12. Ebasan was organized on January 1, 2020. On December 31, 2021, the corporation lost a warehouse fire just before the year end count of Inventory was to take place. Data from the records disclosed the following: Goods available for sale 2019 P4,069,400 3,940,000 2020 P4,157,000 4,180,000 100,000 Sales Sales returns and allowances 80,000 21% Gross Profit Rate On January 1, 2021 Ebasan's pricing policy was changed so that the gross profit rate would be three percentage points higher than the one earned in 2020. Salvaged undamaged merchandise was marked to sell at 120,000 while damaged merchandise was marked to sell at 80,000 had an estimated realizable value of 18,000. How much is the inventory loss due to firef A. 918,200 B. 947,000 C. 856,200 D. 824,600

12. Ebasan was organized on January 1, 2020. On December 31, 2021, the corporation lost a warehouse fire just before the year end count of Inventory was to take place. Data from the records disclosed the following: Goods available for sale 2019 P4,069,400 3,940,000 2020 P4,157,000 4,180,000 100,000 Sales Sales returns and allowances 80,000 21% Gross Profit Rate On January 1, 2021 Ebasan's pricing policy was changed so that the gross profit rate would be three percentage points higher than the one earned in 2020. Salvaged undamaged merchandise was marked to sell at 120,000 while damaged merchandise was marked to sell at 80,000 had an estimated realizable value of 18,000. How much is the inventory loss due to firef A. 918,200 B. 947,000 C. 856,200 D. 824,600

Name: 12. Ebasan was organized on January 1, 2020. On December 31, 2021, th
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Description: 12. Ebasan was organized on January 1, 2020. On December 31, 2021, the corporation lost most of its inventory ina warehouse fire just before the year end count of Inventory was to take place. Data from the recordsdisclosed the following:2019P4,069,4

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 17E: Company is considering purchasing EKC Company. EKCs balance sheet at December 31, 2019, is as...

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Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
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The following items were included in Venicio Corporations inventory account on December 31, 2019: What amount should Venicio report as inventory at December 31, 2019? a. 21,000 b. 20,400 c. 26,000 d. 35,000
Kraft Manufacturing Company manufactures two products: Mult and Tran. At December 31, 2019, Kraft used the FIFO inventory method. Effective January 1, 2020, Kraft changed to the LIFO inventory method. The cumulative effect of this change is not determinable, and, as a result, the ending inventory of 2019, for which the FIFO method was used, is also the beginning inventory for 2020 for the LIFO method. Any layers added during 2020 should be costed by reference to the first acquisitions of 2020, and any layers liquidated during 2020 should be considered a permanent liquidation. The following information was available from Krafts inventory records for the two most recent years: Required: Compute the effect on income before income taxes for the year ended December 31, 2020, resulting from the change from the FIFO to the LIFO inventory method.
Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2020, Koopman decided to switch to the average cost inventory method for financial reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the FIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Koopman is subject to a 21% income tax rate in all years; it pays the income taxes payable of a current year in the first quarter of the next year. Koopman had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Koopman had cash of 10,000, inventory of 24,000, other assets of 70,800, accounts payable of 4,500, and income taxes payable of 6,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in methods at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
In 2020, Frost Company, which began operations in 2018, decided to change from LIFO to FIFO because management believed that FIFO belter represented the flow of their inventory. Management prepared the following analysis showing the effect of this change: Frost reported net income of 2,500,000, 2,400,000, and 2,100,000 in 2018, 2019, and 2020, respectively. The tax rate is 21%. Required: 1. Prepare the journal entry necessary to record the change. 2. What amount of net income would Frost report in 2018, 2019, and 2020? 3. If Frosts employees received a bonus of 10% of income before deducting the bonus and income taxes in 2018 and 2019, what would be the effect on net income for 2018, 2019, and 2020?
Company is considering purchasing EKC Company. EKCs balance sheet at December 31, 2019, is as follows: At December 31, 2019, Elm discovered the following about EKC: a. No allowance for uncollectible accounts has been established. An allowance of 5,000 is considered appropriate. b. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Elm. The FIFO inventors-valuation of the December 31, 2019, ending inventors-would be 180,000. c. The fair value of the property, plant, and equipment (net) is 730,000. d. The company has an unrecorded patent that is worth 120,000. e. The book values of the current liabilities and bonds payable are the same as their market values. Required: 1. Compute the value of the goodwill if Elm pays 1,350,000 for EKC. 2. Next Level Why would the book value of a companys identifiable net assets differ from its market value?
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On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its inventory. The following information is presented for 2020: January 1 December 31Inventory P 750,000Accounts Receivable 510,000 P 490,000Accounts Payable 350,000 590,000Collection on accounts receivable 3,100,000Payment to suppliers 1,950,000Goods out on consignment at sales price 310,000Salvage value of inventory 45,0002019 2018 2017Sales P3,000,000 P2,750,000 P2,100,000Gross Profit 1,200,000 1,045,000 756,000Requirements: Compute the following on December 31, 20201. Purchases2. Sales3. Inventory Loss