Do not give answer in image 13. Given below is an extract from the income statements of Krag Co and its subsidiary Lag CoKrag CoLag Co$ 000$ 000RevenueCost of salesGross profit[120,000(70,000)50,000During the year ended 31 December 20X9 Krag Co sold goods which originally cost $10 000000 to Lag Co for $15 000 000 Lag Co still had one quarter of these goods in inventory at 31December 20X9. Lag Co still owed Krag Co $2 000 000 in respect of these goods.What is the figure for group cost of sales for the year?A [ ] $94 250B[]$93 000[]$93 750]$96 250[88,000(40,000)48,000

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Answered: Given below is an extract from the…

Given below is an extract from the income statements of Krag Co and its subsidiary Lag Co Lag Co $ 000 Revenue Cost of sales Gross profit Krag Co $ 000 120,000 (70,000) 50,000 88,000 (40,000) 48,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

See similar textbooks

Related questions

Q: At December 31, 2021, Monty Imports reported this information on its balance sheet. Accounts…

A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.The…

Q: The stockholders' equity section of Oriole Corporation appears below as of December 31, 2025. 8%…

A: In order to determine the earning per share, the earning available to common shareholders are…

Q: Required information APA-2 (Algo) Recording Passive Investments LO A-1 [The following information…

A: The acquisition of assets such as stocks, bonds, and derivatives with the goal to sell them for a…

Q: Yancey Productions is a film studio that uses a job-order costing system. The company's direct…

A: PREDETERMINED OVERHEAD RATEPredetermined rate means the indirect cost rate.Predetermined overhead…

Q: Stockholders of Blue Spruce Company, Ayayai Company, and Concord Company are considering alternative…

A: Balance sheet is the financial statement that records all the assets, liabilities and stockholders'…

Q: Golf Apparel has two classes of stock authorized: 4%, $10 par preferred, and $1 par value common.…

A: Preparation of Journal entries :DateAccount Titles and ExplanationDebitCreditJanuary 2Cash (120,000…

Q: An excerpt of Vandelay Industries financial statements shows the following account balances: Cash…

A: Cash flows of a company represent the movement of actual money in and out of the business,…

Q: Additional Information a. A $30,000 note payable is retired at its $30,000 carrying (book) value in…

Q: McBride and Associates employs two professional appraisers, each having a different specialty.…

A: PREDETERMINED OVERHEAD RATEPredetermined rate means an indirect cost rate.predetermined overhead…

Q: Record adjusting entries for depreciation for 2026. (List debit entry before credit entry. Credit…

A: Depreciation refers to an expense that is being charged on the value of assets over the remaining…

Q: Recording Entries for Long-Term Note Receivable: Effective Interest Method On January 1 of Year 1.…

A: A note receivable is a written agreement to pay a certain sum of money to another party on one or…

Q: ces Shadee Corporation expects to sell 630 sun shades in May and 420 in June. Each shade sells for…

A: A budgeted Income statement is prepared by using budgeted figures to find out the net profit or loss…

Q: Required information Use the following information for the Exercises below. (Algo) [The following…

A: The depreciation expense is charged on the fixed assets as reduction in the value of the fixed…

Q: Blossom Industries expects credit sales for January, February, and March to be $193,000, $259,700,…

A: It is a financial plan that estimates the amount and timing of cash inflows from various sources,…

Q: The account balances of Wildhorse Company at December 31, 2024, the end of the current year, show…

A: The allowance for doubtful accounts has normal credit balance. The allowance for doubtful accounts…

Q: Taylor Swift and Travis Kelce (married filing jointly) attended graduate school to improve their…

A: For qualifying students or parents who cover certain educational costs, the federal government…

Q: Lessing Toy and Hobby (LTH) Is a chain of hobby and craft stores in the Southeast. LTH operates…

A: The budgeted income statement outlines the expected financial performance based on various…

Q: cion t $29,120 19,760 13,000 $29.120 10,400 16,120

A: When Assets are exchange and the transaction has commercial substance, the new asset is recorded the…

Q: At the end of October, Elizabeth lamented the company's situation: in the middle of production of…

A: Sunk cost is the cost which is already incurred and cannot be recovered.Gross margin is the…

