Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 9, Problem 9.8E
Exercise 9.8
LO 2
Effects of inventory error Assume that the ending inventory of a merchandising firm is overstated by $20,000.
Required:
a.By how much and in what direction (overstated or understated) will the firm’s cost of goods sold be misstated?
h.
If this error is not corrected, what effect will it have on the subsequent period’s operating income?
c.If this error is not corrected, what effect will it have on the total operating income of the two periods (the period in which
there is an error and the subsequent period) combined?
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Question 9
(i) Periodic inventory system is less commonly used by companies due to:
A: the complexity in recording the sales and purchases of inventory.
B: the ban of the use by the accounting systems.
C: extra effort in performing the stock taking every month.
D: less updated information on inventory provided during the year.
(ii) Paul Company uses its periodic inventory system and you are given the following information:
Sales.... . . . . . . ........................................................$65,100
Inventory- Beginning...........................................$16,800
Inventory- Ending.... . . . . . . . . . . . . . . . . . . . .$14,700
Purchases... . . . . . . . . . . . . . . . . .................... . .$48,300
How much is the gross profit?
A: $14,700.
B: $50,400.
C: $48,300.
D: $65,100.
chapter 7
7.
Calculate the shortage percent. Present your answer with a percent sign, rounded to two decimal places (i.e. 19.64%).
NOTE. There are four questions associated with this data. You will ultimately complete a complete RIM exercise.
Cost ($)
Retail ($)
Opening inventory
130,410
201,543
Gross purchases
418,390
884,916
Returns to vendors
1,726
3,514
Cash discounts
2,040
Alteration costs
1,620
Freight
1,690
Gross Sales
806,430
Customer returns
60,340
Markdowns
120,630
Markdown cancellations
3,048
Additional markup
360
Employee discounts
1,010
Closing physical inventory
212,803
pvn.4
The following information pertains to inventory for a company:March 1Beginning inventory = 32 units @ $5.60March 3Purchased 21 units @ 4.30March 9Sold 29 units @ 8.10What is the cost of goods sold, assuming the company uses LIFO? (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)
Chapter 9 Solutions
Accounting: What the Numbers Mean
Ch. 9 - Prob. 9.1MECh. 9 - Mini-Exercise 9.2 LO 5 Calculate operating income...Ch. 9 - Mini-Exercise 9.3 LO 6 Calculate basic EPS Net...Ch. 9 - Mini-Exercise 9.4
LO 10
Calculate cash flows from...Ch. 9 - Exercise 9.5
LO 1
Calculate earned revenues Big...Ch. 9 - Exercise 9.6 LO 1 Calculate earned revenues...Ch. 9 - Exercise 9.7 LO 2 Effects of inventory error If...Ch. 9 - Exercise 9.8 LO 2 Effects of inventory error...Ch. 9 - Prob. 9.9ECh. 9 - Prob. 9.10E
Ch. 9 - Exercise 9.11 LO 5 Operating income versus net...Ch. 9 - Prob. 9.12ECh. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Prob. 9.18ECh. 9 - Problem 9.19 LO 5 Calculate operating income and...Ch. 9 - Prob. 9.20PCh. 9 - Problem 9.21
LO 3
Use gross profit ratio to...Ch. 9 - Prob. 9.22PCh. 9 - Prob. 9.23PCh. 9 - Problem 9.24
LO 10
Prepare a statement of cash...Ch. 9 - Problem 9.25
LO 10
Cash flows from operating,...Ch. 9 - Prob. 9.26PCh. 9 - Prob. 9.27PCh. 9 - Problem 9.28 LO 10. 11 Complete balance sheet and...Ch. 9 - Prob. 9.29PCh. 9 - Prob. 9.30PCh. 9 - Prob. 9.31CCh. 9 - Prob. 9.32CCh. 9 - Prob. 9.33C
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- Exercise 6-14 (Algo) Calculate inventory using lower of cost and net realizable value (LO6-6) [The following information applies to the questions displayed below.] A company like Golf USA that sells golf-related inventory typically will have inventory items such as golf clothing and golf equipment. As technology advances the design and performance of the next generation of drivers, the older models become less marketable and therefore decline in value. Suppose that in the current year, Ping (a manufacturer of golf clubs) introduces the MegaDriver II, the new and improved version of the MegaDriver. Below are year-end amounts related to Golf USA’s inventory. Inventory Quantity Unit Cost Unit NRV Shirts 38 $55 $73 MegaDriver 18 390 330 MegaDriver II 33 410 450 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardchapter 7 9. Calculate the maintained markup percent. Present your answer with a percent sign, rounded to two decimal places (i.e. 19.64%). (HINT: Page 196) NOTE. There are four questions associated with this data. You will ultimately complete a complete RIM exercise. Cost ($) Retail ($) Opening inventory 130,410 201,543 Gross purchases 418,390 884,916 Returns to vendors 1,726 3,514 Cash discounts 2,040 Alteration costs 1,620 Freight 1,690 Gross Sales 806,430 Customer returns 60,340 Markdowns 120,630 Markdown cancellations 3,048 Additional markup 360 Employee discounts 1,010 Closing physical inventory 212,803arrow_forwardA main goal of JIT is zero inventories. a. Assume your company does not aspire to JIT and has 3,000,000 in raw materials in stock. Identify costs that may be incurred to maintain the inventory level. b. Now assume that you implement JIT, and your raw materials in stock drop to zero. Explain how you expect this change to impact your income statement and balance sheet.arrow_forward
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