Exercise 9-9 (Static) Effects of inventory error LO 9-2If the ending inventory of a firm is overstated by $70,000, by how much and in what direction (overstated or understated) will the firm'soperating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect theeffects of the ending inventory error and determine the effect on cost of goods sold.)Operating incomeby

The gross margin is calculated as the sales revenue less cost of goods sold.Cost of goods sold =…

Exercise 9-9 (Static) Effects of inventory error LO 9-2 If the ending inventory of a firm is overstated by $70,000, by how much and in what direction (overstated or understated) will the firm operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the effects of the ending inventory error and determine the effect on cost of goods sold.) Operating income by

Exercise 9-9 (Static) Effects of inventory error LO 9-2 If the ending inventory of a firm is overstated by $70,000, by how much and in what direction (overstated or understated) will the firm operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the effects of the ending inventory error and determine the effect on cost of goods sold.) Operating income by

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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Exercise 9-03 X Your answer is incorrect. Try again. Whispering Company follows the practice of pricing its inventory at LCNRV, on an individual-item basis. Estimated Cost to Complete and Sell Cost Item No. Quantity per Unit Selling Price 1320 1,500 $3.55 $5.00 $1.78 1333 1,200 3.00 3.77 1.11 1426 1,100 5.00 5.55 1.55 1437 1,300 4.00 3.55 1.50 1510 1,000 2.50 3.61 1.55 1522 800 3.33 4.33 0.89 1573 3,300 2.00 2.78 1.33 1626 1,300 5.22 6.66 1.67 From the information above, determine the amount of Whispering Company inventory. The amount of Whispering Company's inventory 45,369
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Needing some help with this question.
If annually your company spends significantly more on inventory holding costs than order costs, it is likely that you are: 1. Ordering in quantities that are too large II. Carrying too much inventory I only O II only Both I and II Neither I nor II
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Problem 13-18 Multiple choice (IAA) 2. The gross profit method is not valid when Inventory values have not increased. The gross profit method assumes that The amount of gross profit is the same as in prior years. a Sales and cost of goods sold did not change. a. с. I The relationship between selling price and cost of goods sold is similar in prior years. There is substantial increase in the quantity of inventory. h There is substantial increase in the cost of inventory. c. The gross margin percentage changes significantly. d. All ending inventory is destroyed by fire а. с. 3 Which statement is not valid about the gross profit method? a. It may be used by auditors. b. It is an acceptable accounting procedure. c. It may be used for interim statements. d. It may be used for annual statements. 4. Which is not a basic assumption of the gross profit method? a. The beginning inventory plus net purchases equals total goods to be accounted for. b. Goods not sold must be on hand. c. The sales…