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
5-1 Merchandising Operations Ex. 234 On September 1, Hendricks Supply had an inventory of 18 backpacks at a cost of $20 each. The company uses a periodic inventory system. During September, the following transactions and events occurred. Sept.4Purchased 45 backpacks at $20 each from Neufeld, terms 2/10, n/30. 6Received credit of $100 for the return.
11 Views
View Answer
115Dole Industries had the following inventory transactions occur during 2012: UnitsCost/unit Feb. 1, 2012Purchase              54              $90 Mar. 14, 2012Purchase              93              $94 May 1, 2012Purchase              66              $98 The company sold 153 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used and operating expenses of $2,000, what.
16 Views
View Answer
Ex. 201 Dennis Lee, an auditor with Knapp CPAs, is performing a review of Dobson Company's inventory account. Dobson did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $640,000. However, the following information was.
22 Views
View Answer
              55.Goods held on consignment are a.never owned by the consignee. b.included in the consignee’s ending inventory. c.kept for sale on the premises of the consignor. d.included as part of no one’s ending inventory.               56.Many companies use just-in-time inventory methods. Which of the following is not an advantage of this method? a.It limits the.
8 Views
View Answer
Be. 197 The Entertainment Center accumulates the following cost and market data at December 31. Inventory   Cost Market Categories   Data__ Data_ Camera$11,000$10,200 Camcorders    8,000    8,500 DVDs  14,000  12,900 What is the lower-of-cost-or-market value of the inventory? Be. 198 At December 31, 2012, the following information (in thousands) was available for Kitselman Inc.: ending inventory $22,600; beginning inventory $21,400; cost.
13 Views
View Answer
5-1 Merchandising Operations COMPLETION STATEMENTS 237.A _________________ buys and sells inventory rather than performing services as their primary source of revenue. 238.Cost of goods sold is deducted from net sales revenue for the period in order to arrive at ________________. 239.Inventory on hand can be obtained from detailed inventory records when a ________________ inventory system.
11 Views
View Answer
5-1 Merchandising Operations Ex. 222 Presented here are selected transactions for the Leiss Company during April. Leiss uses the perpetual inventory system. April1Sold merchandise to Mann Company for $5,000, terms 2/10, n/30.  The merchandise sold had a cost of $2,500. 2.Purchased merchandise from Wild Corporation for $6,000, terms 1/10, n/30. 4Purchased merchandise from Ryan Company for.
6 Views
View Answer
              31.The LIFO inventory method tends to smooth out the peaks and valleys of a business cycle.               32.The computer has made the periodic inventory system more popular and easier to apply.               33.When the market value of inventory is lower than its cost, the inventory is written down to its market.
8 Views
View Answer
              21.If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.               22.If a company has no beginning inventory and the unit price of inventory is.
5 Views
View Answer
5-1 Merchandising Operations Ex. 230 The trial balance of Rachel Company at the end of its fiscal year, August 31, 2012, includes these accounts: Inventory $19,200; Purchases $144,000; Sales $190,000; Freight-in $8,000; Sales Returns and Allowances $3,000; Freight-out $1,000; and Purchases Returns and Allowances $5,000. The ending inventory is $25,000. Instructions Prepare a cost of.
10 Views
View Answer
Ex. 209 Hanlin Company uses the periodic inventory system to account for inventories. Information related to Hanlin Company's inventory at January 31 is given below: January1Beginning inventory400units @ $12.00 =$ 4,800 8Purchase800units @ $12.40 =9,920 16Purchase600units @ $12.80 =7,680 24Purchase   200units @ $13.20 =      2,640 Total units and cost2,000units$25,040 Instructions 1.Show computations to value the ending inventory.
26 Views
View Answer
              85.Inventory costing methods place primary reliance on assumptions about the flow of a.good. b.costs. c.resale prices. d.values.               86.Which of the following terms best describes the assumption made in applying the four inventory methods? a.Goods flow b.Cost flow c.Asset flow d.Physical flow               87.An assumption about cost flow is necessary a.because it is required by the income tax regulation. b.even.
20 Views
View Answer
5-1 Merchandising Operations SHORT-ANSWER ESSAY QUESTIONS S-A-E 248 You are at a company picnic and the company president starts a conversation with you. The president says “Since we use the perpetual inventory system, there is no reason to take a physical count of our inventory.” What is your response to the president’s remarks? S-A E.
25 Views
View Answer
Ex. 203 Hansen Company uses the periodic inventory method and had the following inventory information available: UnitsUnit CostTotal Cost 1/1Beginning Inventory100$3$   300 1/20Purchase500$42,000 7/25Purchase100$5500 10/20Purchase   300$6  1,800 1,000$4,600 A physical count of inventory on December 31 revealed that there were 350 units on hand. Instructions Answer the following independent questions and show computations supporting your answers. 1.Assume that the company.
