Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Textbook Question
Chapter 6, Problem 6.12E
a.Why does Qualcomm report three different inventories?
b. What costs are included in each of the three inventory accounts?
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This information (in millions) is available for the Automotive and Other Operations Divisions of General Motors Corporation for a recent year. General Motors uses the LIFO inventory method.
Instructions(a) Calculate the inventory turnover ratio and days in inventory.(b) Calculate the current ratio based on inventory as reported using LIFO.
Terizla Company is a retailer and has five major product lines. At year-end, the entity provided the following inventory data:
Units Unit cost NRV per unit
Shoes 100 1,500 2,020
Tshirts 200 470 450
Pants 300 1,300 1,350
Underwear 400 300 310
Polo shirts 500 500 580
9. What is the inventory at year-end using the lower of cost and net realizable value?
a. 1,111,000
b. 1,004,000
c. 1,000,000
d. 1,051,000
Dimitri Company, a manufacturer of small tools, provided the following information from its accounting records for the year ended December 31, 2020.
Inventory at December 31, 2020 (based on physical count of goods in Dimitri's plant, at cost, on December 31, 2020)
$1,520,000
Accounts payable at December 31, 2020
1,200,000
Net sales (sales less sales returns)
8,150,000
Additional information is as follows.
1. Included in the physical count were tools billed to a customer f.o.b. shipping point on December 31, 2020. These tools had a cost of $31,000 and were billed at $40,000. The shipment was on Dimitri's loading dock waiting to be picked up by the common carrier.
2. Goods were in transit from a vendor to Dimitri on December 31, 2020. The invoice cost was $76,000, and the goods were shipped f.o.b. shipping point on December 29, 2020.
3. Work in process inventory costing $30,000 was sent to an outside processor for plating on December 30, 2020.
4. Tools returned by…
Chapter 6 Solutions
Survey of Accounting (Accounting I)
Ch. 6 - At the end of the fiscal year, before the accounts...Ch. 6 - At the end of the fiscal year, Accounts Receivable...Ch. 6 - Prob. 3SEQCh. 6 - The following units of a particular item were...Ch. 6 - Prob. 5SEQCh. 6 - Prob. 1CDQCh. 6 - What types of transactions give rise to accounts...Ch. 6 - In what section of the balance sheet should a note...Ch. 6 - Give two examples of other receivables.Ch. 6 - Carter’s Hardware is a small hardware store in the...
Ch. 6 - Which of the two methods of accounting for...Ch. 6 - Prob. 7CDQCh. 6 - After the accounts are adjusted at the end of the...Ch. 6 - Prob. 9CDQCh. 6 - How are manufacturing inventories different from...Ch. 6 - Prob. 11CDQCh. 6 - Does the term last-in in the LIFO method mean that...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Prob. 14CDQCh. 6 - Prob. 15CDQCh. 6 - Prob. 16CDQCh. 6 - Prob. 17CDQCh. 6 - Prob. 18CDQCh. 6 - Prob. 6.1ECh. 6 - Determine due date and interest on notes Determine...Ch. 6 - Nature of uncollectible accounts MGM Resorts...Ch. 6 - Uncollectible accounts, using direct write-off...Ch. 6 - Uncollectible receivables, using allowance method...Ch. 6 - Writing off accounts receivable Quantum...Ch. 6 - Estimating doubtful accounts Easy Rider...Ch. 6 - Entry for uncollectible accounts Using the data in...Ch. 6 - Providing for doubtful accounts At the end of the...Ch. 6 - Effect of doubtful accounts on net income During...Ch. 6 - Effect of doubtful accounts on net income Using...Ch. 6 - Qualcomm Incorporated (QCOM) is a leading...Ch. 6 - Film costs of DreamWorks DreamWorks Animation SKG...Ch. 6 - Inventory by three methods The units of an item...Ch. 6 - Inventory by three methods; cost of goods sold The...Ch. 6 - Comparing inventory methods Assume that a firm...Ch. 6 - Prob. 6.17ECh. 6 - Lower-of-cost-or-market inventory On the basis of...Ch. 6 - Inventory on the balance sheet Based on thy data...Ch. 6 - Allowance method for doubtful accounts Averys...Ch. 6 - Allowance method for doubtful accounts Averys...Ch. 6 - Allowance method for doubtful accounts Averys...Ch. 6 - Allowance method for doubtful accounts Averys...Ch. 6 - Allowance method for doubtful accounts Averys...Ch. 6 - Allowance method for doubtful accounts Averys...Ch. 6 - Estimate uncollectible accounts For several years....Ch. 6 - Estimate uncollectible accounts For several years....Ch. 6 - Compare two methods of accounting for...Ch. 6 - Compare Two methods of accounting for...Ch. 6 - Inventory by three cost flow methods Details...Ch. 6 - Inventory by three cost flow methods Details...Ch. 6 - Inventory by three cost flow methods Details...Ch. 6 - Inventory by three cost flow methods Details...Ch. 6 - Lower-of-cost-or market inventory Data on the...Ch. 6 - Prob. 6.1MBACh. 6 - Allowance method Using transactions listed in...Ch. 6 - Prob. 6.3MBACh. 6 - Prob. 6.4MBACh. 6 - Lower of cost or market Using data in E6-18,...Ch. 6 - Prob. 6.6.1MBACh. 6 - Prob. 6.6.2MBACh. 6 - Accounts receivable and inventory turnover The...Ch. 6 - Prob. 6.6.4MBACh. 6 - Prob. 6.6.5MBACh. 6 - Prob. 6.6.6MBACh. 6 - Prob. 6.7.1MBACh. 6 - Prob. 6.7.2MBACh. 6 - Prob. 6.7.3MBACh. 6 - Prob. 6.7.4MBACh. 6 - Prob. 6.7.5MBACh. 6 - Prob. 6.7.6MBACh. 6 - Prob. 6.8MBACh. 6 - Prob. 6.9.1MBACh. 6 - Prob. 6.9.2MBACh. 6 - Prob. 6.9.3MBACh. 6 - Prob. 6.9.4MBACh. 6 - Prob. 6.9.5MBACh. 6 - Prob. 6.9.6MBACh. 6 - Prob. 6.10.1MBACh. 6 - Prob. 6.10.2MBACh. 6 - Prob. 6.10.3MBACh. 6 - Prob. 6.10.4MBACh. 6 - Prob. 6.10.5MBACh. 6 - Prob. 6.10.6MBACh. 6 - Prob. 6.1CCh. 6 - Collecting accounts receivable The following is an...Ch. 6 - Ethics and professional conduct in business...Ch. 6 - LIFO and inventory flowInstructions The following...
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- Use the following information to compute cost of goods sold under the FIFO and LIFO inventory methods. The firm sold 200 units.arrow_forwardThe general merchandise retail industry has a number of segments represented by the following companies: 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: 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.arrow_forwardGolden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Sales: The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.arrow_forward
- Dimitri Company, a manufacturer of small tools, provided the following information from its accounting records for the year ended December 31, 2020. Inventory at December 31, 2020 (based on physical count of goods in Dimitri’s plant, at cost, on December 31, 2020) $1,520,000 Accounts payable at December 31, 2020 1,200,000 Net sales (sales less sales returns) 8,150,000 Additional information is as follows. 1. Included in the physical count were tools billed to a customer f.o.b. shipping point on December 31, 2020. These tools had a cost of $31,000 and were billed at $40,000. The shipment was on Dimitri’s loading dock waiting to be picked up by the common carrier. 2. Goods were in transit from a vendor to Dimitri on December 31, 2020. The invoice cost was $76,000, and the goods were shipped f.o.b. shipping point on December 29, 2020. 3. Work in process inventory costing $30,000 was sent to an outside processor for plating on December 30, 2020. 4. Tools…arrow_forward[The following information applies to the questions displayed below.] Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis Clark Inventory (beginning) $ 14,000 $ 40,000 Inventory (ending) 8,000 50,000 Purchases 120,000 150,000 Purchase returns 5,000 50,000 Required: 1. Calculate cost of goods sold for each company.arrow_forwardDuring the year, TRC Corporation has the following inventory transactions.For the entire year, the company sells 450 units of inventory for $70 each.Required:1. Using FIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit.2. Using LIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit.3. Using weighted-average cost, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit.4. Determine which method will result in higher profitability when inventory costs are rising.arrow_forward
