. An allowance account is adjusted at the end of each.
20 Views
View Answer
31.Which of the following is correct regarding vendor rebates? a) Vendor rebates are generally recorded as a reduction from sales. b) The rebate is never recognized until it is actually received. c) If the rebate meets asset recognition criteria, the receivable is allocated to goods sold. d) Vendor rebates are generally recorded as a.
21 Views
View Answer
Ex. 8-168Retail method of accounting for inventory Laver Inc. had beginning inventory of $25,100 at cost and $35,800 at retail. Net purchases were $132,500 at cost and $167,900 at retail. Net markups were $14,000, net markdowns were $5,300, and sales were $188,000. Instructions Calculate the ending inventory at cost using the conventional retail.
17 Views
View Answer
Ex. 7-104ASPE/IFRS differences While most requirements set out under ASPE are not likely to change in the short term, what is one area open to change?Explain. Ex. 105ASPE/IFRS Differences With respect to receivables recognition and measurement, recognition of interest income and amortization of any discounts or premiums, requirements set out under ASPE differ.
15 Views
View Answer
Exercises Ex. 8-135Inventory management Explain why inventory management is referred to as a double-edged sword.What competing interests is management trying to balance in their management of inventories? Ex. 8-136Definitions Provide clear, concise answers for the following: 1.Identify the inventory categories of a manufacturing company and describe how they are related. 2.What is a perpetual inventory system? 3.What.
15 Views
View Answer
PROBLEMS Pr. 7-109Entries for bad debt expense Nairobi Corp.’s unadjusted trial balance includes the following balances: Dr.Cr. Accounts receivable...........................$150,000 Allowance for doubtful accounts.................$    3,500 Sales (all on credit)...........................720,000 Sales returns and allowances...................30,000 Instructions a)Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be (1) 5% of gross accounts receivable and (2) 2% of net.
21 Views
View Answer
51.An inventory cost formula in which the oldest costs incurred rarely have an effect on the ending inventory valuation is a) FIFO. b) moving-average cost. c) LIFO. d) weightedaverage. 52.All else being equal, which of the following statements is correct for a company that uses the FIFO costing formula with a perpetual inventory system (compared.
13 Views
View Answer
Ex. 7-92Allowance for doubtful accounts When a company has a policy of making sales for which credit is extended, it is reasonable to expect a portion of those sales to be uncollectible.As a result of this, a company must recognize bad debt expense.There are basically two methods of recognizing bad debt.
20 Views
View Answer
Ex8-146Inventory cost flow assumptions The following inventory transactions took place for NPR Corporation for the month of May: Date Event Quantity Cost/Selling Price May 1 Beginning Inventory 1,000 $3.55 May 5 Purchase 6,000 3.10 May 10 Purchase 2,000 3.75 May 15 Sale 3,000 6.00 May 20 Sale 2,000 6.00 May 22 Purchase 5,000 3.45 May 24 Purchase 2,000 3.75 May 25 Sale 7,000 6.00 Instructions Calculate the ending inventory balance for NPR Corporation, assuming the company uses a periodic inventory system and the weighted average cost formula. Ex. 8-147Year-end entries.
42 Views
View Answer
Ex. 8-137Inventory journal entries Consider the following information for Flora Inc.: April11Purchased goods billed at $25,000, terms 3/15, n/60 20Purchased goods billed at $18,000, terms 1/15, n/30 21 Paid invoice from April 11 29Purchased goods billed at $14,100, terms 3/10, n/60 Instructions Prepare general journal entries for the transactions above, assuming that purchases are to be recorded.
12 Views
View Answer
121. Washington Distribution Co. has determined its December 31, 2017 inventory on a FIFO basis at $240,000. Information pertaining to that inventory follows: Estimated selling price$255,000 Estimated cost of disposal10,000 Normal profit margin30,000 Washington records losses that result from applying the lower of cost and net realizable value rule. At December 31, 2017, the.
15 Views
View Answer
Ex. 7-94Amortization of discount on note On December 31, 2014, Green Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000, a due date of December 31, 2017, and a stated rate of 5%, with interest receivable at the end of each year. The.
19 Views
View Answer
Ex. 8-142Impact of accounting errors on financial statement items and ratios Cayman Corporation makes the following errors during the current year.Each error is an independent case. Ending inventory is overstated by $1,120, but purchases are recorded correctly. Both ending inventory and a purchase on account are understated in the same amount. (Assume this.
