EP HORNGREN'S FINAN.+MGRL.ACCT.-ACCESS
7th Edition
ISBN: 9780136516309
Author: MILLER-NOBLES
Publisher: PEARSON CO
expand_more
expand_more
format_list_bulleted
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Retail Method; Gross Profit Method
Selected data on merchandise inventory, purchases, and sales for Celebrity Tan and Ranchworks Co. are as
follows:
Cost
Retail
Celebrity Tan
Merchandise inventory, August 1
$354,000
$520,000
Transactions during August:
Purchases (net)
Sales
4,066,000
5,980,000
6,152,000
Ranchworks Co.
Merchandise inventory, March 1
$285,000
Transactions during March through November:
Purchases (net)
3,786,000
Sales
5,915,000
Estimated gross profit rate
35%
Assume that
Toys Galore
store purchased and sold a line of dolls during
December
as follows:
Dec. 1 Beginning merchandise inventory 13 units @ $9 each
Dec. 8 Sale 8 units @ $22 each
Dec. 14 Purchase 16 units @ $14 each
Dec. 21 Sale 14units @$22 each
Read the requirements.
1.
Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.
2.
Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.
3.
Which method results in a higher cost of goods sold?
4.
Which method results in a higher cost of ending merchandise inventory?
5.
Which method results in a higher gross profit?
Toys Galore
uses the perpetual inventory system.
Requirement 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.
Begin by computing the…
In the table below, fill in the March 24 quantity, unit cost, and total cost in the spaces provided for determining Cost of Merchandise Sold
(COMS) and Merchandise Inventory under the LIFO cost flow assumption, assuming 31 shoes are sold on March 24. Determine the COMS and
Merchandise inventory final balances. If units are in inventory or are listed under cost of merchandise sold at two different costs, enter the
units that were purchased earliest first.
LIFO Cost Flow Assumption
Purchases
Cost of Mérchandise Sold
Merchandise Inventory
Date
Quảntity Unit Cost Total Cost
Quảntity
Unit Cost Total Cost
Quảntity
Unit Cost
Total Cost
Mar. 1
26
35
910
26
35
910
19
35
$665
35
245
11
35
48
1680
35
245
35
45
1680
24
31 Balances
Chapter 6 Solutions
EP HORNGREN'S FINAN.+MGRL.ACCT.-ACCESS
Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QCCh. 6 - At December 31, 2016, Stevenson Company overstated...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ
Ch. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - What is the goal of conservatism?Ch. 6 - Prob. 5RQCh. 6 - Under a perpetual inventory system, what are the...Ch. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - What does the lower-of-cost-or-market (LCM) rule...Ch. 6 - What account is debited when recording the...Ch. 6 - What is the effect on cost of goods sold, gross...Ch. 6 - When does an inventory error cancel out, and why?Ch. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15ARQCh. 6 - Prob. 16ARQCh. 6 - Determining inventory accounting principles Ward...Ch. 6 - Prob. 6.2SECh. 6 - Prob. 6.3SECh. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Comparing Cost of Goods Sold under FIFO, UFO, and...Ch. 6 - Prob. 6.8SECh. 6 - Prob. 6.9SECh. 6 - Prob. 6.10SECh. 6 - Prob. 6.11SECh. 6 - Prob. 6.12SECh. 6 - Prob. 6.13SECh. 6 - Using accounting vocabulary Match the accounting...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Use the following information to answer Exercises...Ch. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Prob. 6.21ECh. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Prob. 6.24ECh. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Prob. 6.28APCh. 6 - Prob. 6.29APCh. 6 - Prob. 6.30APCh. 6 - Prob. 6.31APCh. 6 - Prob. 6.32APCh. 6 - Prob. 6.33BPCh. 6 - Prob. 6.34BPCh. 6 - Prob. 6.35BPCh. 6 - Prob. 6.36BPCh. 6 - Prob. 6.37BPCh. 6 - Prob. 6.38CPCh. 6 - Prob. 6.39PSCh. 6 - Prob. 6.1COPCh. 6 - Prob. 6.1CTDC
Knowledge Booster
Similar questions
- Inventory Costing Methods Andersons Department Store has the following data for inventory, purchases, and sales of merchandise for December. Andersons uses a perpetual inventory system. All purchases and sales were for cash. Required: 1. Compute cost of goods sold and the cost of ending inventory using FIFO. 2. Compute cost of goods sold and the cost of ending inventory using LIFO. 3. Compute cost of goods sold and the cost of ending inventory using the average cost method. ( Note: Use four decimal places for per-unit calculations.) 4. Prepare the journal entries to record these transactions assuming Anderson chooses to use the FIFO method. 5. CONCEPTUAL CONNECTION Which method would result in the lowest amount paid for taxes?arrow_forwardSelected data on merchandise inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows: Instructions 1. Determine the estimated cost of the merchandise inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the computations. 2. a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that 369,750 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March through November?arrow_forwardShown below is activity for one of the products of Monique Aaron Corp Purchases Sales # Units $ per Unit # Units $ per Unit 1-Jan 500 55 10-Jan 500 60 12-Jan 800 75 20-Jan 1000 63 28-Jan 750 80 Compute the ending inventory, cost of goods available for sale, cost of goods sold in both units and dollars and the Gross Profit assuming the company uses the perpetual Lifo and perpetual fifo methods.arrow_forward
