During the year 1 year-end physical inventory count at Tequesta Corporation, $40,000 worth of inventory was counted twice. Assuming that the year 2 year-end inventory was correct, the result of the year 1 error was that a. Year 1 retained earnings was understated, and year 2 ending inventory was correct. b. Year 1 cost of goods sold was overstated, and year 2 income was understated. c. Year 1 income was overstated, and year 2 ending inventory was overstated. d. Year 1 cost of goods sold was understated, and year 2 retained earnings was correct.

Q: Cullumber Company is concerned about the accuracy of its year-end inventory balance. Inventory shows…

A: FOB Destination - In this terms, the buyer becomes the owner of the inventory only when the goods…

Q: Lucia Company reported cos Beginning inventory Cost of goods purchas Cost of goods availab Ending…

A: Cost of goods sold is the total of all costs used to create a product or service, which has been…

Q: Hot Company had a beginning inventory for the period of $800,000. During the period it purchased…

A: The objective of the question is to calculate the inventory turnover ratio for Hot Company. The…

Q: ABC company started its operations this year and began with no inventory on hand. It provided the…

A: INVENTORY VALUATIONInventory Valuation is a Method of Calculation of Value of Inventory at the End…

Q: Suggest the correct amount of inventory as on the statement of financial position in (i) and (iii)…

A:

Q: An error in the physical count of goods on hand at the end of a period resulted in a $10200…

A: Cost of goods sold (COGS) refers to the cost including the costs which are directly related to the…

Q: During its first and second years of operations, Explorer Company, a corporation using a periodic…

A: Inventory is one of the current asset of the business, which is reported in the balance sheet of the…

Q: Massi pharmacies, Inc. started operations on January 1 2X11. The company used the average cost…

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

Q: If ending Inventory is overstated at the end of the year, profit will be: O Ovestated b) Understated…

A: Inventory valuation includes different methods that are used by companies to find out the value of…

Q: At 12/31/21, the end of Bell Company's first year of business, inventory was $158,800 and $157,900…

A: Lower of cost or net realisable value method record the inventory at lower of its cost or net…

Q: Ivanhoe Company uses the conventional retail method to determine its ending inventory at cost.…

A: The conventional retail method refers to the inventory valuation method which compares the purchase…

Q: An error in the physical count of goods on hand at the end of the current period resulted in a $3000…

A: Any understatement of  ending inventory results in decrease in net income. In Trading Account…

Q: 2 by reducing the reported ending inventory in both Year 1 and Year 2 by $77,000. Which of the…

A: Option A is the correct answer

Q: Smart Company prepared its annual financial statements dated December 31. The company reported its…

A: Ending inventory on LCM basis is the sum of individual items on lower of cost or NRV…

Q: he following information pertains to Hagen Metal Works' ending inventory for the current year. Unit…

A: Individual item method: Using the individual item method, the inventory is valued at a lower of cost…

Q: Candle Co. performs an inventory court at year - end. The company records a ending balance of…

A: Balance sheet:The balance sheet is drafted by the company to show the balance of the trial balance…

Q: A company's unadjusted balance in Inventory will usually not agree with the actual amount of…

A: The amount of goods and materials owned by a company at a particular time, including parts, products…

Q: A company has only one inventory pool. On December 31, Year 1, the company adopted the dollar-value…

A: The inventory can be valued using various methods as FIFO, LIFO and average method. LIFO methods…

Q: A company uses a periodic inventory system. Beginning inventory on January 1 was overstated by…

A: Cost of goods sold:The cost of goods sold is popularly known in short as the COGS which is the total…

Q: Part One: Explanation 1. If merchandise inventory is being valued at cost and the price level is…

A: FIFO, LIFO and weighted average are different cost flow assumptions with regard to the cost of…

Q: At 12/31/21, the end of Bell Company's first year of business, inventory was $158,800 and $157,900…

A: Inventory Valuation: Inventory is valued at a lower cost or net realizable value.

Q: Question: Considering the year-ending adjusting journal entries for the periodic inventory system.…

A: Formula: Cost of goods sold= opening inventory+purchases - closing inventory. Gross profit = sales -…

Q: Which of the following is correct when, in the same year, beginning inventory is overstated by…

A: The net income is calculated as difference between sales and total costs. Gross profit = Sales -…

Q: In taking a physical inventory at the end of Year 1, Grant Company forgot to count certain units and…

A: Year 1 cost of goods sold Increase by $17,500 Year 1 net income Decrease by $17,500 Year 2 cost…

Q: A firm recorded it's ending inventory for the previous year at $40,000. It realized at the end of…

A: Golden Rules of Accounting: Account Debit Credit Personal Accounts The Receiver The…

Q: Platinum Co. failed to record $72,000 credit purchase of goods that were received on the last day of…

A: Lets understand the basics. When any error is made in recording any expenses and error discovered in…

Q: For each of the independent events listed below, analyze the impact on the indicated items at the…

A: To adjust the financial statements for the events described, you would need to make the following…

Q: Based on its physical count of inventory in its warehouse at year-end, December 31 of the current…

A: Inventory refers to the goods and materials that a company holds for sale or production. These can…

Q: For each of the independent case, indicate the effect of the error, if any, on the accounts and the…

A: Inventory means the stock of goods in which the businessmen deals. Merchandise on hand means the…

Q: Massi pharmacies, Inc. started operations on January 1 2X11. The company used the average cost…

A:

Q: Jaffa Company prepared its annual financial statements dated December 31 of the current year. The…

A: A profit and loss statement, or P&L statement, is another name for an income statement. It is…

Q: ง c The records of Marigold Menswear report the following data for the month of September: Sales…

A: Retail method of inventory valuation is used to estimate store inventory, it measures the cost of…

Q: Ivanhoe uses the conventional retail method to determine its ending inventory at cost. Assume the…

A: Cost-to-Retail percentage = Goods available for sale at cost / Goods available for sale at retail…

Q: For each of the independent events listed below, analyze the impact on the indicated items at the…

A: To analyze the impact on assets at the end of the current year for each event, let's consider each…

Q: was overstated by $25000 at the beginning of the year (this was not corrected). What is the…

A: Net profits will be underestimated if beginning inventory is overstated. To rectify this we need to…

Q: During the taking of the physical inventory, the company inadvertently counted its inventory as…

A: Any increase in ending inventory decreases the cost of goods sold and profit will be increased. but…

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.