9 Views
View Answer
5-1 Merchandising Operations Ex. 235 Presented here are selected transactions for the Foyle Company during April. Foyle uses the periodic inventory system. April 1Sold merchandise to Land Company for $3,000, terms 2/10, n/30. The merchandise sold had a cost of $2,000. 2                  Purchased merchandise from Webb Corporation for $5,000, terms 1/10, n/30. 4Purchased merchandise from.
11 Views
View Answer
125.In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the a.FIFO method. b.LIFO method. c.average cost method. d.tax method.               126.In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet.
9 Views
View Answer
5-1 Merchandising Operations IFRS QUESTIONS 1.The Income statement is a.required under GAAP but not under IFRS. b.required under IFRS in the same format as under GAAP. c.required under IFRS but not under GAAP. d.required under IFRS with some differences as compared to GAAP. 2.The basic accounting entries for merchandising are a.the same under GAAP and under IFRS. b.required under GAAP.
85 Views
View Answer
              65.The LIFO inventory method assumes that the cost of the latest units purchased are a.the last to be allocated to cost of goods sold. b.the first to be allocated to ending inventory. c.the first to be allocated to cost of goods sold. d.not allocated to cost of goods sold or ending inventory.               66.Alpha.
6 Views
View Answer
5-1 Merchandising Operations S-A E 256 The following are the gross profit percentages for Naylor Company: YearGross Profit Percentage 200933% 201034% 201136% 201213% List four possible explanations for the low gross profit percentage in 2012. S-A E 257(Ethics) Hiller Corporation manufactures electronic components for use in many consumer products. Their raw materials are purchased literally from all over the world. Depending.
8 Views
View Answer
              11.In accounting for inventory, the assumed flow of costs must match the physical flow of goods.               12.Inventory methods such as FIFO and LIFO deal more with flow of costs than with flow of goods.               13.The average cost inventory method relies on a simple average calculation.               14.If prices never changed.
12 Views
View Answer
5-1 Merchandising Operations Ex. 229 Presented below is information for Zales Company for the month of January 2012. Cost of goods sold$260,000Rent expense$35,000 Freight-out7,000Sales discounts8,000 Insurance expense12,000Sales returns and allowances13,000 Salaries and wages expense58,000Sales revenue421,000 Instructions (a)Prepare a multiple-step income statement. (b)Calculate the profit margin ratio and the gross profit rate.   .
12 Views
View Answer
5-1 Merchandising Operations Ex. 224 The following transactions are for Kale Company. (1)On December 3 Kale Company sold $400,000 of merchandise to Thomson Co., terms 1/10, n/10. The cost of the merchandise sold was $320,000. (2)On December 8 Thomson Co. was granted an allowance of $20,000 for merchandise purchased on December 3. (3)On December 13.
13 Views
View Answer
155.Use the following information regarding Black Company and Red Company to answer the question “Which of the following is Black Company's "cost of goods sold" for 2011 (to the closest dollar)?” Year Inventory Turnover Ratio Ending Inventory Black Company 2010 $26,340 2011 10.7 $29,890 2012 10.2 $30,100 Red Company 2010 $25,860 2011 8.8 $24,750 2012 9.5 $22,530 a.$319,823 b.$281,838 c.$300,830 d.$320,946               156.Use the following information regarding Black Company and Red Company to answer the question.
10 Views
View Answer
5-1 Merchandising Operations Ex. 227 The following information is available for Quayle Company: Sales Revenue$628,000 Sales Returns and Allowances20,000 Cost of Goods Sold398,000 Selling Expense69,000 Administrative Expense35,000 Interest Expense19,000 Interest Revenue20,000 Instructions 1.Use the above information to prepare a multiple-step income statement for the year ended December 31, 2012. 2.Compute the profit margin ratio.   .
14 Views
View Answer
5-1 Merchandising Operations Ex. 232 The following information is available from the annual reports of Flynn Company and Tolan Inc. (Amounts in millions)    Flynn     Tolan  Sales$35,622$42,457 Cost of goods sold20,73924,431 Operating expenses10,42811,188 Income before taxes4,4556,838 Net income2,5944,072 Instructions 1.Calculate the profit margin ratio and gross profit rate for each company. 2.What conclusion concerning the relative profitability of the two companies can be.