- In the table below, fill in the March 24 quantity, unit cost, and total cost in the spaces provided for determining Cost of Merchandise Sold (COMS) and Merchandise Inventory under the FIFO cost flow assumption, assuming 31 shoes are sold on March 24. Determine the COMS and Merchandise inventory final balances. If units are in inventory or are listed under cost of merchandise sold at two different costs, enter the units that were purchased earliest first. FIFO Cost Flow Assumption Purchases Cost of Merchandise Sold Merchandise Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Mar. 1 26 35 910 26 35 910 19 35 665 35 245 11 35 48 1680 35 245 35 48 1680 24 31 Balancesarrow_forwardAssume that J R Toys store purchased and sold a line of dolls during December as follows: (Click the icon to view the transactions.) JR Toys uses the perpetual inventory system. More info Dec. 1 Beginning merchandise inventory 8 Sale 14 Purchase 21 Sale 13 7 14 13 units @ $ 8 each units @ $18 each units @ $ 16 each units @ $ 18 each. - X Requirements 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. 3. Which method results in a higher cost of goods sold? 4. Which method results in a higher cost of ending merchandise inventory? 5. Which method results in a higher gross profit?arrow_forwardAssume that Whitewall Tire Store completed the following perpetual inventory transactions for a line of tires: i (Click the icon to view the transactions.) Read the requirements. Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Date Quantity Dec. 1 11 23 261 29 Totals Purchases Unit Cost Cost of Goods Sold Total Unit Cost Quantity Cost Total Cost Inventory on Hand Unit Quantity Cost C Total Cost More info Dec. 1 Beginning merchandise inventory Dec. 11 Purchase Dec. 23…arrow_forward
- Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. January 1 January 10 Date March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 Totals Goods Purchased # of units Cost per unit # of units sold Perpetual LIFO: Cost of Goods Sold Cost per unit Cost of Goods Sold # of units Inventory Balance Cost per unit Inventory Balancearrow_forwardCh 9 Problem Set B Problem 9-1 Part B The company uses the perpetual inventory method. It began the month of March with 100 units of inventory, at a unit cost of $55. Purchases during March March 5, 60 units at $60 each. March 18, 200 units at $65 each March 29, 40 units at $75 each. Sales during March March 12, 60 units. March 25, 210 units. All units were sold to customer for $100 each. 1. Use the following format to set up this inventory costing problem, as shown in Video #2. Inventory Date Units Cost per Total Cost Date Units Total Cost Unit Beg Balance Units Cost Beginning Balance + Purchases Goods Available for Sale - Sold Ending Balancearrow_forwardAssume that AB Tire Store completed the following perpetual inventory transactions for a line of tires: (Click the icon to view the transactions.) Requirements 1. 2. 3. 4. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Compute cost of goods sold and gross profit using the LIFO inventory costing method. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) Which method results in the largest gross profit, and why? X More info 4 Dec. 1 Beginning merchandise inventory Dec. 11 Purchase Dec. 23 Sale Dec. 26 Purchase Dec. 29 Sale 24 tires @ $61 each 6 tires @ $76 each 16 tires @ $83 each 14 tires @ $86 each 17 tires @ $83 eacharrow_forward
- Gallery Leather is using the following information to compute it's cost of goods sold: March - 1 - beginning inventory = 30 units @ $5 March - 3 - purchased 15 units @ $4 March - 9 - sold 25 units @ $8 What is the cost of goods sold for Gallery Leather assuming it uses LIFO?arrow_forwardFaithful Books has the following transactions in August related to merchandise inventory. Determine the cost of goods sold and ending merchandise inventory by preparing a perpetual inventory record using the specific identification method. Assume the following costing information for the books sold during the month: August 3: 10 books costing $18 each August 15: 4 books costing $18 each and 9 books costing $21each August 28: 2 books costing $21each and 2 books costing $28 each Aug. 1 Beginning merchandise inventory, 16 books @ $18 each Aug. 3 Sold 10 books @ $21 each Aug. 12 Purchased 12 books @ $21 each Aug. 15 Sold 13 books @ $21 each Aug. 20 Purchased 3 books @ $28 each Aug. 28 Sold 4 books @ $22 each Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the…arrow_forward1)Calculate the cost of goods available for sale and the number of units of ending inventory. 2)Assume blossom use FIFO periodic.Calculate the cost of ending inventory, cost of the goods sold,and gross profit. 3)prepared journal entries to record the July 10 purchase and the July 11 sales using FIFO periodic and FIFO perpetual. Assume both the sales and purchase were for casharrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning