MYLAB (24 MONTHS) (FIN)
7th Edition
ISBN: 9780136505204
Author: MILLER-NOBLES
Publisher: PEARSON
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The Soap Manufacturing Company has three employees who work in the warehouse. All of the warehouse workers are authorized to order inventory when it falls below the reorder level. The workers complete a purchase order and mail it to the supplier of their choice. The inventory is delivered directly to the warehouse. The workers send a memo to accounts payable reporting the receipt of inventory. Accounts payable compares the warehouse memo to the supplier’s invoice. Accounts payable prepares a check which the treasurer signs.
a Based on your point of view, discuss FIVE (5) internal controls that being needed for improvements to the Soap Manufacturing Company.
b. Discuss the documents related to the purchasing cycle in above case study.
The Soap Manufacturing Company has three employees who work in the warehouse. All of the warehouse workers are authorized to order inventory when it falls below the reorder level. The workers complete a purchase order and mail it to the supplier of their choice. The inventory is delivered directly to the warehouse. The workers send a memo to accounts payable clerk, reporting the receipt of inventory.
Accounts payable clerk, compares the warehouse memo to the supplier’s invoice. Accounts payable clerk, prepares a check which the treasurer signature.
What internal control improvements needed on this set up? Discribe at least 5 or more.
(Inventoriable Goods and Costs) You are asked to travel to Milwaukee to observe and verify the inventory of the Milwaukee branch of one of your clients. You arrive on Thursday, December 30, and find that the inventory procedures have just been started. You spot a railway car on the sidetrack at the unloading door and ask the warehouse superintendent, Buck Rogers, how he plans to inventory the contents of the car. He responds, “We are not going to include the contents in the inventory.”Later in the day, you ask the bookkeeper for the invoice on the carload and the related freight bill. The invoice lists the various items, prices, and extensions of the goods in the car. You note that the carload was shipped December 24 from Albuquerque, f.o.b. Albuquerque, and that the total invoice price of the goods in the car was $35,300. The freight bill called for a payment of $1,500. Terms were net 30 days. The bookkeeper affirms the fact that this invoice is to be held for recording in…
Chapter 6 Solutions
MYLAB (24 MONTHS) (FIN)
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
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- ABC Company is using the inventory system managed by the vendor. The product is owned and managed by the vendor until it is delivered from ABC's distribution center to the stores. What do you think will be the problems that ABC will encounter in its purchases and payments process?arrow_forwardSpeeDIY Sdn. Bhd. is an online Do-It-Yourself (DIY) store located in Sintok that provides home delivery of DIY products purchased via the Internet. SpeeDIY uses a fully integrated accounting system and practices automated Economic Order Quantity (EOQ) model in managing its inventory. For each registered item in the inventory database, the system specifies quantity on hand and a desired quantity on hand. When the quantity on hand falls below the desired quantity on hand, a notification automatically pops up on the purchasing clerk's computer screen, alerting the clerk to reorder the item. The purchasing clerk can proceed with the reordering of items simply by checking the acceptance box. When the acceptance box is checked, the purchase order transaction file is created. In addition, the vendor is notified electronically through a transmission from the purchasing system. The purchasing clerk prepares a purchase summary report to his manager at the end of the day. SpeeDIY warehouse has…arrow_forwardSpeeDIY Sdn. Bhd. is an online Do-It-Yourself (DIY) store located in Sintok that provides home delivery of DIY products purchased via the Internet. SpeeDIY uses a fully integrated accounting system and practices automated Economic Order Quantity (EOQ) model in managing its inventory. For each registered item in the inventory database, the system specifies quantity on hand and a desired quantity on hand. When the quantity on hand falls below the desired quantity on hand, a notification automatically pops up on the purchasing clerk's computer screen, alerting the clerk to reorder the item. The purchasing clerk can proceed with the reordering of items simply by checking the acceptance box. When the acceptance box is checked, the purchase order transaction file is created. In addition, the vendor is notified electronically through a transmission from the purchasing system. The purchasing clerk prepares a purchase summary report to his manager at the end of the day. SpeeDIY warehouse has…arrow_forward
- In connection with your examination of the financial statements of Camry Products Co, a limited liability company, for the year ended 31 March 20X9, you are reviewing the plans for a physical inventory count at the company's warehouse on 31 March 20X9. The company assembles domestic appliances, and inventory of finished appliances, unassembled parts and sundry inventory are stored in the warehouse which is adjacent to the company's assembly plant. The plant will continue to produce goods during the inventory count until 5pm on 31 March 20X9. On 30 March 20X9, the warehouse staff will deliver the estimated quantities of unassembled parts and sundry inventory which will be required for production for 31 March 20X9; however, emergency requisitions by the factory will be filled on 31 March. During the inventory count, the warehouse staff will continue to receive parts and sundry