10 Views
View Answer
Ex. 207 Wooderson Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Wooderson Company uses the periodic inventory system.           Purchases           Sales         UnitsUnit CostUnitsSelling Price/Unit 3/1Beginning inventory100$40 3/3Purchase60$50 3/4Sales60$80 3/10Purchase200$55 3/16Sales70$90 3/19Sales80$90 3/25Sales60$90 3/30Purchase40$60 Instructions (a)Using the FIFO assumption, calculate the amount charged to cost.
9 Views
View Answer
TRUE-FALSE STATEMENTS               1.Raw materials inventories are the goods that a manufacturing company has completed and are ready to be sold to customers.               2.A manufacturer’s inventory consists of raw materials, work in process, and finished goods.               3.When the terms of sale are FOB shipping point, legal title to the goods remains.
13 Views
View Answer
              75.Olympus Climbers Company has the following inventory data: July 1Beginning inventory20 units at $19              $   380 7Purchases70 units at $20              1,400 22Purchases10 units at $22                   220               $2,000 A physical count of merchandise inventory on July 30 reveals that there are 40 units on hand. Using the FIFO inventory method, the amount allocated.
18 Views
View Answer
*185.Snug-As-A-Bug Blankets has the following inventory data: July 1Beginning inventory                            15 units at $90 5Purchases                            90 units at $84 14Sale                            60 units 21Purchases                            45 units at $87 30Sale                            42 units Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis for July? a.$4,122 b.$4,131 c.$4,158. d.$8,694               *186.Snug-As-A-Bug.
9 Views
View Answer
MULTIPLE CHOICE QUESTIONS               45.Manufactured inventory that has begun the production process but is not yet completed is a.work in process. b.raw materials. c.merchandise inventory. d.finished goods.               46.The factor which determines whether or not goods should be included in a physical count of inventory is a.physical possession. b.legal title. c.management's judgment. d.whether or not the purchase price has been.
8 Views
View Answer
165.The following information was available for Bowyer Company at December 31, 2012: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $660,000; and sales $900,000. Bowyer’s days in inventory in 2012 was a.38.8 days. b.44.0 days. c.50.0 days. d.60.8 days.               166.A low number of days in inventory may indicate all of the following.
21 Views
View Answer
BRIEF EXERCISES Be. 192 Shellan Kamp Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking. 1.Goods shipped on consignment by Shellan Kamp to another company. 2.Goods in transit from a supplier shipped FOB destination. 3.Goods shipped via common carrier.
17 Views
View Answer
145.The lower of cost or market basis of valuing inventories is an example of a.comparability. b.the cost principle. c.conservatism. d.consistency.               146.When applying the lower of cost or market rule to inventory valuation, market generally means a.current replacement cost. b.original cost. c.resale value. d.original cost, less physical deterioration.               147.The situation that requires a departure from the cost basis of.
9 Views
View Answer
Ex. 213 Burnham Company reported the following summarized annual data at the end of 2012: Sales revenue$1,600,000 Cost of goods sold*     900,000 Gross margin700,000 Operating expenses    300,000 Income before income taxes$   400,000 *Based on an ending FIFO inventory of $250,000. The income tax rate is 30%. The controller of the company is considering a switch from FIFO to.
8 Views
View Answer
5-1 Merchandising Operations MATCHING 247.Match the items below by entering the appropriate code letter in the space provided. A.Net salesF.Contra revenue B.Sales discountG.Freight-out C.Credit termsH.Gross profit D.Periodic inventory systemI.Sales invoice E.Gross profit rateJ.Purchase discount ____              1.A reduction given by the seller for prompt payment of a credit sale. ____              2.Provides support for a credit sale. ____              3.Gross profit divided by net.
13 Views
View Answer
Ex. 211 Wolf Camera Shop Inc. uses the lower-of-cost-or-market basis for its inventory. The following data are available at December 31.   Market Units Cost/Unit Value/Unit Cameras     Minolta   5 $175 $165     Canon   7   148   152 Light Meters     Vivitar 15   125   119     Kodak 10   115   135 Instructions What amount should be reported on Wolf Camera Shop's financial statements, assuming the lower-of-cost-or-market rule is applied? Ex..
12 Views
View Answer
Ex. 210 Johnson Company reports the following for the month of June.   Date  Explanation Units Unit Cost Total Cost June  1 Inventory 225    $5 $1,125 12 Purchase 525     6 3,150 23 Purchase 750     7 5,250 30 Inventory 300 (a)Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average cost. (b)Which costing method gives the highest ending inventory? The highest.
8 Views
View Answer
Ex. 205 Compute the cost to be assigned to ending inventory for each of the methods indicated given the following information about purchases and sales during the year. January1Beginning Inventory150 items @ $4 = $   600 May1Purchases450 items @ $6 = $2,700 Total Available600 items      $3,300 Total Sales400 items December 31Ending Inventory200 Cost assigned on an average.
