Please help me STRAIGHT PROBLEMSProblem 11Determining ending inventory using the retail inventory methodMighty Kingdom Company used the retail inventory method to approximate the ending inventory.CostRetail1,200,0009,000,000 14,700,000650,000Beginning InventoryPurchasesFreight-inPurchase returns200,000300,000150,000200,000500,000Purchase AllowancesDepartmental transfer-inNet markup300,000300,000Net markdown1,000,0009,500,000100,000500,000600,000400,000SalesSales DiscountsEmployee DiscountsEstimated normal shoplifting lossesEstimated normal shrinkageInstructions:1. Compute the estimated cost of ending inventory using the conservative approach2. Compute the estimated cost of ending inventory using the average cost approach3. Compute the estimated cost of ending inventory using the FIFO approach

Particulars Cost Retail Beginning inventory 650,000 1,200,000 Add: Net Purchases (Purchase -…

Instructions: 1. Compute the estimated cost of ending inventory using the conservative approach 2. Compute the estimated cost of ending inventory using the average cost approach 3. Compute the estimated cost of ending inventory using the FIFO approach

Instructions: 1. Compute the estimated cost of ending inventory using the conservative approach 2. Compute the estimated cost of ending inventory using the average cost approach 3. Compute the estimated cost of ending inventory using the FIFO approach

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 32CE: ( Appendix 6B) Inventory Costing Methods: Periodic Average Cost Refer to the information for...

See similar textbooks

Related questions

Q: Client 5: Extreme Company The following ledger account is a copy of the bank account in the ledger o...

A: The bank reconciliation statement is prepared to equate the balances of cash book and passbook with ...

Q: Consider the balance sheet for Inspired to Thrive (IT) Bank below: Inspired to Thrive Bank Balance S...

A: Leverage ratio = Debt to Equity Ratio = Debt/Equity Debt to Capital ratio = Debt/Total Capital Debt ...

Q: The following income statement and selected balance sheet account data are available for Treece, Ic....

A: The statement of cash flows generated using the indirect approach adjusts net income for changes in ...

Q: ue to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporat...

A: Solution 5-a: Contribution margin (existing + $3) 13 / Sales price per unit 20 New Contribut...

Q: La Lisa uses FIFO for inventory costing: Beginning Inventory 300 units Units Produced 600 Units Sold...

A: The main difference between the absorption costing and variable costing is the treatment of fixed ma...

Q: ABC Company (ABC), a manufacturer of hybrid engine vehicles, had pretax financial income of P30 bill...

A: Solution Taxable income refers to any individual's or business compensation that is used to determi...

Q: am unsure of how to group into assets, liabilities and shareholder equity.

A: Introduction:- The following balance sheet or accounting equation used as follows unde:- Total asset...

Q: Which of the following has the most effective annual rate of interest? 12.15% compounded semi-annual...

A: Effective Annual Rate of Interest: An effective annual interest rate is the true return on a savings...

Q: Analyze each of the following situations below and provide your assessment of the potential resoluti...

A: An auditor is a person who is authorized to assess and verify the accuracy of financial papers, as w...

Q: Depreciation for Partial Periods Hathaway Company purchased a copying machine for $8,700 on October ...

A: Depreciation is the value of charge on the asset for using it in the business including the normal w...

Q: CONGRATULATIONS Compnay recently acquired two items of equipment: >Acquired a press at an invoice p...

A: Fixed asset: It implies to a non-current tangible asset that is used by the business for a period of...

Q: Given below are the transactions related to Abdullah Enterprises for the month of March 2019. Date M...

A: The question is related to Journal entry, Ledgers amd Trial Balance of Abdullah Enterprises for the...

Q: FORTEN COMPANY Income Statement For Current Year Ended December 31 $ 642,500 297,000 345,500 Sales C...

A: The cash flow statement is prepared to record the cash flow from various activities during the perio...

Q: Depreciation for Partial Periods Hathaway Company purchased a copying machine for $8,700 on October ...

A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by u...

Q: iple wants to purchase a hom couple will put down a 20% down pa average rate for a 30-year fixed mor...

A: Calculation of EMI EMI = [P x R x (1+R)^N]/[(1+R)^N-1 Where, P = Loan Amount, R= Rate , N = No. of...

Q: A certain machine has book value of P173,205.08 after 5 years and P82,187.59 after 8 years. The book...

A: Suppose Depreciation Rate = r Value after 8 years = Value after 5 years x (1 - r)^3 Then, Initial Va...

Q: What is the main taxation ruling that governs options taxation processes?

A: Stock Market: The stock market extensively alludes to the assortment of trades and different scenes ...

