Taking e Physl- tory account has a balance of $314,000, but a physical count showɛ that the mer-Electronics Warehouse uses a perpetual inventory system. At year-end, the Inven-ĐXERCISE 56chandise on hand has a cost of only $307,500.cal InventoryINSTRUCTIONS a Explain the probable reason(s) for this discrepancy.b Prepare the journal entry required in this situation.c Indicate all the accounting records to which your journal entry in part b shoulabe posted.Hanson's Gift Shop uses a periodic inventory system. At the end of 1994, the ac-counting records include the following information:EXERCISE 7PeriodicInventorySystemInventory, December 31, 1993 .Inventory, December 31, 1994.$ 6,7004,400Net sales....160,400Purchases81,500a How were the amounts of beginning and ending inventory determined?b Compute the amount of the cost of goods sold in 1994.c Prepare a partial income statement showing the shop's gruss profit in the veer

The question is related to taking physical inventory and perodic inventory system. Required…

Electronics Warehouse uses a perpetual inventory system. At year-end, the Inven Taking e Physl- tory account has a balance of $314,000, but a physical count showɛ that the mer- EXERCISE 56 cal Inventory chandise on hand has a cost of only $307,500. INSTRUCTIONS a Explain the probable reason(s) for this discrepancy. b Prepare the journal entry required in this situation. c Indicate all the accounting records to which your journal entry in part b shoutd be posted. Hanson's Gift Shop uses a periodic inventory system. At the end of 1994, the ac- counting records include the following information: EXERCISE 7 Periodic Inventory System Inventory, December 31, 1993. Inventory, December 31, 1994. $ 6,700 4,400 Net sales.. 160,400 Purchases 81,500 INSTRUCTIONS a How were the amounts of beginning and ending inventory determined? b Compute the amount of the cost of goods sold in 1994. c Prepare a partial income statement showing the shop's gross profit in the vear

Electronics Warehouse uses a perpetual inventory system. At year-end, the Inven Taking e Physl- tory account has a balance of $314,000, but a physical count showɛ that the mer- EXERCISE 56 cal Inventory chandise on hand has a cost of only $307,500. INSTRUCTIONS a Explain the probable reason(s) for this discrepancy. b Prepare the journal entry required in this situation. c Indicate all the accounting records to which your journal entry in part b shoutd be posted. Hanson's Gift Shop uses a periodic inventory system. At the end of 1994, the ac- counting records include the following information: EXERCISE 7 Periodic Inventory System Inventory, December 31, 1993. Inventory, December 31, 1994. $ 6,700 4,400 Net sales.. 160,400 Purchases 81,500 INSTRUCTIONS a How were the amounts of beginning and ending inventory determined? b Compute the amount of the cost of goods sold in 1994. c Prepare a partial income statement showing the shop's gross profit in the vear

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

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Refer to the information for Morgan Inc. above. If Morgan uses a perpetual inventory system, what is the cost of ending inventory under FIFO at April 30? a. $32,500 b. $38,400 c. $63,600 d. $69,500
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The following are independent errors made by a company that uses the periodic inventory system: a. Goods in transit, purchased on credit and shipped FOB destination, 10,000, were included in purchases but not in the physical count of ending inventory. b. Purchase of a machine for 2,000 was expensed. The machine has a 4-year life, no residual value, and straight-line depreciation is used. c. Wages payable of 2,000 were not accrued. d. Payment of next years rent, 4,000, was recorded as rent expense. e. Allowance for doubtful accounts of 5,000 was not recorded. The company normally uses the aging method. f. Equipment with a book value of 70,000 and a fair value of 100,000 was sold at the beginning of the year. A 2-year, non-interest-bearing note for 129,960 was received and recorded at its face value, and a gain of 59,960 was recognized. No interest revenue was recorded and 14% is a fair rate of interest. Required: 1. Next Level Indicate the effect of each of the preceding errors on the companys assets, liabilities, shareholders equity, and net income in the year in which the error occurs. State whether the error causes an overstatement (+), an understatement (), or no effect (NE). 2. Prepare the correcting journal entry or entries required at the beginning of the year for each of the preceding errors, assuming the company discovers the error in the year after it was made. Ignore income taxes.
Lower-of-cost-or market inventory Data on the physical inventory of Moyer Company as of December 31, 20Y9, are presented below. Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Instructions Determine the inventory at cost and at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on an inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: 1. Draw a line through the quantity, and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed below as an example.
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Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the following data available for inventory, purchases, and sales for a recent year. Required: 1. Compute the cost of ending inventory and the cost of goods sold using the specific identification method. Assume the ending inventory is made up of 40 units from beginning inventory, 30 units from Purchase 1, 80 units from Purchase 2, and 40 units from Purchase 3. 2. Compute the cost of ending inventory and cost of goods sold using the FIFO inventory costing method. 3. Compute the cost of ending inventory and cost of goods sold using the LIFO inventory costing method. 4. Compute the cost of ending inventory and cost of goods sold using the average cost inventory costing method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 5. CONCEPTUAL CONNECTION Compare the ending inventory and cost of goods sold computed under all four methods. What can you conclude about the effects of the inventory costing methods on the balance sheet and the income statement?