Grand Department Store, Inc., uses the retail inventory method to estimate ending inventory for its monthlyfinancial statements. The following data pertain to a single department for the month of October 2016:Inventory, October 1, 2016:$ 20,000At costAt retail30,000Purchases (exclusive of freight and returns):At cost100,151146,495At retailFreight-inPurchase returns:5,100At cost2,1002,8002,500At retailAdditional markupsMarkup cancellationsMarkdowns (net)Normal spoilage and breakageSales2658004,500135,730Required:1. Using the conventional retail method, prepare a schedule computing estimated lower of cost and net realiz-able value inventory for October 31, 2016.2. A department store using the conventional retail inventory method estimates the cost of its ending inventoryas $29,000. An accurate physical count reveals only $22,000 of inventory at lower of cost and net realizablevalue. List the factors that may have caused the difference between computed inventory and the physicalcount.

Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Answered: Grand Department Store, Inc., uses the…

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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The records of a company showed the following for June: Sales 4,200 units at P200 each Purchases 4,000 units at P150 each Beginning inventory 6,000 units at P100 each Assuming the periodic inventory system is used, how much is the ending inventory using the weighted average method? is 480,000 corrrect?
Blossom, Inc. estimates the cost of its physical inventory at March 31 for use in interim financial statements. Blossom's rate of markup on cost is 25%. The following account balances are available at March 31: Inventory, March 1 Purchases Purchase returns Sales during March $548000 O $214000. O $400000. O $362800. O $232000. 428000 18000 744000 The estimate of the cost of inventory at March 31 would be
FIFO, LIFO and average cost method in periodic inventory system Okello Plc uses a periodic inventory system. The beginning balance of inventory and purchases made by the company during the month of July 2016 are given below: July 1: Beginning inventory, 500 units @ $20 per unit. July 18: Inventory purchased, 800 units @ $24 per unit. July 25: Inventory purchased, 700 units @ $26 per unit. The company sold 1,400 units during the month of July. Required: Compute inventory on July 31, 2016, and cost of goods sold for the month of July using following inventory costing methods: LIFO FIFO Average cos
In its first month of operations, Bramble Corp. made three purchases of merchandise in the following sequence: (1) 240 units at $4, (2) 340 units at $6, and (3) 440 units at $7. Assuming there are 140 units on hand at the end of the period, compute the cost of the ending inventory under (a) the FIFO method and (b) the LIFO method. Bramble Corp. uses a periodic inventory system. FIFO LIFO The Ending Inventory $Enter a dollar amount $Enter a dollar amount
The following information is available for Sandhill Co. for three recent fiscal years. 2017 2016 2015 Inventory $562,019 $571,288 $327,592 Net sales 1,955,632 1,697,750 1,304,721 Cost of goods sold 1,522,434 1,280,731 939,086 Calculate the inventory turnover, days in inventory, and gross profit rate for 2017 and 2016. (Round inventory turnover to 1 decimal place, e.g. 5.2, days in inventory to 0 decimal places, e.g. 125 and gross profit rate to 1 decimal place, e.g. 5.2%.) 2017 2016 Inventory Turnover times times Days in Inventory days days Gross Profit Rate % %
2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
Balamb Corporation had the following transactions for the month: Calculate the ending inventory dollar value for the period for each of the following cost allocation methods, using periodic inventory updating. Provide your calculations. first-in, first-out (FIFO) last-in, first-out (LIFO) weighted average
Monroe Manufacturing, Inc. reported the following information related to inventory, which sells for $20 per unit: Beginning inventory: 3,000 units at $3 unit cost Purchase 1: 4,000 units at $4 unit cost Purchase 2: 5,000 units at $5 unit cost At the end of the period, the company has 4,000 units in ending inventory. Compute the cost of goods sold and ending inventory using the following methods: Weighted Average, FIFO, and LIFO methods.
Using the selected year-end account balances at December 31, 2014, for Lifeline General Store that follow, prepare a multistep 2014 income statement. Show detail of net sales. The company uses the periodic inventory system. Beginning merchandise inventory was $28,000; ending merchandise inventory is $21,000. Account Name Debit CreditSales $309,000Sales Returns and Allowances $ 15,200Purchases 114,800Purchases Returns and Allowances 7,000Freight-In 5,600Selling Expenses…
Cobb Company's accounting records show the following at the year ending on December 31, 2015: Purchase Discounts $ 11,200 Freight In 15,600 - Purchases 402,000 Beginning Inventory Ending Inventory 47,000 57,600 Purchase Returns 12,800 Using the periodic system, the cost of goods sold is O a) $404,200. O b) $378,000. $393,600. O d) $383,000.
On January 1, 2015, the company had merchandise inventory of 50,000. On December 31, 2016, the company had the ff account balances: Freight In: 4,000 Purchases: 509,000 Purchase Discounts: 6,000 Purchase returns and allowances: 2000 Sales Revenue: 840,000 Sales Returns and Allowances: 10,000 Sales Discounts: 5000 The company determines an ending inventory of 60,000. Prepare the closing entries and compute the company's gross profit.
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