The corrected amount of 2017 cost of goods sold.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 6.14S

1.

To determine

To Calculate: The corrected amount of 2017 cost of goods sold.

2.

To determine

To State: Whether 2017 cost of goods sold is overstated or understated.

3.

To determine

To Calculate: The corrected amount of 2018 cost of goods sold.

4.

To determine

To State: Whether 2018 cost of goods sold is overstated, or understated.

5.

To determine

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

(Learning Objective 4: Compute and evaluate gross profit percentage and inventory turnover) The Red Wagon Shop had the following inventory data:2017Ending inventory at:FIFO Cost ...............LIFO Cost...............2018$27,92012,510$ 30,50020,150Cost of goods sold at:FIFO Cost ...............LIFO Cost...............Sales revenue ...............$ 87,63097,980138,000Company managers need to know the company’s gross profit percentage and rate of inventoryturnover for 2018 under1. FIFO.2. LIFO.Which method produces a higher gross profit percentage? A higher inventory turnover?

For all exercises, assume the perpetual inventory system is used unless stated otherwise. Correcting an inventory error—two years Nature Foods Grocery.1 reported the following comparative income statements for the year ended June 30, 2019 and 2018: During 2019, Nature Foods Grocery discovered that ending 2018 merchandise inventory was overstated by $5,500. Requirements Prepare corrected income statements for the two years. State whether each year’s net income—before your corrections—is understated or overstated, and indicate the amount of the understatement or overstatement.

Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2018 $45,000 $54,000 2019 78,000 71,000 2020 83,000 78,000 Required:1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method.2. How much higher or lower would cost of goods sold be in the 2020 revised income statement?

Answer 2

Question

Chapter 6, Problem 6.14S

1.

To determine

To Calculate: The corrected amount of 2017 cost of goods sold.

2.

To determine

To State: Whether 2017 cost of goods sold is overstated or understated.

3.

To determine

To Calculate: The corrected amount of 2018 cost of goods sold.

4.

To determine

To State: Whether 2018 cost of goods sold is overstated, or understated.

5.

To determine

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 6.14S

1.

To determine

To Calculate: The corrected amount of 2017 cost of goods sold.

2.

To determine

To State: Whether 2017 cost of goods sold is overstated or understated.

3.

To determine

To Calculate: The corrected amount of 2018 cost of goods sold.

4.

To determine

To State: Whether 2018 cost of goods sold is overstated, or understated.

5.

To determine

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 6.14S

1.

To determine

To Calculate: The corrected amount of 2017 cost of goods sold.

2.

To determine

To State: Whether 2017 cost of goods sold is overstated or understated.

3.

To determine

To Calculate: The corrected amount of 2018 cost of goods sold.

4.

To determine

To State: Whether 2018 cost of goods sold is overstated, or understated.

5.

To determine

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 6.14S

1.

To determine

To Calculate: The corrected amount of 2017 cost of goods sold.

2.

To determine

To State: Whether 2017 cost of goods sold is overstated or understated.

3.

To determine

To Calculate: The corrected amount of 2018 cost of goods sold.

4.

To determine

To State: Whether 2018 cost of goods sold is overstated, or understated.

5.

To determine

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Answer 6

Chapter 6, Problem 6.14S

1.

To determine

To Calculate: The corrected amount of 2017 cost of goods sold.

Answer 7

Chapter 6, Problem 6.14S

1.

To determine

To Calculate: The corrected amount of 2017 cost of goods sold.

Answer 8

2.

To determine

To State: Whether 2017 cost of goods sold is overstated or understated.

Answer 9

2.

To determine

To State: Whether 2017 cost of goods sold is overstated or understated.

Answer 10

3.

To determine

To Calculate: The corrected amount of 2018 cost of goods sold.

Answer 11

3.

To determine

To Calculate: The corrected amount of 2018 cost of goods sold.

Answer 12

4.

To determine

To State: Whether 2018 cost of goods sold is overstated, or understated.

Answer 13

4.

To determine

To State: Whether 2018 cost of goods sold is overstated, or understated.

Answer 14

5.

To determine

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Answer 15

5.

To determine

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 6 - Ravenna Candles recently purchased candleholders...Ch. 6 - Which inventory system maintains a running record...Ch. 6 - How is cost of goods sold classified in the...Ch. 6 - Snyders total cost of goods available for sale...Ch. 6 - Snyders cost of goods sold using the average-cost...Ch. 6 - Snyders ending inventory using the FIFO method...Ch. 6 - Snyders cost of goods sold using the LIFO method...Ch. 6 - Which U.S. GAAP principle or rule would apply if...Ch. 6 - Corrigan Corporation had beginning inventory of...Ch. 6 - Corrigans gross profit for the period is a.79,000....

The corrected amount of 2017 cost of goods sold.

Solution Summary: The author explains the effect of inventory errors on Cost of Goods Sold and Net Income.

Concept explainers

Videos

To Calculate: The corrected amount of 2017 cost of goods sold.

To State: Whether 2017 cost of goods sold is overstated or understated.

To Calculate: The corrected amount of 2018 cost of goods sold.

To State: Whether 2018 cost of goods sold is overstated, or understated.

To State: Whether any other years were impacted by the 2017 $400 understatement of ending inventory.

Want to see the full answer?

Chapter 6 Solutions