After the auditors counted the inventory of Cracker Jack Manufacturing Co. and reviewed the accounting records, something appeared to be amiss. Inventory that was counted totaled $295,000. Inventory (1/20) $130,000 Purchases (2020) 760,000 Sales (2020) 1,020,000 Sales returns (2020) 60,000 Gross profit ratio 35% of sales Using the gross profit method, what did the auditors estimate as the amount of inventory that should have been on hand at December 31, 2020?

Q: The following information is presented for Bramble Corporation. The net income errors in ending…

A: Inventory management involves keeping track of the goods, components, and raw materials that a…

Q: Berkshire Inc. uses a periodic inventory system. At the end of 2020, it missed counting some…

A: Periodic inventory system is an inventory system under which all purchase and sale of inventories…

Q: Gon Incorporated reported its inventory balance on December 31, 2016 at P5,000,000. During the…

A: 1) Good purchased and sold in the same year as per periodic system are not recorded.  Hence Gross…

Q: As a result of a thorough physical inventory, Hastings Company determined that it had inventory…

A: Inventory: Inventory is a physical item of trade sold by suppliers during their accounting period.…

Q: The following data were taken from the financial records of Mydorf Company. Net Sales Beginning…

A: Introduction: Written records that describe or attest to company transactions are known as financial…

Q: In your audit of Jose Oliva Company, you find that a physical inventory on December 31, 2020, showed…

A: 1) The consignment goods of are not owned by Oliva . so this transaction is excluded. 2) The…

Q: During your review of the Hearbeat Corporation for the year ended December 31, 2020, you found the…

A: SOLUTION INVENTORY IS A CURRENT ASSETS AND REFERS TO THE ALL STOCK IN VARIOUS PRODUCTION STAGES

Q: In your audit of James Smith Company, you find that a physical inventory on December 31, 2020,…

A: FOB destination: When the seller bears the freight charges for the delivery of merchandise from…

Q: What should be the reported amount of inventory on December 31, 2021? Eisha Company conducted a…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: Over a four-year period, Jackie Corporation reported the following series of gross profits.…

A: Gross profit: It can be defined as the difference between the cost of goods sold and the net sales…

Q: ROBLEM: Sharp Company received P 80,000 of inventory items on the last day of its fiscal year, May…

A: The periodic inventory system is a method of inventory valuation for financial reporting purposes in…

Q: Based on the following data for the current year, what is the inventory turnover? Sales on account…

A: Inventory Turnover ratio : This ratio is the relationship between Cost of goods sold and Average…

Q: The records of Kaitlyn Corporation showed the following on December 31, 2020: Gross Purchases…

A: Solution..   Gross purchase = $380,000  Purchase return = $20,000  Gross profit = $420,000…

Q: The before-tax income for Lonnie Holdiman Co. for 2020 was $101,000 and $77,400 for 2021. However,…

A: Prepare a schedule showing the determination of corrected income before taxes for 2020:

Q: Farley Bains, an auditor with Nolls CPAs, is performing a review of Teal Mountain Inc.’s Inventory…

A: Inventory is a current asset to the company. It consist of goods available for sale, goods in…

Q: Wakowski Company's ending inventory was actually $86,000 but was adjusted and recorded at year end…

A: It is important that we do not over/understate assets in the Statement of Financial Position. We…

Q: In 2021, the internal auditors of Development Technologies, Inc., discovered that a $4 million…

A: Physical inventory count at the end of year 2020 was correct that does not means that accounting of…

Q: The following independent situations relate to inventory accounting. 1.    Kim Co. purchased goods…

A: As you posted multiple questions we are answering only one question that is first question kindly…

Q: Scruffy Brothers Supply does a physical inventory count when the business is closed at the end of…

A: Adjusting entries are made when the accounts are closed and after closing the account, any…

Q: Baldor Company reports inventory at cost of $72,000 and retail of $156,000 on January 1, 2020.…

A: Retail Method: This is a method used to determine the relationship between the cost price and the…

Q: Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b)…

A: Lets understand the basics. When there is inventory overstated or understated then there is impact…