10 Views
View Answer
Ex. 202 Grother Company uses the periodic inventory method and had the following inventory information available: UnitsUnit CostTotal Cost 1/1Beginning Inventory100$4$   400 1/20Purchase500$52,500 7/25Purchase100$7700 10/20Purchase   300$8  2,400 1,000$6,000 A physical count of inventory on December 31 revealed that there were 325 units on hand. Ex. 202(Cont.) Instructions Answer the following independent questions and show computations supporting your answers. 1.Assume that the.
11 Views
View Answer
105.Laser Listening has the following inventory data: Nov. 1 Inventory30 units @ $8.00 each 8Purchase120 units @ $8.60 each 17Purchase60 units @ $8.40 each 25Purchase90 units @ $8.80 each A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assuming that the specific identification method is used and.
7 Views
View Answer
5-1 Merchandising Operations Ex. 223 Norman Company completed the following transactions in October: Norman uses a perpetual inventory system.        Credit Sales          Sales Returns  Date of   Date   Amount  Terms     Date  AmountCollection Oct.3$  8002/10, n/30Oct.8 Oct.111,2003/10, n/30Oct. 14$  300Oct.16 Oct.175,0001/10, n/30Oct. 201,200Oct.29 Oct.211,7002/10, n/60Oct. 23400Oct.27 Oct.234,0002/10, n/30Oct. 27500Oct.28 Instructions (a)Indicate the cash received for each collection. Show your calculations. (b)Prepare the journal.
9 Views
View Answer
5-1 Merchandising Operations Ex. 233 June4Deere Company purchased $3,750 worth of merchandise, terms n/30 from Gilbert Company. The cost of the merchandise was $2,500. 12            Deere returned $600 worth of goods to Gilbert for full credit. The goods had a cost of $400 to Johnson. 12            Deere paid the account in full. Instructions Prepare the journal entries.
7 Views
View Answer
135.The managers of Hong Company receive performance bonuses based on the net income of the firm. Which inventory costing method are they likely to favor in periods of declining prices? a.LIFO b.Average Cost c.FIFO d.Physical inventory method               136.In periods of inflation, phantom or paper profits may be reported as a result of using the a.perpetual.
9 Views
View Answer
Ex. 204 Faster Company uses the periodic inventory method and had the following inventory information available: UnitsUnit CostTotal Cost 1/1Beginning Inventory15$8.00$   120 1/20Purchase 60$8.80528 7/25Purchase 30$8.40252 10/20Purchase  45$9.60  432   150$1,332 A physical count of inventory on December 31 revealed that there were 50 units on hand. Instructions Answer the following independent questions and show computations supporting your.
10 Views
View Answer
EXERCISES Ex. 199 The Cain Company has just completed a physical inventory count at year end, December 31, 2012. Only the items on the shelves, in storage, and in the receiving area were counted and costed on the FIFO basis. The inventory amounted to $75,000. During the audit, the independent CPA discovered.
11 Views
View Answer
Ex. 208 Torrey Company uses the periodic inventory system to account for inventories. Information related to Torrey Company's inventory at October 31 is given below: October1Beginning inventory400units @ $10.00 =$ 4,000 8Purchase800units @ $10.40 =8,320 16Purchase600units @ $10.80 =6,480 24Purchase   200units @ $11.60 =      2,320 Total units and cost2,000units$21,120 Instructions 1.Show computations to value the ending inventory.
16 Views
View Answer
5-1 Merchandising Operations Ex. 228 The adjusted trial balance of McCoy Company included the following selected accounts:   Debit    Credit Sales Revenue$625,000 Sales Returns and Allowances$  50,000 Sales Discounts 9,500 Cost of Goods Sold396,000 Freight-out2,000 Advertising Expense15,000 Interest Expense19,000 Store Salaries Expense74,000 Utilities Expense23,000 Depreciation Expense3,500 Interest Revenue25,000 Instructions 1.Use the above information to prepare a multiple-step income statement for the year ended December 31, 2012. 2.Calculate the.
15 Views
View Answer
              95.The selection of an appropriate inventory cost flow assumption for an individual company is made by a.the external auditors. b.the SEC. c.the internal auditors. d.management.               96.Which of the following is not a common cost flow assumption used in costing inventory? a.First-in, first-out b.Middle-in, first-out c.Last-in, first-out d.Average cost               97.The accounting principle that requires that the cost flow.
20 Views
View Answer

Can't find what you're looking for ?

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