During 2017, Shamrock Inc. changed from LIFO to FIFO inventory pricing. Shamrock began operations in 2015 and its pretax incomein 2016 and 2015 under LIFO was $ 440,000 and $ 522,000, respectively. Pretax income using FIFO pricing in the prior years wouldhave been $ 474,000 in 2015 and $ 576,000 in 2016. In 2017, Shamrock reported pretax income using FIFO pricing of $ 539,000.Show comparative income statements for Shamrock beginning with "Income before income tax," as presented in the 2017 incomestatement. The tax rate for all years is 30%.201720162015Income before income tax$Income taxNet Income$%24%24

Under LIFO method of Inventory costing, the costs of the most recent products purchased are sold at…

Answered: During 2017, Shamrock Inc. changed from…

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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In its May 31, 2017, annual report, Beyonce Ltd. (Beyonce) reported that it had an inventory of $175,000 and accounts payable of $104,000 on May 31, 2016, and inventory of $196,000 and accounts payable of $122,000 on May 31, 2017. Beyonce's income statement for the year ended May 31, 2017, reported the cost of goods sold of $1,220,000. Required: Calculate the amount of cash that Beyonce paid to suppliers for purchases of inventory during fiscal 2017. Assume that accounts payable pertain only to the purchase of inventory on credit.
Jackson Company adopted Dollar Value LIFO (DVL) on January 1, 2012 for its one inventory pool. The inventory's value on this date was $500,000. The 2012, 2013 and 2014 ending inventory valued at year-end costs (Dec. 31st) were $556,500, $596,200, and $604,900 respectively. The appropriate cost indices at year end are 1.05 for 2012, 1.10 for 2013 and 1.15 for 2014.a. Determine the ending inventory value to be reported on Jackson's balance sheet at December 31, 2014 using DVL. $ [blank_1] QUESTION 6 USING THE INFORMATION PRESENTED IN #5 ABOVE, ANSWER THE FOLLOWING: If Purchases during 2014 were $1,150,000, determine COGS for the year ended December 31, 2014: $ [blank_2
During 2017, Teal Mountain Inc. changed from LIFO to FIFO inventory pricing. Teal Mountain began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $470,000 and $562,000, respectively. Pretax income using FIFO pricing in the prior years would have been $504,000 in 2015 and $615,000 in 2016. In 2017, Teal Mountain reported pretax income using FIFO pricing of $577,000. Show comparative income statements for Teal Mountain beginning with “Income before income tax,” as presented in the 2017 income statement. The tax rate for all years is 30%. 2017 2016 2015 Income before income tax $enter a dollar amount $enter a dollar amount $enter a dollar amount Income tax enter a dollar amount enter a dollar amount enter a dollar amount Net Income $enter a total amount $enter a total amount $enter a total amount
For the wholesale division, Devin uses the dollar value LIFO method of inventory. The base year established for LIFO is 2014. The inventory at the end of 2014 was calculated as $1,040,500. For the next 3 years you have the following information: 2015 2016 2017 Ending inventory counted at cost 1,085,000 1,091,000 1,398,000 Price level increase from 2014 3% 5% 10 % Net Purchases $2,935,000 Net Sales $5,456,000 Required for the retail division: 1. Calculate the ending inventory to be reported on the balance sheet for each of the three years. 2. Calculate the cost of goods sold and the gross margin for 2016.
The following information is available for Sandhill Co. for three recent fiscal years. 2017 2016 2015 Inventory $562,019 $571,288 $327,592 Net sales 1,955,632 1,697,750 1,304,721 Cost of goods sold 1,522,434 1,280,731 939,086 Calculate the inventory turnover, days in inventory, and gross profit rate for 2017 and 2016. (Round inventory turnover to 1 decimal place, e.g. 5.2, days in inventory to 0 decimal places, e.g. 125 and gross profit rate to 1 decimal place, e.g. 5.2%.) 2017 2016 Inventory Turnover times times Days in Inventory days days Gross Profit Rate % %
Romanoff Industries had the following inventory transactions occur during 2013: Units Cost/unit 2/1/13 Purchase 18 $45 3/14/13 Purchase 31 $47 5/1/13 Purchase 22 $49 The company sold 50 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? a. $1,106 b. $1,184 c. $2,316 d. $2,394
Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2016 decided to change to the FIFO method. The inventory as reported at the end of 2015 using LIFO would have been $20 million higher using FIFO. Retained earnings reported at the end of 2014 and 2015 was $240 million and $260 million, respectively (reflecting the LIFO method). Those amounts reflecting the FIFO method would have been $250 million and $272 million, respectively. 2015 net income reported at the end of 2015 was $28 million (LIFO method) but would have been $30 million using FIFO. After changing to FIFO, 2016 net income was $36 million. Dividends of $8 million were paid each year. The tax rate is 40%. Required: 1. Prepare the journal entry at the beginning of 2016 to record the change in accounting principle. 2. In the 2016–2015 comparative income statements, what will be the amounts of net income reported for 2015 and 2016? 3. Prepare the 2016–2015 retained earnings column of the…
Bravo Company's January 1, 2016 finished goods inventory was $100,000. The January 1, 2017 finished goods inventory is $80,000. Cost of goods manufactured for the FY 2016 was $260,000. Use this information to determine the dollar amount of the FY 2016 cost of goods sold.
During 2017, Windsor Inc. changed from LIFO to FIFO inventory pricing. Windsor began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $610,000 and $706,000, respectively. Pretax income using FIFO pricing in the prior years would have been $636,000 in 2015 and $762,000 in 2016. In 2017, Windsor reported pretax income using FIFO pricing of $731,000. Show comparative income statements for Windsor beginning with “Income before income tax,” as presented in the 2017 income statement. The tax rate for all years is 30%. 2017 2016 2015 Income before income tax $enter a dollar amount $enter a dollar amount $enter a dollar amount Income tax enter a dollar amount enter a dollar amount enter a dollar amount Net Income $enter a total amount $enter a total amount

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