Q: The Relief Goods Corp. reported profit before taxes of ₱370,000 for 2019 and ₱526,000 for 2020. A…

A: Merchandising inventory is the closing inventory of the company held by the firm at the end of the…

Q: Wikki Inc. had the following transactions for the current year with respect to its inventory:

A: Unrealized holding gain is that results from holding on to an investment. It does not realize the…

Q: On December 31, 2010, Paperville computed an ending inventory valuation of $250,000. The accounts…

A: Closing / Ending Inventory Valuation = $250,000 (Adjusted and Clsoed)   Calculation of Ending…

Q: Jungkook Corp. has reported an inventory balance of P2,500,000 (based on physical count on January…

A:

Q: Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b)…

A: In Overstated Inventory :— An adjustment entry for overstated inventory will add the omitted stock,…

Q: he accounting records of DUB Co. showed these data for 2020: Inventory, January 1 P500,000 Purchases…

A: For calculating closing stock we need to prepare trading account . Profit is charged on sales as…

Q: Marigold Inc. took a physical inventory at the end of the year and determined that $777000 of goods…

A: FOB Shipping point goods are shipped, so this will be included in the inventory. Goods on…

Q: Calla Company presented its cost of goods sold statements for the year ended December 31, 2016 with…

A: FOB Shipping Point In the FOB Shipping point method, When items are loaded into a delivery truck,…

Q: Gon Incorporated reported its inventory balance on December 31, 2016 at P5,000,000. During the…

A: 1) Purchase and sold in the same year as per the periodic system . No effect should be given 2)…

Q: .Your review of ABC Company's inventory and related records for the year revealed the following…

A: Gross profit ratio = Gross profit / Sales where, Gross profit = Sales - Cost of goods sold

Q: Farley Bains, an auditor with Nolls CPAS, is performing a review of Teal Mountain Inc.'s Inventory…

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: The following information was taken from the records of Tinker Enterprises: 2019 2018 Beginning…

A:

Q: Capwell Corporation uses a periodic inventory system. The company’s ending inventory on December 31,…

A: 1. Determine the correct amounts for 2018 purchases, accounts payable, sales revenue, and accounts…

Q: Berkshire Inc. uses a periodic inventory system. At the end of 2020, it missed counting some…

A: Tax saved on understated inventory = understated inventory x tax rate = 600000 x 25% = $150,000

Q: If Soda Popinski's Company's ending inventory was actually $86,000 but was adjusted at year end to a…

A: Cost of good sold = Opening inventory + Purchases + Direct expenses - Closing inventory.   So,…

Q: If Wakowski Company's ending inventory was actually $86,000 but was adjusted at year end to a…

A: Solution: Small error in inventory valuation would cause a complete error in a financial statement.…

Q: As a result of taking a physical inventory count on December 31, 2016, the Mona Lisa Company…

A: Closing stock: It is the value of unsold goods at the end of an accounting period is termed as…

Q: Zaheer Abbas, an auditor with Saeed CPAs, is performing a review of K Company’s inventory account. K…

A: Inventory:  Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: Belrose Co. uses the retail inventory method to estimate its inventory for interim statement…

A: Compute the Belrose’s estimated inventory at July 31, 2018, under the lower-of-cost-or-net…

Q: Your client, Mang Kanor Corporation, conducted an early inventory count in its warehouse on December…

A: Cost of goods sold is the actual cost of goods that are being sold to the ultimate customers. It…

Q: As a result of a thorough physical inventory, Ulalam Company determined that it had inventory worth…

A: Solution:- Calculation of  the correct amount of inventory to be reported in Ulalam Company’s…

Q: Dynamite Company’s accounting records indicated the following for 2020: • Inventory, January 1-…

A: Gross profit  ratio = Gross profit / Sales Gross profit = Sales - Cost of goods sold

Q: While  examining the December 31, 2010 financial statements of Dawn Company, the following errors…

A: The Question requires us to calculate corrected Net Income for the year ended December 31,2010.

Q: Lithowanderer Company used the retail method to estimate inventory. Data relating to the inventory…

A: Retail inventory method:  Under this method, the closing stock of inventory is measured using cost…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.