Alex Company owns 80 percen Company. During the year, Alex sold merchandise that cost $9,000 to Cairo for $15,000. At the end of the year, Cairo 's ending inventory included merchandise that was purchased from Alex for $3,000. What entry is required to eliminate the effect of ending inventory in the consolidation worksheet at the end of the year? COGS Beginning Inventory Ending Inventory Sales Credit $3,000 Debit $3,000 Debit $15,000

Alex Company owns 80 percen Company. During the year, Alex sold merchandise that cost $9,000 to Cairo for $15,000. At the end of the year, Cairo 's ending inventory included merchandise that was purchased from Alex for $3,000. What entry is required to eliminate the effect of ending inventory in the consolidation worksheet at the end of the year? COGS Beginning Inventory Ending Inventory Sales Credit $3,000 Debit $3,000 Debit $15,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 14RE: Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a...

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Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
Refer to the information for Morgan Inc. above. If Morgan uses a perpetual inventory system, what is the cost of ending inventory under FIFO at April 30? a. $32,500 b. $38,400 c. $63,600 d. $69,500
The unadjusted inventory balance of Conway Corp. is $800,000 on December 31, based on a physical inventory count. Several items must be considered before the inventory valuation is finalized. 1. On December 31, the physical inventory excluded $10,000 of merchandise inventory shipped f.o.b. destination to Conway Corp. from a vendor. The inventory arrived on January 5 of the following year. 2. On December 31, the physical inventory included $1,500 of merchandise held on consignment. The consignor is PackagingPlus Inc. 3. $75,000 of in-transit merchandise was shipped f.o.b. shipping point to a customer and was excluded from the physical inventory count. The merchandise was shipped on December 28 and is expected to arrive at the customer's site on December 31. 4. On December 31, the physical inventory excluded $25,000 of merchandise inventory held on consignment by a customer. Conway Corp. is the consignor. 5. Goods are in transit from a vendor to Conway Corp. on December 31. The invoice…
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Abacus Ltd undertook the following transactions during May 2022. Purchased $18,480 inventory; terms 1/10, n/30. May. 1 8 Returned $1,980 of the inventory purchased on May 1. 16 Sold inventory on credit for $8,745. Cost of the inventory sold was $5,700. Required: a) Prepare the journal entries to record the transactions using periodic inventory system. GST apply, and assuming that all the prices are GST inclusive. b) Prepare the journal entries to record the 8th and 16th transactions using perpetual inventory system. Ignore GST.
At December 31, the Selig Company has ending inventory with a historical cost of $633,000. Assume the company uses the FIFO perpetual inventory system. The net realizable value is $617,000. The normal profit on this inventory is $50,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used? Group of answer choices Debit Inventory for $34,000 and credit Cost of Goods Sold for $34,000. Debit Cost of Goods Sold for $16,000 and credit Inventory for $16,000. Debit Inventory for $16,000 and credit Cost of Goods Sold for $16,000. Debit Cost of Goods Sold for $34,000 and credit Inventory for $34,000.
Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending Inventory Information about the four major Items stocked for regular sale follows: ENDING INVENTORY , CURRENT YEAR Quantity on Hand 34 69 Unit Cot When Acquired (FIFO) $ 19 48 Net Realizable Value (Market) at Year-End $ 14 44 49 24 59 36 61 31 Required: 1. Compute the valuation that should be used for the current year ending Inventory using lower of cost or net realizable value applied on an Item-by-Item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the valuation that should be used for the current year ending Inventory using lower of cost or net realizable value applied on an item-by-item basis. Total Net Realizable…
Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending Inventory Information about the four major Items stocked for regular sale follows: ENDING INVENTORY, CURRENT YEAR Net Raaliable Quantity on Hand 34 69 49 Value (Market) at Year-End $ 14 Unit Cont When Acquired (FIFO) $ 19 Item 48 44 59 36 61 24 31 Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year?
Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Item ABUD A ENDING INVENTORY, CURRENT YEAR Quantity Unit Cost When on Hand Acquired (FIF0) Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Total Net tem Quantity Total Cost Realizable Value D Required 1 Required 2 Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. C D 31 31 66 46 21 $16 45 56 33 66 DE $…
Tetra Company purchased 2,100 units of Inventory that cost $2.50 each on January 1, Year 1. An additional 3,100 units of Inventory were purchased on January 12, Year 1 at a cost of $2.35 each. Tetra Company sold 4,100 units of Inventory on January 20, Year 1. Assuming that Tetra Company uses the perpetual Inventory method and a FIFO flow method, how would the entry to recognize the cost of goods sold affect the financial statements? Multiple Choice O Increase Inventory and increase cost of goods sold by $10,050 Increase cost of goods sold and decrease Inventory by $9.950 Increase Inventory and Increase cost goods sold by $9,950 Decrease cost of goods sold and increase Inventory by $10,050
The unadjusted inventory balance of Conway Corp. is $800,000 on December 31, based on a physical inventory count. Several items must be considered before the inventory valuation 1. On December 31, the physical inventory excluded $ 10,000 of merchandise inventory shipped f.o.b. destination to Conway Corp. from a vendor. The inventory arrived on January 50 2. On December 31, the physical inventory included $1,500 of merchandise held on consignment. The consignor is Packaging Plus Inc. 3. $75,000 of in-transit merchandise was shipped f.o b. shipping point to a customer and was excluded from the physical inventory count. The merchandise was shipped on December 4. On December 31, the physical inventory excluded $25,000 of merchandise inventory held on consignment by a customer. Conway Corp. is the consignor. 5. Goods are in transit from a vendor to Conway Corp. on December 31. The invoice cost was $40,000 and the goods were shipped f.o.b. shipping point on December 26. The merchan…