INTERMEDIATE ACCOUNTING RMU 9TH EDITION
9th Edition
ISBN: 9781260998726
Author: SPICELAND
Publisher: MCG
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Chapter 20, Problem 20.12BYP
1
To determine
Inventory error
Inventory errors are sometimes caused by making mistake in physical count, in pricing the inventory correctly, or in recognizing the transfer of title for the goods in transit. These inventory errors affect both the income statement as well as balance sheet.
To Identify: The reason behind the bonuses which will be negatively affected and the effect on pretax earnings.
2
To determine
The way the error will be reported in the company’s financial statement if it is discovered by the auditors in the next year’s audit.
3
To determine
To Discuss: The ethical dilemma faced by J.
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PROBLEM 17
On January 15, 2020, a strong monsoon hit the country and destroyed all the inventory of Aeirron
Company stored in the warehouse. The following information is available from the records of the
company's periodic inventory system:
ww
Beginning inventory
Purchases, January1 to January 15, 2020
Sales, January 1 to January 15, 2020
P1,000.000
500,000
800,000
The following are the past performance of Aeirron Company:
2019
2018
Sales
P4,500,000
P4,100,000
Cost of Sales
2,300,000
2,500,000
Requirements:
1. Compute the gross profit rate of the company for the pastyears.
2. Compute the inventory lost in monsoon.
PROBLEM 15
Examination of the records of Hopper Company for the year ended December 31, 2021 revealed the following:
• Inventory at January 1, 2021 was overstated by P71,000.
• Inventory at December 31, 2021 was understated by P96,000.
•
During 2021, Hopper received a P60,000 cash advance from a customer for merchandise to be manufactured
and shipped during 2022. The P60,000 was credited to sales revenue.
• Profit (before adjustments) reported on the 2021 profit or loss was P658,000.
Explain the right profit for 2021
Ch 10b, HW#3
Use the first-in, first-out (FIFO) cost allocation method, with perpetual inventory
updating, to calculate (a) sales revenue, (b) cost of goods sold, and (c) gross
margin for A75 Company, considering the following transactions.
Number Unit
of Units Cost
Beginning Inventory
120
$46
Purchased Mar. 2
165
48
Sold Mar. 31 for $80 per unit
83
(a) Sales Revenue
(b) Cost of Goods Sold
(c) Gross Margin
%24
%24
Chapter 20 Solutions
INTERMEDIATE ACCOUNTING RMU 9TH EDITION
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
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