Problem 12-5 Adapted) Altis a trial at which Problem 12-5 (AICPA Adapted) included the following accounts: Sales (100,000 units at P150) Sales discount 9,400,000 400,000 Purchases Purchase discount The inventory purchases during the year were as follows: 1,200,000 1,950,000 2,800,000 3,750,000 09 65 Beginning inventory, January 1 Purchases, quarter ended March 31 30,000 Purchases, quarter ended June 30 40,000 Purchases, quarter ended Sept. 30 Purchases, quarter ended Dec. 31 70 50,000 75 10,000 06 150,000 10,600,000 The accounting policy is to report inventory at the lower of cost and net realizable value applied to total inventory. Cost is determined under the first-in, first-out method. At the beginning of current year, the entity reported an allowance for inventory writedown of P400,000. At year-end, the entity determined that the replacement cost of inventory was P70 per unit and the net realizable value was P72 per unit. The normal profit margin is P10 per unit. Required: 1. Prepare a schedule of cost of goods sold for the current year. 2. Prepare journal entries to record the ending inventory and any inventory writedown.

Problem 12-5 Adapted) Altis a trial at which Problem 12-5 (AICPA Adapted) included the following accounts: Sales (100,000 units at P150) Sales discount 9,400,000 400,000 Purchases Purchase discount The inventory purchases during the year were as follows: 1,200,000 1,950,000 2,800,000 3,750,000 09 65 Beginning inventory, January 1 Purchases, quarter ended March 31 30,000 Purchases, quarter ended June 30 40,000 Purchases, quarter ended Sept. 30 Purchases, quarter ended Dec. 31 70 50,000 75 10,000 06 150,000 10,600,000 The accounting policy is to report inventory at the lower of cost and net realizable value applied to total inventory. Cost is determined under the first-in, first-out method. At the beginning of current year, the entity reported an allowance for inventory writedown of P400,000. At year-end, the entity determined that the replacement cost of inventory was P70 per unit and the net realizable value was P72 per unit. The normal profit margin is P10 per unit. Required: 1. Prepare a schedule of cost of goods sold for the current year. 2. Prepare journal entries to record the ending inventory and any inventory writedown.

Name: Problem 12-5 Adapted)Altis a trial at whichProblem 12-5 (AICPA Adapte
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Description: Problem 12-5 Adapted)Altis a trial at whichProblem 12-5 (AICPA Adapted)included the following accounts:Sales (100,000 units at P150)Sales discount9,400,000400,000PurchasesPurchase discountThe inventory purchases during the year were as follows:1,200

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 2PB: LIFO perpetual inventory The beginning inventory for Dunne Co. and data on purchases and sales for a...

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RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of inventory on credit with payment terms of 1/15, net 45. Using the net price method, prepare journal entries to record Johnsons purchases on October 23 and the subsequent payment on October 31. Using the information from RE7-8, prepare journal entries to record Johnsons purchase on October 23 and the subsequent payment on November 30.
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Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning inventory is 100,000. 2. Purchases returns of 4,000 were made. 3. Purchases of 300,000 were made on terms of 2/10, n/30. Eighty percent of the discounts were taken. 4. At December 31, purchases of 20,000 were in transit, FOB destination, on terms of 2/10, n/30. 5. The company made sales of 640,000. The gross selling price per unit is twice the net cost of each unit sold. 6. Sales allowances of 6,000 were made. 7. The company uses the LIFO periodic method and the gross method for purchase discounts. Required: 1. Compute the cost of the ending inventory before the physical inventory is taken. 2. Compute the amount of the cost of goods sold that came from the purchases of the period and the amount that came from the beginning inventory.
Inventory by three cost flow methods Details regarding the inventory of appliances on January 1, 20Y7, purchases invoices during the year, and the inventory count on December 31. 2O’7. of Amsterdam Appliances are summarized as follows: Instructions Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of (a) rising prices and (b) declining prices.
LIFO perpetual inventory The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 6-1B. Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. 2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period. 3. Determine the ending inventory cost on June 30.
Inventory Costing Methods On June 1, Welding Products Company had a beginning inventory of 210 cases of welding rods that had been purchased for S88 per case. Welding Products purchased 1,150 cases at a cost of $95 per case on June 3. On June 19, the company purchased another 950 cases at a cost of $112 per case. Sales data for the welding rods are: Welding Products uses a perpetual inventory system, and the sales price of the welding rods was $130 per case. Required: 1. Compute the cost of ending inventory and cost of goods sold using the FIFO method. 2. Compute the cost of ending inventory and cost of goods sold using the LIFO method. 3. Compute the cost of ending inventory and cost of goods sold using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 4. CONCEPTUAL CONNECTION Assume that operating expenses are $21,600 and Welding Products has a 30% tax rate. How much will the cash paid for income taxes differ among the three inventory methods? 5. CONCEPTUAL CONNECTION Compute Welding Products' gross profit ratio (rounded to two decimal places) and inventory turnover ratio (rounded to three decimal places) under each of the three inventory costing methods. How would the choice of inventory costing method affect these ratios?
On January 1 of Year 1, Dorso Company adopted the dollar-value LIFO method of inventory costing. Dorsos December 31 ending inventory records are as follows: Year 1: Current cost, 20,000; Index, 100 Year 2: Current cost, 33,600; Index, 120 Using the dollar-value LIFO method, compute Dorsos December 31 ending inventory for Year 2.
(Appendix 8.1) Inventory Write-Down Frost Companys inventory records tor the years 2019 and 2020 reveal the cost and market of the January 1, 2019, inventory to be 125,000. On December 31, 2019, the cost of inventory was 130,000, while the market value was only 128,000. The December 31, 2020, market value of inventory was 140,000, and the cost was only 135,000. Frost uses a periodic inventory system. Purchases for 2019 were 100,000 and for 2020 were 110,000. Required: 1. Assume the inventory that existed at the end of 2019 was sold in 2020. Prepare the journal entries at the end of 2019 and 2020 to record the lower of cost or net realizable value under the (a) allowance method and (b) direct method. 2. Prepare the cost of goods sold section of the income statement and show how the company would record the inventory on its balance sheet for 2019 and 2020 under the (a) allowance method and (b) direct method. 3. Next Level Refer to your answer for P8-3. How does the use of a periodic inventory system versus a perpetual inventory system affect the valuation of inventory and the amount reported as income?