he accounting records of DUB Co. showed these data for 2020: Inventory, January 1 P500,000 Purchases P2,500,000 Sales P3,200,000. A physical inventory taken on December 31, 2020 resulted in an ending inventory of P500,000. Gross profit on sales has remained constant at 25% in recent years. The company suspects some inventory may have been taken by a new employee. What is the estimated cost of missing inventory?

Q: Inventory Estimation (MODIFIED) During 2020, Reliable Hardware Store had the following selected…

A: Stock taking means where physical stock is calculated and compare it with stock as per book of…

Q: Carla Company’s accounting records indicated the following for 2020: Inventory, January 1

A: Solution: Estimated cost of missing inventory : Ending inventory = (Cost of goods available for sale…

Q: Berkshire Inc. uses a periodic inventory system. At the end of 2020, it missed counting some…

A: Periodic inventory system is an inventory system under which all purchase and sale of inventories…

Q: ABC Company's accounting records indicated the following information for 2020: Inventory, January 1…

A: Inventory is the stock of raw materials or finished goods held by a firm at a point of time.…

Q: Gecelle Company reported during the current year beginning inventory P500,000, net…

A: Cost of goods sold = Sales - Gross profit =P3,200,000 - P3,200,000 x 25% = P2,400,000

Q: Carla Company’s accounting records indicated the following for 2020: Inventory, January 1…

A: Gross income or profit can be defined as the difference between the sales revenue and the cost of…

Q: Errors were made in each year as follows: in 2020, ending inventory was overstated by $10,600 while…

A: The impact of errors of overstated ending inventory for 2021 profit and owner's equity is shown…

Q: Buster Corporation has the following items for the year ending December 31, 20XX. Retained earnings,…

A: Retained earnings: Every business earns net profit from which it can distribute to the investors or…

Q: The draft accounts of Collister Co. for the year ended 31st Dec 2020 include  the following: Revenue…

A: Cost of goods sold = Beginning inventory + purchases - ending inventory Gross profit = Sales - COGS

Q: Olivia Inc. presented the following data: Merchandise Inventory on January 1, 2020 - $ 550,000…

A: Cost of missing inventory = opening inventory +purchases-cost of sale - closing inventory as per…

Q: Over a four-year period, Jackie Corporation reported the following series of gross profits.…

A: Gross profit: It can be defined as the difference between the cost of goods sold and the net sales…

Q: (MODIFIED) During 2020, Reliable Hardware Store had the following selected accounts and balances:…

A: A. Computation of Inventory shrinkage (loss): Particulars Amount Opening inventory  P200,000…

Q: Bartleby Graduate Inc. was organized on January 1, 2020. On December 31, 2021, the company lost most…

A: Solution-1   Inventory January 1, 2020 P0 Add: Purchases P8,90,000 Less: Purchase return and…

Q: The records of Kaitlyn Corporation showed the following on December 31, 2020: Gross Purchases…

A: Solution..   Gross purchase = $380,000  Purchase return = $20,000  Gross profit = $420,000…

Q: Bilboa, Inc. bought $82,000 of inventory during 2020. During the year the company sold inventory for…

A: Gross Profit Gross profit is the sum of total sales revenue minus cost of goods sold.  The…

Q: Use the follwing information for questions 14 and 15 The following information was available for…

A: The inventory turnover ratio is used to figure out, how efficiently the inventory is managed.

Q: Malcolm Lee Industries reported the following amounts in its December 31st financial statements:…

A: Understated closing inventory decreases the amount of the current year’s profit whereas overstated…

Q: Santanina Company’s accounting records indicated the following for 2021: Inventory, January 1…

A: Gross Profit:

Q: Scruffy Brothers Supply does a physical inventory count when the business is closed at the end of…

A: Adjusting entries are made when the accounts are closed and after closing the account, any…

Q: Baldor Company reports inventory at cost of $72,000 and retail of $156,000 on January 1, 2020.…

A: Retail Method: This is a method used to determine the relationship between the cost price and the…

Q: 1. Lams Company's accounting records indicated the following information: Inventory, January 1…

A: Solution 1: Cost of goods sold = Sales - Gross profit = P6,400,000 - (P6,400,000*25%) = P4,800,000…

Q: After the auditors counted the inventory of Cracker Jack Manufacturing Co. and reviewed the…

A: Ending inventory is the stock of unfinished and semi-finished material of the company at the end of…

Q: Davenport Department Store converted from the conventional retail method to the LIFO retail method…

A: Since there are multiple sub questions, first 2 sub-questions are answered, Please re-post this…

Q: Sporting Pro wants to prepare interim financial statements for the first quarter of 2020 but would…

A: Estimated cost of goods sold = Net sales - gross profit = $1281200-1281200*47% = $679,036

Q: Tristan, Inc., uses the LIFO cost-flow assumption to value inventory. It began the current year with…

A: Particulars No. of units Rate per unit Total cost 9,500 units sold 8,000 $40 $320,000…

Q: On January 20, 2020, Stewart Company’s records revealed the following information: Inventory, July…

A: Inventory shows the current assets reported in the balance sheet.

