On January 1, 2021, Displays Incorporated had the following account balances:AccountsCashAccounts receivableSuppliesInventoryLandAccounts payableNotes payable (78, due next year).Common stockRetained earningsTotalsYear-end adjusting entries:From January 1 to December 31, the following summary transactions occurred:a. Purchased inventory on account for $340,000.b. Sold inventory on account for $620,000. The cost of the inventory sold was $320,000.Requirementc. Received $576,000 from customers on accounts receivable.d. Paid freight on inventory received, $34,000.e. Paid $330,000 to inventory suppliers on accounts payable of $338,000. The difference reflects purchase discounts of$8,000.f. Paid rent for the current year, $52,000. The payment was recorded to Rent Expense.g. Paid salaries for the current year, $160,000. The payment was recorded to Salaries Expense.a. Supplies on hand at the end of the year are $9,000.b. Accrued interest expense on notes payable for the year.c. Accrued income taxes at the end of December are $28,000.GeneralJournalLIFO reserve is:Debit$ 32,000GeneralLedger29,00035,00065,000237,000$ 38,00030,000196,000134,000$398,000 $398,000Trial BalanceEnding inventory using dollar-value LIFOCredit1. Inventory turnover ratio2. Average days in inventory3. Gross profit ratioAnswer is complete but not entirely correct.Using the information from the requirements above, complete the 'Analysis'. (Calculate the ratios to the nearest 1 decimal.place.)IncomeStatementAnalyze the following for Displays Incorporated:(a) Suppose Displays Incorporated decided to maintain its internal records using FIFO but to use LIFO for extemal reporting.Assuming the ending balance of inventory under LIFO would have been $100,000, calculate the LIFO reserve..

Name: On January 1, 2021, Displays Incorporated had the following account b
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Description: On January 1, 2021, Displays Incorporated had the following account balances:AccountsCashAccounts receivableSuppliesInventoryLandAccounts payableNotes payable (78, due next year).Common stockRetained earningsTotalsYear-end adjusting entries:From Jan

Given in the question: Inventory at beginning of the year = $16,000 Cost index at the beginning of…

Business

Accounting

(b) Assume Displays Incorporated $65,000 beginning balance of inventory comes from the base year with a cost index of 1.00. The cost index at the end of 2021 of 1.2. Calculate the amount the company would report for inventory using dollar-value LIFO Ending inventory using dollar-value LIFO: $ 120,200

(b) Assume Displays Incorporated $65,000 beginning balance of inventory comes from the base year with a cost index of 1.00. The cost index at the end of 2021 of 1.2. Calculate the amount the company would report for inventory using dollar-value LIFO Ending inventory using dollar-value LIFO: $ 120,200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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