15 Views
View Answer
41.To record a “basket purchase” or to allocate a joint product cost, which method is the most rational? a) average cost b) relative sales value c) fair value d) amortized cost 42. If two factories produce the exact same product having the same costs, and factory costs are completely allocated to the individual products, the.
26 Views
View Answer
Ex. 8-166Interpretation of inventory ratios Explain the meaning of each ratio you calculated in the previous question. What do these ratios say about the company’s performance? What additional information would you require to improve your assessment? *Ex. 8-167Retail method of accounting for inventory Presented below is information related to Westtown Company: CostRetail Beginning inventory$225,000$310,500 Purchases1,514,0002,090,000 Markups107,700 Markup cancellations17,700 Markdowns35,400 Markdown.
37 Views
View Answer
Ex. 8-160Gross profit method Ohana Company uses the gross profit method to estimate inventory for monthly reports.Information follows for the month of November: Inventory, Nov 1$978,000 Purchases691,000 Freight-in47,000 Sales1,450,000 Sales returns67,600 Purchase discounts14,100 Instructions a)Calculate the estimated inventory at November 30, assuming that the gross profit is 30% of sales. b)Calculate the estimated inventory at November 30, assuming that the.
17 Views
View Answer
Ex. 8-156Lower of cost and net realizable value (NRV) The December 31, 2017 inventory of Rhode Inc. consisted of four products, for which certain information is provided below: ReplacementEstimatedExpected ProductOriginal CostCostDisposal CostSelling Price A$29.00$22.00$6.50$40.00 B$44.00$40.00$8.00$48.00 C$145.00$125.00$25.00$190.00 D$21.00$15.80$3.00$28.00 Instructions Using the lower of cost and NRV approach applied on an individual-item basis, calculate the inventory valuation that should be reported.
20 Views
View Answer
11.Goods in transit which are shipped FOB shipping point should be included a) in the inventory of the buyer. b) in the inventory of the seller. c) in the inventory of the shipping company. d) in no one’s inventory until they arrive at their destination. 12.Goods in transit which are shipped FOB destination should be.
16 Views
View Answer
Pr. 7-110 Amortization of discount under the straight-line and effective interest methods On January 1, 2017, Ethiopia Corporation receives a four-year, $50,000 zero-interest-bearing note in payment of goods sold. The present value of the note equals the agreed upon sales price of $32,936.55.Ethiopia is a privately held company and follows ASPE. Instructions a)Assuming.
32 Views
View Answer
Ex. 7-88Nontrade receivables Nontrade receivables are created by a variety of transactions and can be written promises either to pay cash or to deliver other assets.Provide three examples of nontrade receivables. Ex. 7-89Recording of trade discounts On March 2, Janssen Ltd. sold $30,000 of inventory items on credit with the terms 1/10, net.
42 Views
View Answer
Ex. 7-100Sale of receivables without recourse Sparwood Manufacturing factored $240,000 of their accounts receivable to General Factor Corp., on a without recourse basis. The receivables are transferred to General Factor, who takes over the full responsibility of collection.General Factor charged a finance charge of 4% of the dollar value of the.
35 Views
View Answer
Pr. 7-113 Factoring accounts receivable On April 1, Morocco Ltd. factored $500,000 of accounts receivable with Kenya Finance Corp. on a without recourse basis. Under the arrangement, Morocco was to handle disputes concerning service, and Kenya Finance was to make the collections, handle the sales discounts, and absorb the credit losses..
18 Views
View Answer
81.The inventory turnover ratio is calculated by dividing the cost of goods sold by a) beginning inventory. b) ending inventory. c) average inventory. d) number of days in the year. 82.The average days to sell inventory ratio is calculated as a) average inventory divided by inventory turnover. b) inventory turnover divided by cost of goods sold. c) inventory.
30 Views
View Answer
Exercise 8-158 Accounting for biological and agricultural assets Using the information from question 8-157, prepare the journal entry for the honey harvested by Woods during April 2017. Assume Woods sells the honey harvested at the local market and receives $3,100. Prepare the summary entry to record the sale of the honey for.