Q: 1) In January 2020, Simon Corporation began selling a new line of products that carry a two-year war...

A: Formula: Warranty expense for 2021 = Warranty Liability at the end of 2021 + Actual Warranty expendi...

Q: Financial ratio analysis is a widely used tool for assessing the "health" of an organization and ide...

A: Financial ratings are quantitative indicators that distinguish important information from a company'...

Q: Creative Stuff, Inc. produced 10,000 units of output but sold only 9,000 of the units produced. Incl...

A: Total Revenue- Total revenue is the total amount of money earned by a company from the sale of goods...

Q: A widower was granted a loan of P20,000 by her employer with an interest of 6% for 3 months. The com...

A: A promissory note is a sort of debt instrument that consists of a written commitment by one party (t...

Q: What is the EI expense?

A: EI expense Employment Practices Liability Insurance is what Employment Insurance stands for. Employ...

Q: Introduction and client background You are an audit senior in Riskam and Co and you are commencing t...

A: Audit review is the result of research. As an integral part of the audit report, audit findings repr...

Q: Fasani produces premium bottled water. Fasani purchases artesian water, stores the water in large ta...

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a...

Q: Prepare the journal entry to record Autumn Company's issuance of 63,000 shares of no-par value commo...

A: Issue of Shares: In business, the issuance of shares refers to the process through which companies d...

Q: Paul’s Pool Service provides pool cleaning, chemical application, and pool repairs for residential c...

A: A budget is the statement of expected future expenses and revenues for a specific period of time. Bu...

Q: Management of the Toys R4U Company needs to decide whether to introduce a certain new novelty toy fo...

A: Note: “As the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the...

Q: 2.8: Assuming that today's date is 1 January 2018, calculate the present value of each of the follow...

Q: A. Assume that you have completed your plans and proformas for the next year of operations. Your pro...

A: Decision making is an important part of conducting every business transactions in an entity. The dec...

Q: shmart, Inc., began operations this year. The company produced 1,000 units and sold 1,000 units at a...

A: Solution: Net income under absorption costing will be computed by first determining gross profit and...

Q: Based on the limited information above, what would be the net effect of the proposed discount scheme...

A: Savings from Proposed scheme = Reduction in Accounts Receivable x Cost of Capital Reduction in Accou...

Q: Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume ...

A: Cost volume profit analysis is the technique used by the management for decision-making. The methods...

Q: Bradman Ltd has the following budgeted unit sales figures for the six months from July 2005: July 80...

A: Solution Working note- 1- Material used in october will be purchased in september . Material used in...

Q: • The Choose the answer from the menu in accordance to the question statement _--- method includes b...

A: There are many two types of sampling approaches used when auditing the financial statement of the co...

Q: dentify and explain, in your own words, the five (5) fundamental ethical principles that apply to al...

A: Professional Ethics It is important for the professional Accountant should have the professional eth...

Q: Leonard Motors is trying to increase its international export business. It is considering several al...

Q: Kikkoman Corporation operates two stores: A1 and B2. The following information relates to store B2: ...

A: Segment margin is the amount of profit or loss produced by one component of a business. Segment marg...

Q: A building has a salvage value of P1,000,000O at the end of its useful life of 50 years. The straigh...

A: Depreciation as per straight line method = (Cost - salvage value) /useful life

Q: For instance, say the total cost of producing 100 units of a good is P200. The total cost of produci...

A: Marginal cost is the cost of producing additional units of a product.

Q: An analysis of the Marketable Securities control account of Fancher Products, Inc., shows the follow...

A: The cash flow statement is prepared to record the cash flow from various activities during the perio...

Q: Food Delivery Services (FDS) share price is worth $18 today. In a year, the market for meal prep del...

A: In case of probabilistic data, returns are calculated using the various expected returns with corres...

Q: Complete the remaining columns of the payroll register for the five employees whose information was ...

A: The payroll register is prepared to calculate the withholdings and net pay of each and every employe...

Q: Ningning Company makes a white liquid substance that is used to cover errors made on printed documen...

A: Solution... Standard quantity = Actual output * standard quantity per unit = 900,000 units * ...

Q: Your company is considering a new project that will require $10,000 of new equipment at the start of...

A: Annual Depreciation=Cost of Asset-Salvage ValueDepreciable Life

Q: Cash Budget Friendly Freddie's is an independently owned major appliance and electronics discount c...

A: A cash budget refers to a summary prepared for the estimated cash movements i.e. cash receipts and c...

Q: Lindon Company is the exclusive distributor for an automotive product that sells for $28.00 per unit...