Q: Rooney Company produces a product that has a variable cost of $21 per unit and a sales price of $61…

A: The contribution margin is calculated as the difference between the sales and variable costs. The…

Q: Mean Beans, a local coffee shop, has the following assets on January 1, 2023. Mean Beans prepares…

A: Depreciation expense is an expense for which no cash was incurred. By charging depreciation expense…

Q: Journalize the following business transactions in general journal form. Identify each transaction by…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: Calculating and Using a Single Charging Rate The expected costs for the Maintenance Department of…

A: Under Traditional costing system, overheads are allocated to the products on some predetermined…

Q: Interest payable........ Income taxes payable. 25 55 15 20 10 5 5 Required: Prepare the cash flows…

A: CASH FLOW STATEMENTCash flow statement Provides additional information to user of financial…

Q: The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given…

A: Cash Flow Statment is a financial statement that includes inflow and outflow of cash during the…

Q: Prepare an income statement for the year ended December 31 through the gross profit for Baxter…

A: Calculations of sales : Sales = 9,000 units * $130 = $1,170,000 Calculation of cost of good sold -…

Q: What is the market price of the shares after the stock dividend if the market reacts as expected?…

A: A stock dividend involves a company issuing additional shares to its shareholders, usually as a…

Q: 1. 2. 3. Cash 4. Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaid…

A: Balance sheet is a financial statement that shows the financial position of the entity by presenting…

Q: Allen Company has three departments - Lawn, Bush, and Plowing. Allen Company uses ABC for the…

A: Labor costs are an employer's total out-of-pocket expenditure for hiring employees. Due to the fact…

Q: A company applies overhead at a rate of 200% of direct labor cost. Actual overhead cost for the…

A: The overhead is applied to the production on the basis of the pre-determined overhead rate. The…

Q: The purchasing department buys the quantities of raw materials that are expected to be used in…

A: Variance analysis is the difference between budgeted and standard cost. The main advantage of…

Q: Prepare a cash distribution plan for the APB Partnership.

A: Liquidation is the process of winding up a partnership and distributing the asset. During the…

Q: The following expenditures and receipts are related to land, land improvements, and buildings…

A: Fixed assets are those assets which are held by the business for longer period of time, say more…

Q: On December 12, 2020, the furnace went out in the offices of Lambert & Sons Law Firm. They put in a…

A: Journal entries means the primary reporting of the business transactions in the books of accounts…

Q: Coronado Company reported the following amounts in the stockholders' equity section of its December…

A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…

Q: Drill 1: Ogar Donut Store allocates its manufacturing overhead based on estimated direct labor…

A: Predetermined Overhead Rate :— It is the rate used to allocate manufacturing overhead to cost…

Q: The Bradford Company issued 13% bonds, d. January 1, 2024 to Saxton-Bose Corporation

A: Bonds are debt securities or financial instruments issued by governments, businesses, or other…

Q: For the year just completed, Hanna Company had net income of $60,000. Balances in the company's…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: Riley Company began operations on August 1, 2026 and entered into the following transactions du ring…

A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.A…

Question

Do not give answer in image

13. Given below is an extract from the income statements of Krag Co and its subsidiary Lag Co
Krag Co
Lag Co
$ 000
$ 000
Revenue
Cost of sales
Gross profit
[
120,000
(70,000)
50,000
During the year ended 31 December 20X9 Krag Co sold goods which originally cost $10 000
000 to Lag Co for $15 000 000 Lag Co still had one quarter of these goods in inventory at 31
December 20X9. Lag Co still owed Krag Co $2 000 000 in respect of these goods.
What is the figure for group cost of sales for the year?
A [ ] $94 250
B
[
]
$93 000
[
]
$93 750
]
$96 250
[
88,000
(40,000)
48,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Consolidation:

