Included in the December 31, 2023, inventory of the Night Owl Supply Company are 2,800 deluxe ring binders in the amount of $8,488. An examination of the most recent acquisitions of binders showed the following costs: January 26, 2024, 2,400 at $3.05 each; December 6, 2023, 2,100 at $3.02 each; November 26, 2023, 2,600 at $2.78 each. What is the misstatement in valuation of the December 31, 2023, inventory for deluxe ring binders, assuming FIFO inventory valuation? What would your answer be if the January 26, 2024, acquisition was for 2,400 binders at $2.84 each? What is the misstatement in valuation of the December 31, 2023, inventory for deluxe ring binders, assuming FIFO inventory valuation? Using FIFO, the 12/31/23 inventory balance for deluxe ring binders should be 8,288 The ending inventory balance of $8,488 at 12/31/23 is overstated 200 The amount of the misstatement is What would your answer be if the January 26, 2024, acquisition was for 2,400 binders at $2.84 each? If the 1/26/24 acquisition was for 2,400 binders, the 12/31/23 inventory balance would be The ending inventory balance of $8,488 at 12/31/23 in this scenario is The amount of the misstatement in this scenario is

Included in the December 31, 2023, inventory of the Night Owl Supply Company are 2,800 deluxe ring binders in the amount of $8,488. An examination of the most recent acquisitions of binders showed the following costs: January 26, 2024, 2,400 at $3.05 each; December 6, 2023, 2,100 at $3.02 each; November 26, 2023, 2,600 at $2.78 each. What is the misstatement in valuation of the December 31, 2023, inventory for deluxe ring binders, assuming FIFO inventory valuation? What would your answer be if the January 26, 2024, acquisition was for 2,400 binders at $2.84 each? What is the misstatement in valuation of the December 31, 2023, inventory for deluxe ring binders, assuming FIFO inventory valuation? Using FIFO, the 12/31/23 inventory balance for deluxe ring binders should be 8,288 The ending inventory balance of $8,488 at 12/31/23 is overstated 200 The amount of the misstatement is What would your answer be if the January 26, 2024, acquisition was for 2,400 binders at $2.84 each? If the 1/26/24 acquisition was for 2,400 binders, the 12/31/23 inventory balance would be The ending inventory balance of $8,488 at 12/31/23 in this scenario is The amount of the misstatement in this scenario is

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...

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Cast Iron Grills, Incorporated, manufactures premium gas barbecue grills. The company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Cast Iron’s December 31, 2024, fiscal year-end inventory consisted of the following (listed in chronological order of acquisition): Units Unit Cost 6,200 $ 300 4,600 400 7,200 500 The replacement cost of the grills throughout 2025 was $600. Cast Iron sold 33,000 grills during 2025. The company's selling price is set at 200% of the current replacement cost. Required: 1. & 2. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2025 under two different assumptions. First, that Cast Iron purchased 34,000 units and, second, that Cast Iron purchased 18,000 units during the year. 4. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2025 assuming that Cast Iron purchased 34,000 units (as per the first assumption) and…
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Cast Iron Grills, Inc., manufactures premium gas barbecue grills. The company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Cast Iron’s December 31, 2021, fiscal year-end inventory consisted of the following (listed in chronological order of acquisition): Units Unit Cost 5,800 $ 300 4,400 400 6,800 500 The replacement cost of the grills throughout 2022 was $600. Cast Iron sold 31,000 grills during 2022. The company's selling price is set at 200% of the current replacement cost. Required:1. & 2. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2022 under two different assumptions. First, that Cast Iron purchased 32,000 units and, second, that Cast Iron purchased 17,000 units during the year.4. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2022 assuming that Cast Iron purchased 32,000 units (as per the first assumption)…
Bettencourt Clothing Corporation uses a periodic inventory system and the LIFO cost method. The company began 2024 with the following inventory layers (listed in chronological order of acquisition): 5,200 units @ $12 per unit 8,200 units @ $14 per unit Beginning inventory $ 62,400 114,800 $ 177,200 During 2024, 20,200 units were purchased for $16 per unit. Sales for the year totaled 30,400 units at various prices, leaving 3,200 units in ending inventory. Required: 1. Calculate cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements, assuming the amount is material. Assume an income tax rate of 25%. Cost of goods sold LIFO liquidation profit
Altira Corporation provides the following information related to its inventory during the month of August 2024: August 1 Inventory on hand-2,900 units; cost $7.00 each. August 8 Purchased 14,500 units for $6.40 each. August 14 Sold 11,600 units for $12.90 each. August 18 Purchased 8,700 units for $6.00 each. August 25 Sold 10,600 units for $11.90 each. August 28 Purchased 4,900 units for $5.80 each. August 31 Inventory on hand-8,800 units. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using last-in, first-out (LIFO). Cost of Goods Available for Sale Cost of Goods Sold - August 14 Cost of Goods Sold - August 25 Inventory Balance Perpetual LIFO: Number of units Cost per unit Cost of Goods Available for Sale Number of Cost Cost of units sold per unit Goods Sold Number of units sold Cost per unit Cost of Goods…
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Altira Corporation provides the following information related to its inventory during the month of August 2024: August 1 Inventory on hand—5,000 units; cost $6.80 each. August 8 Purchased 20,000 units for $7.00 each. August 14 Sold 15,000 units for $13.50 each. August 18 Purchased 15,000 units for $7.10 each. August 25 Sold 17,500 units for $12.50 each. August 28 Purchased 10,000 units for $7.30 each. August 31 Inventory on hand—17,500 units. Required: Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using each of the following cost flow methods. Determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using the FIFO method. Determine the inventory balance Altira would report in…
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Altira Corporation provides the following information related to its inventory during the month of August 2024: August 1 Inventory on hand—4,800 units; cost $6.70 each. August 8 Purchased 19,200 units for $6.90 each. August 14 Sold 14,400 units for $13.40 each. August 18 Purchased 14,400 units for $7.00 each. August 25 Sold 16,800 units for $12.40 each. August 28 Purchased 9,600 units for $7.20 each. August 31 Inventory on hand—16,800 units. Required: Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using each of the following cost flow methods (FIFO, LIFO, Average Cost)
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Altira Corporation provides the following information related to its inventory during the month of August 2024: August 1 Inventory on hand-2,600 units; cost $6.70 each. August 8 Purchased 13,000 units for $6.10 each. August 14 Sold 10,400 units for $12.60 each. August 18 Purchased 7,800 units for $5.60 each. August 25 Sold 9,400 units for $11.60 each. August 28 Purchased 4,600 units for $5.80 each. August 31 Inventory on hand-8,200 units. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using last-in, first-out (LIFO). Cost of Goods Available for Sale Cost of Goods Sold - August 14 Cost of Goods Sold - August 25 Inventory Balance Perpetual LIFO: Number of units Cost per unit Cost of Goods Available for Sale Number of units sold Cost per unit Cost of Goods Sold Number of units sold Cost per unit Cost of Goods…