inventory, and to dispatch finished appliances. Appliances which are completed on 31 March 20X9 will remain in…arrow_forwardThe Soap Manufacturing Company has three employees who work in the warehouse. All of the warehouse workers are authorized to order inventory when it falls below the reorder level. The workers complete a purchase order and mail it to the supplier of their choice. The inventory is delivered directly to the warehouse. The workers send a memo to accounts payable reporting the receipt of inventory. Accounts payable compar es the warehouse memo to the supplier’s invoice. Accounts payable prepares a check which the treasurer signs. a)Based on your point of view, d iscuss FIVE (5) internal controls that being needed for improvements to the Soap Manufacturing Company. b)Discuss the documents related to the purchasing cycle in above case study.arrow_forwardYou are comparing two companies, Ying Ltd and Yang Corporation, in the same industry. Ying focuses on revenue expenditure and uses the periodic inventory system. Yang focuses on capital expenditure and uses the perpetual inventory system. Discuss the difference between the company’s expenditure focus and state the two reasons each company will take a physical inventory use their respective systems.arrow_forward
- Cem's Company sells custom-order paintings made with watercolor pastels and recycled canvases. Cem's company is located in Nashville, TN. Following is partial information for the income statement of Cem's Company under three different inventory costing methods, assuming the use of a periodic inventory system Required: 1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 2. Prepare an income statement through pretax income for each method. Sales, 150 units; unit sales price, $50, Expenses, $1,500 3. Rank the three methods in order of preference based on income taxes paid (favorable cash flow) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Average Cost Cost of goods sald Beginning inventory O50 units @530) Purchases (150 units @129) Goods available for sale Ending inventory (560 units) Cost of goods…arrow_forwardSamson Company provided you with the following information: Items counted in the warehouse.. P 4,000,000 Items included in the count specifically segregated per sale contract with a customer • Items in the receiving department, returned by a customer, in good condition.. Items ordered and in the receiving department.. Items ordered, invoice received but goods not received, freight is on account of seller... Items shipped today, invoice mailed to customer, FOB shipping point.. Items shipped today, invoice mailed, FOB destination... Items currently being used for window display.. 100,000 50,000 400,000 300,000 250,000 150,000 200,000 800,000 Items on the counters for sale... • Damaged items returned, refused by receiving department 180,000 • Items included in the count, damaged and unsalable. • Items in the shipping department ready for delivery... What is the correct amount of inventory? 50,000 250,000 A. P5,700,000 В. Р6,000,000 С. Р 5,800,000 D. P5,150,000arrow_forwardMurphy Hardware bought 800 3-cubic-feet bags of organic peat moss from Mitchell Garden Distributors on account. Each bag cost $6.25. Murphy paid Reed Trucking $275 to have the bags of peat moss shipped to its warehouse. Murphy returned 20 bags that were defective and paid for the remainder. Murphy uses the perpetual inventory system. 1. Prepare the journal entry to record the purchase of 800 bags of peat moss. 2. Prepare the journal entry to record the payment of freight. 3. Prepare the journal entry to record the return of 20 defective bags. 4. Prepare the journal entry to record payment for the purchase. No discount was offered.arrow_forward
- MusicPlace specializes in sound equipment. Company records indicate the following data for a line of speakers (Click the icon to view the data) Read the requirements Requirement 1. Determine the amounts that MusicPlace should report for cost of goods sold and ending inventory two ways: a. FIFO and b. LIFO (MusicPlace uses a perpetual inventory system.) Start by determining the amounts that MusicPlace should report for cost of goods sold and ending inventory under a FIFO FIFO method cost of goods sold FIFO method ending inventory Determinie the amounts that MusicPlace should report for cost of goods sold and ending inventory under b. LIFO. LIFO method cost of goods sold LIFO method ending inventory Requirement 2. MusicPlace uses the FIFO method. Prepare the company's income statement for the month ended March 31, 2021, reporting gross profit. Operating expenses totaled $280, and the income tax rate was 40%. (Round answers to the nearest dollar) MusicPlace Income Statement Month Ended…arrow_forwardOzzy Opticals is a full-service optical store providing eye exams and eyeglasses to customers. To maintain a wide selection of inventory frames, Ozzy purchases the eyeglasses from various manufacturers under different FOB terms. For each of the scenarios, determine which party is responsible for the inventory. a. What is the significance of shipping terms? b. $1,500 in eyeglass frames were shipped FOB shipping point to Ozzy Opticals but were damaged in transit during a hurricane. Who is responsible for the inventory? c. $1,900 in eyeglass frames were shipped FOB destination to Ozzy Opticals but were lost in transit. Who is responsible for the inventory?arrow_forwardAllen Company is a wholesale distributor of automotive replacement parts. Initial amounts taken from Allen’s accounting records are as follows: Prepare a schedule of adjustments to the initial amount of inventory, accounts payable, and sales. Show the effect, if any, of each of the transactions separately and indicate if the transactions would have no effect on the amount.arrow_forward
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