November 2 Purchase 100 units of inventory on account from Toad Inc. for $100 per unit, terms 3/10, n/30. November November 3 Pay cash for freight charges related to the November 2 purchase, $300. 9 Return 25 defective units from the November 2 purchase and receive credit. November 11 Pay Toad Inc. in full. November 16 Sell 100 units of inventory to customers on account, $12,700. [Hint: The cost of units sold from the November 2 purchase includes $100 unit cost plus $4 per unit for freight less $3 per unit for the purchase discount, or $101 per unit.] November 20 Receive full payment from customers related to the sale on November 16. November 21 Purchase 57 units of inventory from Toad Inc. for $104 per unit, terms 2/10, n/30. November 24 Sell 70 units of inventory to customers for cash, $7,800. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on November 20.)
November 2 Purchase 100 units of inventory on account from Toad Inc. for $100 per unit, terms 3/10, n/30. November November 3 Pay cash for freight charges related to the November 2 purchase, $300. 9 Return 25 defective units from the November 2 purchase and receive credit. November 11 Pay Toad Inc. in full. November 16 Sell 100 units of inventory to customers on account, $12,700. [Hint: The cost of units sold from the November 2 purchase includes $100 unit cost plus $4 per unit for freight less $3 per unit for the purchase discount, or $101 per unit.] November 20 Receive full payment from customers related to the sale on November 16. November 21 Purchase 57 units of inventory from Toad Inc. for $104 per unit, terms 2/10, n/30. November 24 Sell 70 units of inventory to customers for cash, $7,800. (Note: For calculating the cost of inventory sold, ignore the possible purchase discount on November 20.)
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.10AMCP
Related questions
Topic Video
Question
![November
November
November
November 11 Pay Toad Inc. in full.
November 16 Sell 100 units of inventory to customers on account, $12,700. [Hint: The cost of units sold from
2 Purchase 100 units of inventory on account from Toad Inc. for $100 per unit, terms 3/10, n/30.
3 Pay cash for freight charges related to the November 2 purchase, $300.
9 Return 25 defective units from the November 2 purchase and receive credit.
the November 2 purchase includes $100 unit cost plus $4 per unit for freight less $3 per unit for
the purchase discount, or $101 per unit.]
November 20 Receive full payment from customers related to the sale on November 16.
November 21 Purchase 57 units of inventory from Toad Inc. for $104 per unit, terms 2/10, n/30.
November 24 Sell 70 units of inventory to customers for cash, $7,800. (Note: For calculating the cost of
inventory sold, ignore the possible purchase discount on November 20.)
Problem 6-6B Part 3
3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment
for lower of cost and net realizable value.
X Answer is complete but not entirely correct.
YOSHI INC.
Multiple-step Income Statement (partial)
For the month of November
Net Sales
20,500
Cost of Good Sold
16,825 X
Gross Profit
3,675 X
%24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcc35bfef-1e1d-4e62-a745-481127990680%2F0ecbf138-cc3d-41e3-861b-8da221ee6f34%2Fhwlv5fo_processed.png&w=3840&q=75)
Transcribed Image Text:November
November
November
November 11 Pay Toad Inc. in full.
November 16 Sell 100 units of inventory to customers on account, $12,700. [Hint: The cost of units sold from
2 Purchase 100 units of inventory on account from Toad Inc. for $100 per unit, terms 3/10, n/30.
3 Pay cash for freight charges related to the November 2 purchase, $300.
9 Return 25 defective units from the November 2 purchase and receive credit.
the November 2 purchase includes $100 unit cost plus $4 per unit for freight less $3 per unit for
the purchase discount, or $101 per unit.]
November 20 Receive full payment from customers related to the sale on November 16.
November 21 Purchase 57 units of inventory from Toad Inc. for $104 per unit, terms 2/10, n/30.
November 24 Sell 70 units of inventory to customers for cash, $7,800. (Note: For calculating the cost of
inventory sold, ignore the possible purchase discount on November 20.)
Problem 6-6B Part 3
3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment
for lower of cost and net realizable value.
X Answer is complete but not entirely correct.
YOSHI INC.
Multiple-step Income Statement (partial)
For the month of November
Net Sales
20,500
Cost of Good Sold
16,825 X
Gross Profit
3,675 X
%24
![!
Required information
Problem 6-6B Record transactions using a perpetual system, prepare a partial income statement, and
adjust for the lower of cost and net realizable value(LO6-2, 6-3, 6-4, 6-5, 6-6)
[The following information applies to the questions displayed below.]
At the beginning of November, Yoshi Inc.'s inventory consists of 63 units with a cost per unit of $94. The following
transactions occur during the month of November.
November
November
November
November 11 Pay Toad Inc. in full.
November 16 Sell 100 units of inventory to customers on account, $12,700. [Hint: The cost of units sold from
2 Purchase 100 units of inventory on account from Toad Inc. for $100 per unit, terms 3/10, n/30.
3 Pay cash for freight charges related to the November 2 purchase, $300.
9 Return 25 defective units from the November 2 purchase and receive credit.
the November 2 purchase includes $100 unit cost plus $4 per unit for freight less $3 per unit for
the purchase discount, or $101 per unit.]
November 20 Receive full payment from customers related to the sale on November 16.
November 21 Purchase 57 units of inventory from Toad Inc. for $104 per unit, terms 2/10, n/30.
November 24 Sell 70 units of inventory to customers for cash, $7,800. (Note: For calculating the cost of
inventory sold, ignore the possible purchase discount on November 20.)
Problem 6-6B Part 3
3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment
for lower of cost and net realizable value.
X Answer is complete but not entirely correct.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcc35bfef-1e1d-4e62-a745-481127990680%2F0ecbf138-cc3d-41e3-861b-8da221ee6f34%2Fg9zjo7r_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
Problem 6-6B Record transactions using a perpetual system, prepare a partial income statement, and
adjust for the lower of cost and net realizable value(LO6-2, 6-3, 6-4, 6-5, 6-6)
[The following information applies to the questions displayed below.]
At the beginning of November, Yoshi Inc.'s inventory consists of 63 units with a cost per unit of $94. The following
transactions occur during the month of November.
November
November
November
November 11 Pay Toad Inc. in full.
November 16 Sell 100 units of inventory to customers on account, $12,700. [Hint: The cost of units sold from
2 Purchase 100 units of inventory on account from Toad Inc. for $100 per unit, terms 3/10, n/30.
3 Pay cash for freight charges related to the November 2 purchase, $300.
9 Return 25 defective units from the November 2 purchase and receive credit.
the November 2 purchase includes $100 unit cost plus $4 per unit for freight less $3 per unit for
the purchase discount, or $101 per unit.]
November 20 Receive full payment from customers related to the sale on November 16.
November 21 Purchase 57 units of inventory from Toad Inc. for $104 per unit, terms 2/10, n/30.
November 24 Sell 70 units of inventory to customers for cash, $7,800. (Note: For calculating the cost of
inventory sold, ignore the possible purchase discount on November 20.)
Problem 6-6B Part 3
3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment
for lower of cost and net realizable value.
X Answer is complete but not entirely correct.
Expert Solution
LIFO approach :
LIFO approach is used in to answer this question because sales made on November 16 only includes units purchased on November 2 and not opening inventory.
LIFO :
Last in, first out (LIFO) is a method used to account for inventory. Under LIFO, the costs of the most recent products purchased (or produced) are the first to be expensed. LIFO is used only in the United States and governed by the generally accepted accounting principles (GAAP).
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