- The Westmoreland Corporation uses a periodic system for its inventory. The company starts the current year with inventory costing $177,000. During the year, an additional $387,000 is paid for inventory purchases and $17,000 for transportation costs to get those items. A physical count at the end of the year finds $145,000 of ending inventory. How was each of these numbers derived? What is the company’s cost of goods sold?arrow_forwardNorwood Company makes miniature circuit boards that are components of wireless phones and personal organizers. The company has experienced strong growth, and you are especially interested in how well Norwood is managing its inventory balances. You have collected the following information for the current year. Inventory at the beginning of year: $ 1,026,000Inventory at the end of year, before any adjustments: 1,007,000Total cost of goods sold, before any adjustments: 11,776,000 The company values inventory at lower-of-cost (using LIFO cost fl ow assumption)-or-market; use the cost-of-goods-sold method.Instructions(a) Compute Norwood’s inventory turnover before any adjustment.(b) Recompute the inventory turnover after adjusting Norwood’s inventory information for the following items.1. During the year, Norwood recorded sales and costs of goods sold on $22,000 of units shipped to various wholesalers on consignment. At year-end, none of these units have been sold by wholesalers.2.…arrow_forwardDuring the year, Trombley Incorporated has the following inventory transactions.For the entire year, the company sells 81 units of inventory for $30 each. Required: 1. Using FIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. 2. Using LIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. 3. Using weighted-average cost, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. 4. Determine which method will result in higher profitability when inventory costs are declining.arrow_forward
- The general merchandise retail industry has a number of segments represented by the following companies: For a recent year, the following cost of goods sold and beginning and ending inventories arc provided from corporate annual reports (in millions) for these three companies: 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 company's merchandising concept.arrow_forwardNorwood Company makes miniature circuit boards that are components of wireless phones and personal organizers. The company has experienced strong growth, and you are especially interested in how well Norwood is managing its inventory balances. You have collected the following information for the current year. Inventory at the beginning of year $ 1,026,000 Inventory at the end of year, before any adjustments 1,007,000 Total cost of goods sold, before any adjustments 11,776,000 The company values inventory at lower-of-cost (using LIFO cost flow assumption)-or-market; use the cost-of-goods-sold method. Instructions a. Compute Norwood’s inventory turnover before any adjustment. b. Recompute the inventory turnover after adjusting Norwood’s inventory information for the following items. 1. During the year, Norwood recorded sales and costs of goods sold on $22,000 of units shipped to various wholesalers on consignment. At year-end, none of these units have been sold…arrow_forwardDimitri Company, a manufacturer of tools, has provided the following data from its accounting records for the year ended December 31, 2014. Inventory at 12/31/14 (based on physical count) - $1,750,000 Accounts payable at 12/31/14 - 1,200,000 Net sales - 8,500,000 Additional information is as follows: 1) Included in the physical count were tools billed to a customer f.o.b. shipping point on December 31, 2014. These tools had a cost of $28,000 and were billed at $35,000. The shipment was on Dimitri’s loading dock waiting to be picked up by the common carrier. 2) Goods were in transit from a vendor to Dimitri on December 31, 2014. The invoice cost was $50,000, and the goods were shipped f.o.b. shipping point on December 29, 2014. 3) Work in process inventory costing $20,000 was sent to an outside processor for plating on December 30, 2014. 4) Tools returned by customers and held pending inspection in the returned goods area on December 31, 2014, were not included in the physical…arrow_forward
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