VIEW

Step 2: Determine the group cost of sales for the year:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.
The following information is available for the McCartney Corporation: Sales $750,000Costs of goods sold $450,000Gross Profit $300,000Operating income $85,000Net income $42,000Inventory, beginning-year $71,200Inventory, end of year $48,800Calculate the company's inventory turnover and its days' sales in inventory.
Anthony Corporation reported the following amounts for the year: Net sales 296,000 Cost of goods sold 138,000 Average inventory 50,000 Anthony's gross profit ratio is: 53.4%. 51.9%. 50.3%. 46.6%. Anthony's average days in inventory is: 70 days. 114 days. 132 days. 151 days. A company's sales equal $60,000 and cost of goods sold equals $20,000. Its beginning inventory was $1,600 and its ending inventory is $2,400. The company's inventory turnover ratio equals: 5 times. 10 times. 20 times. 30 times. [Last question is in the picture attached]
2GFU Corporation has the following financial data for the years 20XX and 20XY: Sales Cost of goods sold Inventory 20XX $5,221,000 3,632,000 454,000 20XY $6,578,000 4,862,000 572,000 a. Compute inventory turnover based on sales for each year. (Round the final answer to 1 decimal place.) Inventory turnover ratio 20XX 20XY X X b. Compute inventory turnover based on cost of goods sold for each year. (Round the final answers to 1 decimal place.) 20XX 20XY Inventory turnover ratio X X c. This part of the question is not part of your Connect assignment.
evenue for the year amounted to R4 500 000 and represents net sales to third parties of goods purchased for resale. Rainbow Limited maintained a 40% gross profit percentage throughout the year. How much would be the cost of sales for Rainbow Limited? Select one: a. R7 500 000 b. R11 250 000 c. R2 700 000 d. R1 800 000
Can you explain how do we get COGS and Inventory? Exe Ltd sold supplies to Whi Ltd with a total sales value of $450,000. These sales were completed on terms of cost plus 20%. Whi Ltd had $65,000 of these supplies in inventory on hand as of 30 June 20X2. Date Account Debit $ Credit $ 30/6/X2 Sales 450,000 COGS 439,167 Inventory 10,833 (Elimination of intra-group sales revenue and COGS and elimination of URP in closing inventory) DTA 3,250 Income tax expense 3,250 (Recognition of the related income tax from consolidation adjustment to the carrying amount of inventory)
Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis ClarkInventory (beginning) $ 24,000 $ 50,000Inventory (ending) 18,000 60,000Purchases 261,000 235,000Purchase returns 15,000 60,000Required:1. Calculate cost of goods sold for each company.2. Calculate the inventory turnover ratio for each company.3. Calculate the average days in inventory for each company.4. Explain which company appears to be managing its inventory more efficiently.
If Happy Corporation has cost of goods sold of P300,000, sales of P600,000, and inventory of P30,000, then the inventory turnover is _________ and the average age of inventory is _________. (Assume a 360-day year) 20; 18 c 10; 20 10; 36 d. 20; 36
salamagundi, inc. has the following income statement: For the year ended December 31, 2021 net sales: $160 Cost of goods sold: $100 gross profit: $60 Operating expenses: $40 Net income: $20 Using vertical analysis, what percentage is assigned to operating expenses? a. 25% b. 40% c. 66.7% d. 200%
Assume that the Acct 201 Co. has $1,000,000 in Sales ($600,000 on account; $400,000 for cash), Cost of merchandise sold of $100,000 and Operating expenses of $300,000. Acct 201's Gross profit is:
A partial list of a common-size percentage for ABC Co. Ltd is given. Details December Current year December Previous year % % Sales 100 100 Cost of goods sold ? ? Gross profit on sales 40 ? Operating expense and income tax 20 25 Net income 20 10 a) Determine the missing common-size percentages b) Compute the net income for the current year Notes: Previous year net income is $20,000 Sales of current year is 120% of previous sales
Perez Corporation has the following financial data for the years 20X1 and 20X2: Sales Cost of goods sold Inventory 20X1 20X2 20X1 $ 5,221,000 3,632,000 454,000 a. Compute the inventory turnover for each year using the formula Sales/Inventory. Note: Round your answers to 1 decimal place. Inventory Turnover Ratio times times 20X2 $ 6,578,000 4,862,000 572,000 b. Compute inventory turnover based on an alternative calculation that is used by many financial analysts, Cost of goods sold/Inventory, for each year. Note: Round your answers to 1 decimal place.