A: If variable cost reduced by $2.8 per unit. New Variable cost per unit = $19.6-$2.8 = $16.8 New Cont...

Q: The estimated total factory overhead cost and total machine hours for Department 40 for the current ...

Q: We are considering the purchase of a $560,000 computed based inventory management system. It is in c...

A: Business organizations are required to charge the depreciation expense so that the assets are shown ...

Q: A company used a type of truck which cost P2 million with life of 3 ears and final salvage value of ...

A: It is the entire cost which will be recognized as the cost of the fixed asset. It includes the cost ...

Q: L819.200 LE19.200 The following additional information is given: i. Stock at 31/12/2014 GH¢84,000 Ca...

A: Income Statement The purpose of preparing the income statement is to know the net income which are d...

Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

Please help me

STRAIGHT PROBLEMS
Problem 11
Determining ending inventory using the retail inventory method
Mighty Kingdom Company used the retail inventory method to approximate the ending inventory.
Cost
Retail
1,200,000
9,000,000 14,700,000
650,000
Beginning Inventory
Purchases
Freight-in
Purchase returns
200,000
300,000
150,000
200,000
500,000
Purchase Allowances
Departmental transfer-in
Net markup
300,000
300,000
Net markdown
1,000,000
9,500,000
100,000
500,000
600,000
400,000
Sales
Sales Discounts
Employee Discounts
Estimated normal shoplifting losses
Estimated normal shrinkage
Instructions:
1. Compute the estimated cost of ending inventory using the conservative approach
2. Compute the estimated cost of ending inventory using the average cost approach
3. Compute the estimated cost of ending inventory using the FIFO approach

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Calculating ending inventory at retail

VIEW

Step 2: Conservative approach

VIEW

Step 3: Average cost approach

VIEW

Step 4: FIFO approach

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

( Appendix 6B) Inventory Costing Methods: Periodic System Harrington Company had the following data for inventory during a recent year: Assume that Harrington uses a periodic inventory accounting system. Required: 1. Using the FIFO, LIFO, and average cost methods, compute the ending inventory and cost of goods sold. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 2. CONCEPTUAL CONNECTION Which method will produce the most realistic amount for income? For inventory? 3. CONCEPTUAL CONNECTION Which method will produce the lowest amount paid for taxes?
( Appendix 6B) Inventory Costing Methods: Periodic Average Cost Refer to the information for Filimonov Inc. (p. 337) and assume that the company uses a periodic inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.)
( Appendix 6B) Inventory Costing Methods: Periodic Inventory System The inventory accounting records for Lee Enterprises contained the following data: Required: 1. Calculate the cost of ending inventory and the cost of goods sold using the FIFO, LIFO, and average cost methods. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 2. CONCEPTUAL CONNECTION Compare the ending inventory and cost of goods sold computed under all three methods. What can you conclude about the effects of the inventory costing methods on the balance sheet and the income statement?
Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of December 31 follows: Description Inventory Quantity Market Value per Unit (Net Realizable Value) A54 37 56 C77 24 178 F66 30 132 H83 21 545 K12 375 5 Q58 90 18 S36 8 235 V97 140 20 Y88 17 744 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Description Last Purchases Invoice Next-to-the-Last Purchases Invoice Quantity Purchased Unit Cost Quantity Purchased Unit Cost A54 30 60 40 58 C77 25 174 15 180 F66 20 130 15 128 H83 6 547 15 540 K12 500 6 500 7 Q58 75 25 80 26 S36 5 256 4 260 V97 100 17 115 16 Y88 10 750 8 740 Instructions Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the 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 as an example. Inventory Sheet December 31 Description Unit Inventory Quantity Cost per Unit Market Value per Unit(Net Realizable Value) Total Cost Market LCM A54 37 30 60 56 1,800 1,680 7 58 56 406 392 2,206 2,072 2,072
( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory system, what is the cost of goods sold under FIFO at April 30? a. $32,800 b. $38,400 c. $63,600 d. $69,200
( Appendix 6B) Inventory Costing Methods: Periodic LIFO Refer to the information for Filimonov Inc. (p. 337) and assume that the company uses a periodic inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the LIFO inventory costing method.
Inventory Write-Down Byron Company has five products in its inventory and uses the FIFO cost flow assumption. Specific data for each product are as follows: Required: 1. What is the correct inventory value, assuming the LCNRV rule is applied to each item of inventory? 2. What is the correct inventory value, assuming the LCNRV rule is applied to the total of inventory? 3. Next Level Comment on any differences that result from applying the LCNRV rule to individual items compared to the total of inventory.