Please help me answer this question K. Co. uses LIFO inventory method. At the end of the 2006accounting period, the company reported $10,000 of netearnings on I/S. The inventory balance on the 2006 B/S is$7,000. In the footnotes, LIFO reserve at the end of 2006 is$3,000 and LIFO reserve at the end of 2005 is $2,500. JJ Co.uses FIFO and reported 10,300 of net earnings on the 2006I/S. Which company has a higher earnings if both of thecompanies would use the same inventory method?

Step 1: Define Inventory methodThe inventory method is to evaluate the inventory (raw material or…

Answered: K. Co. uses LIFO inventory method. At…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 67P

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Kante Company uses periodic FIFO for its internal report and periodic LIFO for its external reports. In its FIFO-based internal reports, Kante had a beginning inventory of $96,000, an ending inventory of $116,000, and a pretax income of $750,000. Under LIFO, Kante's beginning inventory would have been $78,000, and its ending inventory would have been $109,000. How much pretax income would Kante report in its external reports?
Assume that Merryland’s Markets had an inventory balance of $32 570 at the close of the last accounting period. The following sales and purchase transactions are for the current period. NOTE: GST at 10% is included in the amount where applicable. 1. 2. 3. 4. Purchased goods on account for $29,909. Returned part of the above purchase that had an original invoice price of $1,749. Paid for the balance of the purchase in time to receive a discount of 2% of the invoice price. Sold goods on account costing $24 900 for an invoice price of $54 802. Required (a) Prepare general journal entries assuming the perpetual inventory system is used. (b) Suppose that a physical count of the inventory at the end of the current period shows inventory of $30,420 to be on hand. Present the entries (if any) required to adjust for any discrepancy.
Sandhill Inc. reported inventory at the beginning of the current year of $440000 and at the end of the current year of $491000. If net sales for the current year are $4829200 and the corresponding cost of sales totaled $3724000, what is the inventory turnover for the current year? 10.37. 7.58. 9.84. 8.00.
In March 2015, XYZ Corp. purchased an item of inventory for $30. By June, that item could be purchased for $26 and re-sold for $31. XYZ's normal profit for the item is $4. At what amount should XYZ report the item in its June 30 balance sheet? XYZ uses the LIFO inventory cost flow assumption. (omit , and $ in the answer) 30
Hot Pepper Company had the following information in its accounting records at year end:Inventory Cost $4,000,000It estimates the net realizable value of this inventory is $3,500,000. As a result of this information Hot Pepper Co. would: Make a journal entry debiting a loss on inventory decline for $500,000 Make a journal entry debiting the allowance for inventory valuation for $500,000 Make a journal entry crediting the allowance for inventory valuation for $500,000 Make a journal entry debiting a gain on market appreciation for $500,000 Make no entry
Esquire Incorporated uses the LIFO method to report its inventory. Inventory at the beginning of the year was $768,000 (32,000 units at $24 each). During the year, 104,000 units were purchased, all at the same price of $27 per unit. 112,000 units were sold during the year. Calculate ending inventory and cost of goods sold at the end of the year based on a periodic inventory system. Beginning Inventory Purchases Total Cost of Goods Available for Sale Cost per unit 32,000 $24 $ 104,000 27 136,000 Number of units Cost of Goods Available for Sale $ 768,000 2,808,000 3,576,000 Cost of Goods Sold - Periodic LIFO Cost per unit $ 24 $ $27 Number of units sold 0 Cost of Goods Sold $ 0 0 0 Ending Inventory - Periodic LIFO Cost Number of units in per ending inventory unit $ 24 $ $27 0 Ending Inventory $ 0 0 0
Romanoff Industries had the following inventory transactions occur during 2013: Units Cost/unit 2/1/13 Purchase 18 $45 3/14/13 Purchase 31 $47 5/1/13 Purchase 22 $49 The company sold 50 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? a. $1,106 b. $1,184 c. $2,316 d. $2,394
Coulter Company uses the LIFO inventory method under theperiodic inventory system. The following data were available for the month ofJanuary, 2009: Units Cost per Unit Inventory,January 1 200 $5.00 PurchaseNo. 1 400 $5.50 SaleNo. 1 (sold at $12.00 per unit) 500 PurchaseNo. 2 700 $6.00 SaleNo. 2 (sold at $13.00 per unit) 500 Compute the following:Beginning inventoryEnding inventoryGoods available for saleCost of goods soldGross margin
Kumar Inc. uses a perpetual inventory system. At January 1, 2017, inventory was $214,000,000 at both cost and net realizable value. At December 31, 2017, the inventory was $286,000,000 at cost and $265,000,000 at net realizable value. Prepare the entry under (a) the cost-of-goods-sold method and (b) the loss method.
Sunland Company had ending inventory at end-of-year prices of $184,500 at December 31, 2016; 204,700 at December 31, 2017; and $220,000 at December 31, 2018. The year-end price indexes were 100 at 12/31/16, 106 at 12/31/17, and 110 at 12/31/18. Compute the ending inventory for Sunland Company for 2016 through 2018 using the dollar-value LIFO method. (Round answers to 0 decimal places, e.g. 5,275.) 2016 2017 2018 Ending inventory %24 %24 %24
SCC Co. reported the following for the current year: net sales of $48,000; cost of goods sold of $40,000; beginning balance in inventory of $2,000; and ending balance in inventory of $8,000. Compute (a) inventory turnover and (b) days’ sales in inventory. Hint: Recall that inventory turnover uses average inventory and days’ sales in inventory uses the ending balance in inventory.

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