Exercise 5-17 (Algo) Analyzing inventory errors LO A2 Vibrant Company had $950,000 of sales in each of Year 1, Year 2. and Year 3, and it purchased merchandise costing $525,000 in each of those years. It also maintained a $250,000 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 $230,000 rather than the correct $250,000. M. 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.

Exercise 5-17 (Algo) Analyzing inventory errors LO A2 Vibrant Company had $950,000 of sales in each of Year 1, Year 2. and Year 3, and it purchased merchandise costing $525,000 in each of those years. It also maintained a $250,000 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 $230,000 rather than the correct $250,000. M. 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.

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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Brief Exercise 8-26 Your answer is incorrect. Try again. Riverbed Inc. had beginning inventory of $22,200 at cost and $28,300 at retail. Net purchases were $158,800 at cost and $203,000 at retail. Net markups were $10,200, net markdowns were $5,800, and sales were $193,000. Calculate the ending inventory at cost using the retail method. (Round intermediate calculation to 2 decimal places, e.g. 15.21% and the final answer to 0 decimal places, e.g. 5,275.) X Ending inventory $ SHOW LIST OF ACCOUNTS LINK TO TEXT 42700
Exercise 5-4A ( Algo ) Effect of inventory cost flow ( FIFO , LIFO , and weighted average ) on gross margin LO 5-1 [ The following information applies to the questions displayed below . ] The following information pertains to Mason Company for Year 2 : Beginning inventory 152 units @ $ 48 430 units @ $ 72 Units purchased Ending inventory consisted of 60 units . Mason sold 522 units at $ 144 each . All purchases and sales were made with cash . Operating expenses amounted to $ 4,050 . Exercise 5-4A ( Algo ) Part a Required a . Compute the gross margin for Mason Company using the following cost flow assumptions : ( 1 ) FIFO , ( 2 ) LIFO , and ( 3 ) weighted average . ( Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount . ) Gross Margin FIFO LIFO Weighted average
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Exercise 5-19 (Algo) Inventory turnover and days' sales in inventory LO A3 The following is information for Palmer Company. Year 3 $ 613,825 99,400 Cost of goods sold Ending inventory Year 2 $ 396,650 89,750 Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. From Year 2 to Year 3, did Palmer improve its (a) inventory turnover and (b) days' sales in inventory? Inventory turnover Days' sales in inventory Year 1 $361,300 94,500 Use the above information to compute inventory turnover for Year 2, and its days' sales in inventory at December 31, Year 2. Numerator / Denominator Inventory turnover Days' sales in inventory Use the above information to compute inventory turnover for Year 3, and its days' sales in inventory at December 31, Year 3. Numerator / Denominator Ratio < Prev 0 0 4 of 9 # Did Palmer improve its (a) inventory turnover from Year 2 to Year 3 and (b) days' sales in inventory from…
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Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Purchased 400 units @ $4 = Purchased 90 units $5 = $ 1,600 450 January 20 April 21 July 25 September 19 Purchased 250 units @ $7 = Purchased 60 units @ $9 = During the year, The Shirt Shop sold 650 T-shirts for $14 each. Exercise 5-5 (Algo) Part a Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount. Ending inventory FIFO $ LIFO 450 1,750 540 Weighted Average
Question 28 (of 34) Two different companies, Ripper and Berners, entered into the following inventory transactions during December. Both companies use a perpetual inventory system. December 3-Ripper Corporation sold inventory on account to Berners Corp. for $483,000, terms 1/10, n/30. This inventory originally cost Ripper $310,000. December Corp. inventory to Ripper Corporation for a credit of $3,700. Ripper this inventory to inventory at its original cost of$2,375. December 12 Berners Corp. paid Ripper Corporation for the amount owed. Required: a. Prepare the journal entries to record these transactions on the books of Ripper Corporation. (If no entry is required for a transactionlevent, select Journal Entry Required" in the first account field.) view transaction list view general journal Journal Entry Worksheet Record the entry for sale of inventory on account.
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Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Year 2 Year 1 $105,000 $126,000 Beginning Inventory Cost of goods purchased 840,000 882,000 Cost of goods available for sale 945,000 1,008,000 126,000 115,500 $819,000 $892,500 Ending inventory Cost of goods sold The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $16,800 2. Year 2 ending inventory was overstated by $8,400 Compute the correct cost of goods sold for both years. Year 1 Year 2 Cost of goods sold $ 802,200 $ 0