Q2 Lautaro & Lukaku's provided the following accounting information for 2021: Jan. 1, 2021 Dec 31, 2021 $65,000 Finished goods inventory $80,000 • Cost Of Goods Manufactured COGM = $320,000 . • Sales revenues = $740,000 • Selling & adm. expenses = $72,000 • Tax rate= 30% Required: 1. Prepare a schedule to calculate the cost of goods sold. 2. Prepare the income statement of this company for 2021
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- Refer to RE22-2. Assume the pretax cumulative effect adjustment is 50,000. Prepare the journal entry that Heller Company would make at the beginning of 2020 to record the cumulative effect of the change from LIFO to FIFO. 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.Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of goods sold 660.0 Gross profit 135.0 Selling expenses 73.5 EBITDA 61.5 Depreciation expenses 12.0 Earnings before interest and taxes (EBIT) 49.5 Interest expenses 4.5 Earnings before taxes (EBT) 45.0 Taxes (40%) 18.0 Net income 27.0 a. Calculate the ratios you think would be useful in this analysis. b. Construct a DuPont equation, and compare the companys ratios to the industry average ratios. c. Do the balance-sheet accounts or the income statement figures seem to be primarily responsible for the low profits? d. Which specific accounts seem to be most out of line relative to other firms in the industry? e. If the firm had a pronounced seasonal sales pattern or if it grew rapidly during the year, how might that affect the validity of your ratio analysis? How might you correct for such potential problems?Purchase-related transactions The following selected transactions were completed by Epic Co. during August of the curr ent year: Aug. 3. Purchased merchandise on account for $33400, terms FOB destination. 2/10. n/30. 9. Issued debit memorandum for $2500 ($2450 net of 2% discount) for merchandise from the August 3 purchase that was damaged in shipment. 10. Purchased merchandise on account, $25,000, terms FOB shipping point, n/com. Paid $600 cash to the freight company for delivery of the merchandise. 13. Paid for invoice of August 3, less debit memorandum of August 9 31. Paid for invoice of August 10. Instructions Illustrate the effects of each of the preceding transactions on the accounts and financial statements of Epic Co. Identify each transaction by date.
- Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning inventory is 100,000. 2. Purchases returns of 4,000 were made. 3. Purchases of 300,000 were made on terms of 2/10, n/30. Eighty percent of the discounts were taken. 4. At December 31, purchases of 20,000 were in transit, FOB destination, on terms of 2/10, n/30. 5. The company made sales of 640,000. The gross selling price per unit is twice the net cost of each unit sold. 6. Sales allowances of 6,000 were made. 7. The company uses the LIFO periodic method and the gross method for purchase discounts. Required: 1. Compute the cost of the ending inventory before the physical inventory is taken. 2. Compute the amount of the cost of goods sold that came from the purchases of the period and the amount that came from the beginning inventory.Goods in Transit Gravais Company made two purchases on December 29, 2019. One purchase for 3,000 was shipped FOB destination, and the second for 4,000 was shipped FOB shipping point. Neither purchase had been received nor paid for on December 31, 2019. Required: Which of these purchases, if either, does Gravais include in inventory on December 31, 2019? What is the cost?Subject: accounting Q: A company had annual cost of goods sold for calendar year 2021 of $85,000 Revenues were $200.000. The inventory balance on 12/31/2021 was $19.000 The balance on 12/31/2020 was $16,000 What is the company's days sales in inventory for 20212 (Hint recall that the inventory turnover ratio for this set of data is 5.0.) (Please select only one best answer) • A. 73 0 B. 82 O C. 70 •O D. 76
- Smile JungkookCompany reported the following balances at the end of each year: 2020 2019 InventoryP2,600,000 P2,900,000 , Accounts Payable 750,000 500,000 The entity paid suppliers P4,900,000 during the year ended December 31, 2020.What should be the amount to be reported for cost of goods sold in 2020?The following information is available for HRH Company for 2019: Freight-in P 30,000 Purchase returns 75,000 Selling expenses 150,000 Ending inventory 260,000 The cost of goods sold is equal to 400% of selling expenses. What is the cost of goods available for sale?13. For the accounting period ended 31 December 2021, merchandise inventories sold were RM100,000 in cash and RM1,000,000 on account. The cost of merchandise inventories was RM750,000 while the Selling and Administrative expenses incurred was RM100,000. What is the amount of the gross profit? Select one: A. RM350,000 B. RM100,000 C. RM250,000 D. RM200,000 14. An adjusted trial balance of Afif & Associates (a legal firm) on 31 October 2021 is as follows: Accounts Debit (RM) Credit (RM) Cash 19,500 Notes Receivable, Short-term 61,000 Rent Receivable 1,500 Office Supplies 13,750 Prepaid Insurance 2,750 Office Equipment 15,000 Accumulated Depreciation – Office Equipment 12,500 Accounts Payable 15,750 Wages Payable 2,250 Unearned Revenue 15,000 Notes Payable, Long-term 25,000 Capital 80,000 Drawings 27,500 Service Revenue 40,250 Rent Revenue 5,500 Wages Expense 38,250 Insurance Expense 6,250…
- QUESTION 1The following are extracts of the income statement and the statement of financial position forMorula Industries.STATEMENT OF INCOME FOR THE YEAR ENDED 31 DECEMBER 2019PulaSales 500,000Less Cost of sales:Opening inventory 120,000Purchases 415,000Cost of goods available for sale 535,000Closing inventory (115,000) (420,000)Gross profit 80,000Operating expenses (40,000)Net surplus for the year 40,000 STAMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019PulaCurrent assetsInventory 115,000Receivables 133,000Bank overdraft 124,000Current LiabilitiesPayables 96,000Capital and reservesShare capital 70,000General reserve 110,000Retained profit 110,000Additional Information The receivables and payables opening balances were P50, 000 each. All sales and purchases were made on credit.Required:a. Calculate the:i. Average payment period. ii. Average age of inventory. iii. Average collection period. iv. Cash conversion cycle. b. Explain five strategies that can improve the cash conversion…CPAinTransit Company has the following balances: Accounts Payable: January 1, 2021 P265,432 ; December 31, 2021 838,923 ; Inventory balance: January 1, 2021 824,687 ; December 31, 2021 453,624 ; Cost of Goods Sold – 2021 1,924,6508. Determine the amount CPAinTransit paid to its suppliers in 2021 * a. 819,019 b. 1,553,587 c. 2,127,078 d. 980,0967. Martinez Corporation had January 1 and December 31 balances as follows. 1/1/20 12/31/20 Inventory $94,000 $108,000 Accounts payable 69,000 78,000 For 2020, cost of goods sold was $440,000.Compute Martinez’s 2020 cash payments to suppliers. Cash payments to suppliers $