On September 30, 2020, a fire at Cherimoya Company's warehouse caused severe damage to its entire inventory. Based on recent history, Cherimoya has a gross profit of 30% of net sales. A physical inventory disclosed usable damaged goods which Cherimoya estimates can be sold to a jobber for P50,000. The following information is available from Cherimoya's records for the nine months ended September 30, 2020. Inventory, Jan. 1 - P550,000 Total purchases recorded, Jan. 1– Sept. 30 (includes P120,000 of goods still in transit, shipped Sept. 29, FOB shipping point) - P3,120,000 Freight in - P60,000 Purchase returns - P200,000 Purchase discounts - P80,000 Total sales delivered and recorded, Jan. 1- Sept. 30 - P3,900,000 Sales returns - P160,000 Sales discounts - P40,000 Using the gross profit method, how much is the inventory loss? *

On September 30, 2020, a fire at Cherimoya Company's warehouse caused severe damage to its entire inventory. Based on recent history, Cherimoya has a gross profit of 30% of net sales. A physical inventory disclosed usable damaged goods which Cherimoya estimates can be sold to a jobber for P50,000. The following information is available from Cherimoya's records for the nine months ended September 30, 2020. Inventory, Jan. 1 - P550,000 Total purchases recorded, Jan. 1– Sept. 30 (includes P120,000 of goods still in transit, shipped Sept. 29, FOB shipping point) - P3,120,000 Freight in - P60,000 Purchase returns - P200,000 Purchase discounts - P80,000 Total sales delivered and recorded, Jan. 1- Sept. 30 - P3,900,000 Sales returns - P160,000 Sales discounts - P40,000 Using the gross profit method, how much is the inventory loss? *

Name: . On September 30, 2020, a fire at Cherimoya Company's warehouse caus
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Description: . On September 30, 2020, a fire at Cherimoya Company's warehouse caused severe damage to itsentire inventory. Based on recent history, Cherimoya has a gross profit of 30% of net sales. Aphysical inventory disclosed usable damaged goods which Cherimo

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 2MC: Moore Company uses the LIFO cost flow assumption and carries Product A in inventory on December 31,...

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At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical count. During 2020, the company discovered that the correct inventory value at the end of 2019 should have been 400,000 because it made a counting error. Upon discovery of this error in 2020, what correcting journal entry will Manny make? Ignore income taxes.
Borys Companys periodic inventory at December 31, 2019, is understated by 10,000, but purchases are correct. Johnson correctly values its 2020 ending inventory. What is the effect of this error on Boryss 2019 and 2020 financial statements?
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Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
At December 31, 2019, the following information was available from Crisford Companys books: Sales for the year totaled 110,600; markdowns amounted to 1,400. Under the approximate lower of average cost or market retail method, Crisfords inventory at December 31, 2019, was: a. 30,800 b. 28.000 c. 21,560 d. 19,600
On January 5, 2019, ShoeKing Corp. sells for cash 500 pairs of volleyball shoes to FootAction, a shoe retailer, for 70 each. FootAction has the right to return the shoes for any reason up to March 31, 2019, for a full refund. The cost of each pair of shoes is 32. ShoeKing predicts that it is probable that 40 pairs of the shoes will be returned. ShoeKing uses the perpetual method for inventory. Required: 1. Prepare ShoeKings journal entry on January 5, 2019, to account for this transaction. 2. Assume that FootAction returns 35 pairs of shoes on March 31, 2019. Prepare the journal entry to record this return.
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The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000
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On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as follows: Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2019. The merchandise inventory as of June 30, 2019, was 508,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was 33,000. 3. Prepare the closing entries for Simkins Company as of June 30, 2019. 4. What would the net income have been if the perpetual inventory system had been used?
Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.