41 Views
View Answer
Ex. 7-96Note with fair value not equal to cash consideration On January 1, 2017, Cameroon Corp. lent $50,000 to its CEO, interest-free. However, the loan is repayable in full in five years. The market rate for similar loans (with similar credit risk) is 4%. Instructions a)Calculate the present value (fair value) of this.
25 Views
View Answer
21.If the unavoidable costs of completing a purchase commitment are higher than the expected benefits from receiving the contracted goods or services, IFRS requires a loss provision to be recognized. This is known as a(n) a) executory contract. b) purchase commitment. c) onerous contract. d) impaired contract. 22.If a material amount of inventory has been.
19 Views
View Answer
Ex. 7-86Restricted cash balances Some lending institutions require customers who borrow money from them to keep minimum cash balances in their chequing or savings accounts.What are these balances called?Explain why they might need to be separately reported on the company’s statement of financial position. Ex. 7-87Classification of accounts receivable Trade receivables are amounts.
20 Views
View Answer
101.Assume that no correcting entries were made at December 31, 2017. Ignoring income taxes, by how much will retained earnings at December 31, 2018 be overstated or understated? a) $4,000 understated b) $6,000 overstated c) $6,000 understated d) $15,000 understated Feedback: $12,000 – ($2,000 + $6,000) = $4,000 102.Assume that no correcting entries were made at.
89 Views
View Answer
61.The use of a “replacement cost” definition of “market” is based on the assumption that a) a decline in an item’s replacement cost results in a decline in its selling price. b) prices will fall in the same proportion as input costs fall. c) replacement cost is appropriate for all situations. d) using “net.
12 Views
View Answer
Pr. 8-172 Inventory errors An audit of the inventory records of Missouri Inc. identified a number of errors. These errors are summarized in Exhibit A below: EXHIBIT A Year Net IncomeReported Description of Error 2013 $120,000 Overstatement of ending inventory $11,000 2014 $95,000 Understatement of ending inventory $1,500 2015 $99,000 Understatement of ending inventory $18,000 2016 $105,000 Overstatement of ending inventory $20,000 2017 $120,000 Overstatement of ending inventory $5,200 Instructions a)As financial accountant for Missouri, you have.
15 Views
View Answer
Ex. 7-98Notes received for Property, Goods, or Services Savannah Corp. sold property in exchange for a six-year note that has a maturity value of $40,250and no stated interest rate.The property originally cost Savannah $21,000.Assuming that a market interest rate of 9% is known, prepare the journal enjoy to record the sale.
29 Views
View Answer
Ex. 90Sales Returns and Allowances Assume that Olympia Corporation estimates that approximately 5% of its $1.5 million of trade receivables outstanding will be returned or some adjustment will be made to the sales price. Instructions a)        Prepare the entry to show expected sales returns and allowances. b)        Explain why it is important to prepare.
21 Views
View Answer
Ex. 8-141 Terminology In the space provided at right, write the word or phrase that is defined or indicated. 1.An approach whereby a company __________ finances its inventory without reporting either the liability or the inventory asset on its statement of financial position. 2.The method of initially recording purchases at the full invoice amount.__________ 3.The method of.
15 Views
View Answer
Ex. 8-139Accounting definition Define inventory from an accounting perspective Ex. 8-140Items to be included in ending inventory During the year, the following transactions took places for Blades Corporation.For each transaction, indicate whether the inventory should be included in Blades’ inventory for the end of the year. a)On December 31, the last day of the.
12 Views
View Answer
Ex. 8-164Inventory presentation and disclosure under IFRS Briefly describe the additional disclosures required for inventories under IFRS (as compared to ASPE). Ex. 8-165Inventory analysis & ratios Avery Ltd. began the fiscal year with inventory of $2,142,560. The company’s ending inventory was $2,241.650, and cost of goods sold for the year was $14,320,400. Net.
14 Views
View Answer
Ex. 8-148FIFO cost formula The Malibu Shop shows the following data related to item Y27: Inventory, February 1100 units @ $7.00 Purchase, February 9200 units @ $7.60 Purchase, February 19150 units @ $7.90 Inventory, February 28200 units Instructions Using the FIFO cost formula, what value should be assigned to the ending inventory of item Y27? Ex. 8-149Perpetual FIFO A.
