Problem 1-19 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: $ 240,000 $ 16,000 $ 160,000 $ 8,000 Sales Beginning merchandise inventory Purchases Ending merchandise inventory Fixed selling expense Fixed administrative expense Variable selling expense Variable administrative expense Contribution margin Net operating income Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how operating income will change in response to changes in unit sales? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Variable expenses: Fixed expenses: Req 3 to 5 Prepare a contribution format income statement. Req 6 ? $ 9,600 $ 12,000 ? $ 48,000 $ 14,400 Todrick Company Contribution Format Income Statement < Req 1 0 0 Req 2 >

Problem 1-19 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: $ 240,000 $ 16,000 $ 160,000 $ 8,000 Sales Beginning merchandise inventory Purchases Ending merchandise inventory Fixed selling expense Fixed administrative expense Variable selling expense Variable administrative expense Contribution margin Net operating income Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how operating income will change in response to changes in unit sales? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Variable expenses: Fixed expenses: Req 3 to 5 Prepare a contribution format income statement. Req 6 ? $ 9,600 $ 12,000 ? $ 48,000 $ 14,400 Todrick Company Contribution Format Income Statement < Req 1 0 0 Req 2 >

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 5.12AMCP

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Costco, Walmart, Nordstrom: Inventory turnover and number of days sales in inventory The general merchandise retail industry has a number of segments represented by the following companies: Company Name Merchandise Concept Costco Wholesale Corporation Membership warehouse Walmart Stores, Inc. Discount general merchandise Nordstrom, Inc. Fashion department store For a recent year, the following cost of goods sold and beginning and ending inventories are provided from corporate annual reports (in millions) for these three companies: Costco Walmart Nordstrom Cost of goods sold 98,458 365,086 8,406 Inventories: Beginning of year 7,894 44,858 1,531 End of year 8,456 45,141 1,733 A. Determine the inventory turnover ratio for all three companies. (Round all calculations to one decimal place.) B. Determine the number of days sales in inventory for all three companies. (Use 365 days and round all calculations to one decimal place.) C. Interpret these results based on each companys merchandising concept.
Sales-related transactions The- following selected transactions were completed by Affordable Supplies Co., which sells supplies primarily to wholesalers and occasionally to retail customers. Jan. 6. Sold merchandise on account, $14,000. terms FOB shipping point, n/com. The cost of merchandise sold was $8,400. 8. Sold merchandise on account. $20,000. terms FOB destination. 1/10. n/30. The cost of merchandise sold was $14,000. 16. Sold merchandise on account, $19-500. terms FOB shipping point, n/30. The cost of merchandise sold was $11,700. 18. Received check for amount due for sale on January 8. 19. Issued credit memorandum for $4,500 for merchandise returned from sale on January 16. The cost of the merchandise returned was $2,700. 26. Received check for amount due for sale on January 16 less credit memorandum of January 19. 31. Paid Cashell Delivery Service $3,000 for merchandise delivered during January to customers under shipping terms of FOB destination. 31. Received cheek for amount due for sale of January 6. Instructions Illustrate the effects of each of the preceding transactions on the accounts and financial statements of Affordable Supplies Co. Identify each transaction by date.
Monster Beverage and Brown-Forman: Inventory turnover 7 and number of days' sales in inventory Monster Beverage Corporation develops, markets, and sells energy and other alternative beverage brands. Brown-Forman Corporation manufactures and sells a wide variety of spirit and wine beverages, such as Jack Daniels. The cost of goods sold and inventory were obtained from a recent annual report for both companies as follows (in millions): Monster Beverage Brown-Forman Cost of goods sold 1,125 928 Inventories: Beginning of year 222 882 End ofyear 175 827 A. Determine the inventory turnover for both companies. (Round all calculations to one decimal place.) B. Determine the number of days sales in inventory for both companies. (Use 365 days and round all calculations to one decimal place.) C. Interpret the difference in inventory efficiency based on the companies respective product types.
Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Appendix Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1,20Y7 380,000 Inventory, April 30,20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30. 20Y8, using the periodic inventory system. b. Determine the gross profit to be-reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventors-system?
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
Exercise 1-6 Traditional and Contribution Format Income Statements [LO1-6] Cherokee Inc. is a merchandiser that provided the following information: Number of units sold 13,000 Selling price per unit $ 17 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 2 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 8,000 Ending merchandise inventory $ 22,000 Merchandise purchases $ 88,000 Required: 1. Prepare a traditional income statement. Cherokee, Inc. Traditional Income Statement Sales $221,000 Cost of goods sold 74,000 Gross margin 147,000 Selling and administrative expenses: Administrative expenses 40,000 Selling expenses 46,000 86,000 Net operating income $61,000 + 2. Prepare a contribution format income statement.…
Exercise 1-6 Traditional and Contribution Format Income Statements [LO1-6] Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 20,000 Selling price per unit $ 30 Variable selling expense per unit $ 4 Variable administrative expense per unit $ 2 Total fixed selling expense $ 40,000 Total fixed administrative expense $ 30,000 Beginning merchandise inventory $ 24,000 Ending merchandise inventory $ 44,000 Merchandise purchases $ 180,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
How can I resolve this promblem Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 12,000 Selling price per unit $ 16 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 2 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 9,000 Ending merchandise inventory $ 23,000 Merchandise purchases $ 85,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 12,000 Selling price per unit $ 16 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 2 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 9,000 Ending merchandise inventory $ 23,000…
Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:Sales$ 420,000Beginning merchandise inventory$ 28,000Purchases$ 280,000Ending merchandise inventory$ 14,000Fixed selling expense?question markFixed administrative expense$ 16,800Variable selling expense$ 21,000Variable administrative expense?question markContribution margin$ 84,000Net operating income$ 25,200Required:Prepare a contribution format income statement.Prepare a traditional format income statement.Calculate the selling price per unit.Calculate the variable cost per unit.Calculate the contribution margin per unit.Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in response to changes in unit sales?
Can you please help me find the answers to the question marks below:Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:Sales $ 180,000Beginning merchandise inventory $ 12,000Purchases $ 120,000Ending merchandise inventory $ 6,000Fixed selling expense $ ?Fixed administrative expense $ 7,200Variable selling expense $ 9,000Variable administrative expense $ ?Contribution margin $ 36,000Net operating income $ 10,800