An executive in a merchandising company receives an annual bonus equal to 5% of net income. Historically the company has calculated cost of goods sold and ending inventory using lifo and has maintained 30000 units in inventory for the last 10 years. In what ways would a reduction in inventory help the company

Q: ion apparel reported $100 000 000 in revenues over the last year. On average, over the same year the…

A:

Q: In its first month of operation, Wildhorse Company purchased 180 units of inventory for $7, then 280…

A: Step 1: Phantom profit is the apparent profit that seems to be made by the company. But this is not…

Q: In its first month of operation, Concord Corporation purchased 310 units of inventory for $11, then…

A: LIFO: LIFO stands for Last-In, First-Out. As its name suggest, this method assumes that the most…

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: Current Attempt in Progress At the beginning of the year, Blue Spruce Shipping Ltd., a company that…

A: Cost of goods available for sale is the sum of beginning inventory, value of purchases and freight…

Q: You have recently been hired as the CFO of an organization that changes it's inventory costing…

A: The chief executive officer (CEO), who holds the top position in an organization, is in charge of…

Q: Prepare the cash budget with the projected income statement of ABC Company from March to June

A: Cost of Goods Sold = 100000 Gross Profit = 20% Based on Sales Sales = 20% i.e 1/5 on Sales i.e. 1/4…

Q: At the end of January, Higgins Data Systems had an inventory of 710 units, which cost $15 per unit…

A: LIFOLIFO stands for last in, first out. LIFO is an inventory accounting method where it is assumed…

Q: A recent annual report of Gateway $2000 , Inc. , shows : cost of goods sold. $4,072; inventory at…

A: Operating cycle is the number of days required to receive Inventory, sale of Inventory and…

Q: Urban Technology began the year with inventory of $320,000 and purchased $1,800,000 of goods during…

A: Cost of goods available for sale = Beginning inventory + Purchases

Q: SuperDuper Company sells top of the line skateboards. SuperDuper is concerned about maintaining high…

A: The question requires usage of FIFO, LIFO and Weighted Average in calculating the cost of goods sold

Q: A company wishes to improve efficiency and have 28 days in inventory. If COGS is forecasted as…

A: The average inventory amount can be found by using the inventory turnover ratio where the cost of…

Q: Jacob’s Landing Inc. has sales of 2,000 for the first quarter of 2019.  The company incurred the…

A: Through CVP analysis, the corporation studies the income statement with the cost prospective where…

Q: Midwest Charm, Inc. specializes in selling scented farm equipment. The company has established a…

A: EOQ=2×Annual demand×Ordering costCarrying cost=2×660×$2,52535%×$15,000=25 units

Q: 1. Assume the company does not expect to replace the units of beginning inventory sold; it plans to…

A: LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the…

Q: A company adopted the LIFO method when its inventory was $1,800. One year later its ending inventory…

A: Value of inventory: One Year Later Value of ending inventory = ($ 1,800 X 1.00) + ($ 200 X 1.05)…

Q: Wayne's Wells has sales for the year of P48,900 and an average inventory 21 of P8,800. The cost of…

A: Days Sales Inventory = 365* Average Inventory/ Cost of goods sold

Q: Sequoia Co. is evaluating its inventory, computer paper, at the end of the period. The cost of each…

A: The ending inventory represents the unsold items. The inventory is recorded at cost. Sometimes the…

Q: Baird Company, which sells electric razors, had $330,000 of cost of goods sold during the month of…

A: The budgeted purchases for a period mean the estimated amount of inventory to be purchased during…

Q: Sim-Jo-La Electronics sells a variety of electronic devices including a variety of WIFI SMART camera…

A: Cost of Product= $450 Monthly Demand = 5000 units Annual demand (U)= 5000 units* 12 mounts= 60,000…

Q: Johnson Corporation began the year with inventory of 15,000 units of its only product. The units…

A: What are inventories? It is also known as a stock which is the unsold units of the company at the…

Q: Please need help with this question

A: Step 01: Calculating the Cost of Goods Sold (COGS): Gross Profit = Sales - Cost of Goods Sold Sales…

Q: Please give me answer

A: Step 1: Introduction to the Ending Finished GoodsGoods can be defined as the finished products…

Q: Salon Hair is a retail chain specializing in salon-quality hair-care products. During the year,…

A: Income statement is a financial statement that shows profitability, total revenue and total…

Q: Watsontown Yacht Sales has been selling large power cruisers for 25 years. On January 1, 20X1, the…

A: Given, Opening inventory = $5,950,000. Closing inventory = 7% higher than Opening inventory. Cost of…

Q: The owner of a large machine shop has just finished its financial analysis from the prior fiscal…

A: Interpretation:The machine shop has an inventory turnover ratio of 2.8. This means they sell and…

Q: Gigasales Department Store Income Statement For the Year Ended December 31, 2022…

A: Sensitivity analysis factors many elements to estimate the possible outcome or the net income…

Q: The following information for Dorado Corporation relates to the three-month period ending September…

A: 1. Cost of goods sold (LIFO) = 400,000 units purchased at $24 each + 25,000 units from beginning…

Q: Happy Valley Homecare Suppliers, Incorporated (HVHS), had $11.7 million in sales in 2015. Its cost…

A: a)Inventory days Outstanding refers to number of days the company holds Inventory before it is sold…

Q: At the end of January, Mineral Labs had an inventory of 905 units, which cost $13 per unit to…

A: Under the LIFO method, the inventory which has been purchased most recently is sold first and under…

Q: In its first month of operation, Vaughn Manufacturing purchased 320 units of inventory for $8, then…

A: FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the…

Q: esc Wildhorse Inc. had a bad year in 2021. For the first time in its history, it operated at a loss.…

A: Break-even point (BEP) can be referred to as that point of sales where the entity is able to recover…

Q: Earnings and Expenses (Year Ending January 2012) $100,000,000 $85,000,000 $10,300,000 Sales Cost of…

A: This question falls under the category of accounting and finance. Specifically, it involves…

Q: The home office ships merchandise to the branch at 25 percent above cost. If the balance before…

A: Particulars   Amount Inter-company inventory profit before closing   66,000  Less: Inter-company…

Q: Seacrest Corporation sells sailboats and has an inventory turnover ratio of 2.18 times per year…

A: Return on Assets is calculated by dividing the operating income by the average total assets. It…

Q: TS Quilts Inc. took a physical inventory at the end of the year and determined that $414,000 of…

A: Inventory refers to the goods, raw materials, work-in-progress, or finished products that a company…

Q: Pharoah Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The…

A: Break even refers to the situation when there is no loss or no profit or at this point the total…

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.