Correct Answer CFT Corporation uses the cash basis of accounting. Duringthe year, CFT Corporation made $620,000 in payments toits suppliers. The company's beginning inventory was$30,000, and its ending inventory was $50,000.Additionally, CFT had a beginning accounts payable of$70,000 and an ending accounts payable of $90,000.What is CFT Corporation's Cost of Goods Sold (COGS)under the accrual basis of accounting?

Concept of Cost of Goods Sold (COGS)Cost of Goods Sold (COGS) represents the direct costs incurred…

Answered: CFT Corporation uses the cash basis of…

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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CFT corporation uses the cash basis of accounting?
The Simplex Company reported the cost of goods sold on its income statement of $10,000. The following account balances appeared on the company's comparative balance sheet for the same year: Data shows the ending and beginning balances of the accounts: Inventory $22,000 $20,000; Accounts Payable $14,000 $11,000 The company uses the indirect method to determine the net cash provided by operating activities. The cost of goods sold, adjusted to a cash basis, on the company's statement of cash flows for the year would be: a. $11,000 b. $10,000 c. $9,000 d. $5,000
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Stefan Company provided the following data for the current year, the first year of operations. a. Purchase of merchandise at an invoice price of $4,750,000 excluding freight. Terms are 2 /10, n /30. b. Freight paid, $250,000. The freight is allocated to each purchase. c. Cash payment on purchases, $3,717,000, of which $1,617,000 was paid within the discount period. d. It is expected that all discounts on unpaid accounts payable will be lost. e. On December 31, one fifth of the merchandise remains on hand. Requirement: 1. Prepare journal entries to record the transactions using gross method and net method. 2. Compute the inventory and cost of sales under each method.
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