38 Views
View Answer
Ex. 8-152FIFO and LIFO inventory methods During June, the following changes in inventory item 27 took place: June1Balance1,400 units @ $24 14Purchased800 units @ $36 24Purchased700 units @ $30 8Sold400 units @ $50 10Sold1,000 units @ $40 29Sold500 units @ $44 Perpetual inventories are maintained. Instructions What is the cost of the ending inventory for item 27 under the following.
34 Views
View Answer
Pr. 7-115Secured borrowings vs. factoring of receivables Explain the difference between secured borrowings and factoring. *Pr. 7-116Bank reconciliation Benin Company deposits all receipts daily and makes all payments by cheque. The following information is available from the cash records: March 31 Bank Reconciliation Balance per bank.............................$35,160 Add:Deposits in transit.........................4,200 Deduct:Outstanding cheques................... (3,200) Balance per books............................$36,160 Month of April Results Per.
18 Views
View Answer
Ex. 8-150Periodic FIFO Maine Corporation sells item A as part of its product line, using the periodic system. Information as to balances on hand, purchases, and sales of item A are given in the following table for the first six months of 2017: Quantities Unit Price DatePurchasedSoldBalanceof Purchase January 11——300$5.00 January 241,300—1,6005.20 February 8—3001,300— March 16—560740— June 11600—1,3405.60 Instructions Calculate the.
15 Views
View Answer
91. Nottingham Inc.’s net sales and gross profit were $1,341,000 and $471,000 respectively. Assuming the cost of goods available were $1,084,000, what was the cost value of the ending inventory? a) $870,000 b) $471,000 c) $247,000 d) $214,000 Feedback: $1,084,000 – ($1,341,000 – $471,000) = $214,000 92. For last month, PermaCorp.'s cost of goods sold and.
26 Views
View Answer
Pr. 7-111Note with fair value not equal to cash consideration On January 1, 2017, Tanzania Corp. lent $50,000 to its CEO, interest-free. However, the loan is repayable in five instalments, eachDecember 31, until paid.The market rate for similar loans (with similar credit risk) is 4%. Instructions a) Calculate the present value (fair value).
45 Views
View Answer
Ex. 8-145Recording purchases at net amounts Mexico Inc. records purchases at net amounts and uses the periodic inventory system. Prepare entries for the following: May11Purchased merchandise on account, $16,000, terms 2/10, n/30. 15Returned part of May 11 purchase, $2,000, and received credit on account. 30Prepared the adjusting entry required for financial statements. .
18 Views
View Answer
PROBLEMS Pr. 8-170Theory What is the difference between an executory contract and andonerous contract? Pr. 8-171Inventorycut-off At December 31, 2017, Dakota Corp.’s perpetual inventory showed as $43,100 in the general ledger. Towards the end of 2017, a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements.
16 Views
View Answer
111. Assuming Tehran uses the perpetual inventory system, the entry to account for the March 1 purchase is a) debit Inventory and credit Accounts Payable, $875. b) debit Purchases and credit Accounts Payable, $875. c) debit Accounts Payable and credit Purchases, $875. d) debit Accounts Payable and credit Inventory, $875. Feedback: Under the perpetual system,.
15 Views
View Answer
71.The gross profit method of inventory valuation is NOTsuitable when a) a portion of the inventory is destroyed. b) there is a substantial increase in inventory during the year. c) there is no beginning inventory because it is the first year of operation. d) the gross profit percentage applicable to the goods in ending.
14 Views
View Answer
MULTIPLE CHOICE—Conceptual 1.A manufacturing company typically maintains the following inventory account(s): a) Merchandise Inventory. b) Raw Materials and Work in Process only. c) Raw Materials, Work in Process and Finished Goods. d) Work in Process and Merchandise Inventory. 2.A hardware retailer typically maintains the following inventory account(s): a) Merchandise Inventory. b) Raw Materials and Work in Process only. c).
81 Views
View Answer
Pr. 8-173Analysis of errors Indicate in each of the spaces provided the effect of the described errors on the various elements of a company's financial statements. Use the following codes: O = amount is overstated; U = amount is understated; NE = no effect. Assume a periodic inventory system and that all sales and purchases.
14 Views
View Answer

Can't find what you're looking for ?

Ask our exprts a study questions, on us.
Get free Homework Help*