, During Year 8 and Year 9, Sage sold merchandise toPage at a price that provides it with a gross profit of50%. The Year 9 sale was $10,000. Page's December31, Year 9, inventory contained $2,000 remaining. TheDecember 31, Year 8, inventory of Page contained $1,000 The unsold amount would then be $1,000. Alsoduring Year 9, Page sold merchandise to Sage for $33,600. Paige prices its sales based on a 40% markupon cost. At year end, the portion remaining in Sageinventory was 50% Intercompany sales for the yeartotalled $50,000. At the end of Year 9, Page owedSage $500 for merchandise inventory purchased onaccount. This liability is non-interest bearing. Table ofrealized and unrealized intercompany inventory profitsand sales

The objective of the question is to calculate the realized and unrealized intercompany inventory…

Answered: , During Year 8 and Year 9, Sage sold…

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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Waterway Industries had January 1 inventory of $310000 when it adopted dollar-value LIFO. During the year, purchases were $1720000 and sales were $3040000. December 31 inventory at year-end prices was $377400, and the price index was 111.What is Waterway Industries’s gross profit
Bob's Clothing Shop's inventory at cost was $30,000 on January 1. Its retail value is $42,000. During the year, Bob's Clothing Shop purchased additional merchandise at a cost of $196,000 with a retail value of $368,000. The net sales at retail for the year were $310,000. Calculate Bob's ending inventory amount at cost by the retail method. (format as $1,234.56, if there are zero cents format as $1,234.00)
Whispering Winds Corporation uses a perpetual inventory system and had inventory worth $88,500 at the beginning of the year. Purchases were made during the year for $393,000; however, 10% of these goods were returned to the supplier, and a 3% discount was taken on the remaining balance owing. Whispering Winds paid $3,500 cash for freight to ship the inventory to its location during the year. Whispering Winds reported cost of goods sold for the year of $295,000. Whispering Winds has a calendar year end. What is the balance in the inventory account at the end of the year? Balance If Whispering Winds counted its actual inventory balance as $118,000 at the end of the year, what adjusting entry, if any, would be made? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and…
The home office bills its branch for shipment of goods at 25% above cost. During the year, goods costing P300,000 were shipped by the home office to the branch. At the end of the year, after appropriate adjustments are recognized, the allowance for overvaluation of branch inventory account credit balance was P14,000. The branch ending inventory at cost was:
Kwafja Ltd. made only three purchases of a particular item of merchandise during its first year of operation. Each purchase was for 100 units and the prices paid were $41 per unit in the first purchase, $42 per unit in the second purchase, and $46 per unit in the third purchase. The ending inventory consisted of 150 units. Under the first-in, first-out method, the value assigned to the ending inventory would be: O a) $6 200 Ob) $6 450 O c) $6 500 O d) $6 700
Alphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. It purchased A thru G in January at $5.00 per letter. In February, it purchased H thru L at $7.00 per letter. It purchased M thru R in March at $8.00 per letter. It sold A, D, E, H, J and N in October. There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the specific identification method, what is the cost of its ending inventory? Multiple Choice O O $81 $118 $36 $91
Vibrant Company had $1,040,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased merchandise costing $570,000 in each of those years. It also maintained a $340,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of Year 1 that caused its Year 1 ending inventory to appear on its statements as $320,000 rather than the correct $340,000. 1. Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3. 2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3. Cost of goods sold Cost of goods sold Gross profit Year 1 0 $ VIBRANT COMPANY Comparative Income Statements…
Traylor Corporation began the year with three items in beginning inventory, each costing $5. During the year Traylor purchased five more items at a cost of $6 each and then two more items at a cost of $7 each. Traylor sold eight items for $10 each. If Traylor uses a periodic LIFO system, what would be Traylor’s gross profit for this year? 45 $45 $80 $80 $51 $51 $36
At the beginning of the year, Snaplt had $10,000 of inventory. During the year, Snaplt purchased $35, 000 of merchandise and sold $30,000 of merchandise. A physical count of inventory at year-end shows $14,000 of inventory exists. Prepare the entry to record inventory shrinkage.
Bojangle Incorporated adopted the dollar-value LIFO method last year. Last year's ending inventory was $53,700. The ending inventory for the current year at year-end (FIFO) cost is $99,000 and on a dollar-value LIFO basis is $93,630. Based on this information, prepare the journal entry required to adjust Bojangle's ending inventory from FIFO to a dollar-value LIFO basis.
Iρngmire & Sons made sales On credit to Alderman Sports totaling $500,000 On April 18. The cost of the goods sold is $400,000. Longmire estimates 3% of its sales to Alderman may be returned. On May 22, $9 ,000 worth of goods (with a cost of $7,200) are returned by Alderman. Iρngmire uses a periodic inventory system. Prepare the related journal entries for Longmire & Sons.
On June 1, Delaware Co. had one unit in beginning inventory that cost $10.00. During June, Delaware paid cash to purchase two additional inventory items. Delaware purchased the first item for cash at a cost of $10.00, and the second at a cost of $12.00. Delaware Co. sold two inventory items for $24.00 each, receiving cash. Based on this information alone, indicate whether each of the following items is true or false. a) The amount of ending inventory will be $10 assuming the LIFO cost flow was used. b) Cost of goods sold would be $24 assuming the weighted average cost flow was used. c) Cash flow from operating activities in June would be $28 assuming a FIFO cost flow was used. d) Cash flow from operating activities in June would be $26 independent of what cost flow assumption was used. e) The amount of gross margin would be $26 assuming the FIFO cost flow was used.

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