Q: Richerfold Ltd had the following transactions and 2020: inventory valued at $3,500,000 as at…

A: Journal entry is a process of recording business transactions in the books of accounts for the first…

Q: Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b)…

A: In Overstated Inventory :— An adjustment entry for overstated inventory will add the omitted stock,…

Q: Bartleby Graduate Inc. was organized on January 1, 2020. On December 31, 2021, the company lost most…

A: 1. Gross profit Rate for 2020 = (Gross profit/ net sales) x 100 Gross profit = Net sales - cost of…

Q: Hawaii T-Shirt Company reported the following financial information for fiscal years 2019 and 2020.…

A: Formulas:

Q: .Your review of ABC Company's inventory and related records for the year revealed the following…

A: Gross profit ratio = Gross profit / Sales where, Gross profit = Sales - Cost of goods sold

Q: Crane Company sells TVs. The perpetual inventory was stated as $37,300 on the books at December 31,…

A: Given that the inventory balance on the books as on Dec 31, 2020 = $37,300 Cut-off procedures has to…

Q: The Cecil Booker Vending Company changed is method of valuing inventory from the average cost method…

A:

Q: Berkshire Inc. uses a periodic inventory system. At the end of 2020, it missed counting some…

A: Tax saved on understated inventory = understated inventory x tax rate = 600000 x 25% = $150,000

Q: At the end of the year, inventory has a cost of $200,000, net realizable value of $195,000,…

A: Financial transactions are initially recorded in the form of journal entry.

Q: Fuque Inc. uses the retail inventory method to estimate ending inventory for its monthly financial…

A: a.

Q: ABC Company experienced a decline in the value of its inventory in 2020 which resulted in a…

A: Inventory write-down refers to the accounting process to record decrease in value of the inventory…

Q: Lumen INC. is preparing its 2020 year-end financial statements. Prior to any adjustments, inventory…

A: Gross profit and ending inventory have a direct relationship i.e. increase (Overstated) in ending…

Q: Your review of Mine Company's inventory and related records for the year revealed the following…

A: Opening inventory (O) = 450000 Purchases (P) = 3150000 Sales = 4200000 Gross profit ratio = 30%…

Q: On January 15, 2020, a strong monsoon hit the country and destroyed all the inventory of Aeirron…

A: Gross profit is the profit earned by the company from their operating activities. It can be…

Q: On December 31, 2020, Roseland Company experienced a decline in the value of inventory resulting in…

A: Cost of goods sold means how much cost of goods has been sold in the outside market.  Cost of goods…

Q: On December 31, 2010, what is the estimated cost of missing inventory?

A: Net sales = Sales - sales discount - sales return = $3,400,000 -  20,000 - 30,000 = $3,350,000 Cost…

Q: The Quartz Company has been taking a physical inventory every quarter in order to prepare its…

A: 1.  The gross profit method can be used to estimate the ending inventory for 2021. In this method,…

Q: Dynamite Company’s accounting records indicated the following for 2020: • Inventory, January 1-…

A: Gross profit  ratio = Gross profit / Sales Gross profit = Sales - Cost of goods sold

Q: Life Goes On Inc. was organized on January 1, 2019. On December 31, 2020, the company lost most of…

A: Net sales in 2019 = sales - sales return = 788000-16000 = P772000 Cost of goods sold in 2019 =…

Q: On January 1, 2022, Roseland Company experienced a decline in the value of inventory resulting in…

A: In the context of the given question, we compute the required answers as follows: Direct write off…

Q: A company reported the net income of $58,000 for the year ending 2018. However, it was discovered…

A: Net income:Net income can be defined as the income reported at the bottom of the income statement of…

Q: acme company had the following records:                                               2022…

A: The average days in inventory is calculated as average inventory divided by cost of goods sold and…

Q: Lithowanderer Company used the retail method to estimate inventory. Data relating to the inventory…

A: Retail inventory method:  Under this method, the closing stock of inventory is measured using cost…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.