I want to answer this question K. Co. uses LIFO inventory method. At the end ofthe 2006 accounting period, the companyreported $10,000 of net earnings on I/S. Theinventory balance on the 2006 B/S is $7,000. Inthe 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 ofnet earnings on the 2006 I/S. Which company hasa higher earnings if both of the companies woulduse the same inventory method?

Step 1: Introduction to the Inventory methodThe inventory method is to evaluate the inventory (raw…

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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Tanke Company reported net income on the year-end financial statements of $850,200. However, errors in inventory were discovered after the reports were issued. If inventory was overstated by $21,000, how much net income did the company actually earn?
Shetland Company reported net income on the year-end financial statements of $125,000. However, errors in inventory were discovered after the reports were issued. If inventory was understated by $15,000, how much net income did the company actually earn?
Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.
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At the beginning of the year, Sheridan Company had an inventory of $745000. During the year, the company purchased goods costing $1629950. If Sheridan Company reported ending inventory of $81000 and sales of $3730000, the company's cost of goods sold and gross profit rate must be $1436050 and 62.6%. $ 2293950 and 61.5%. $1436050 and 38.5 %. $ 2293950 and 38.5%. At the beginning of the year, Sheridan Company had an inventory of $745000. During the year, the company purchased goods costing $1629950. If Sheridan Company reported ending inventory of $81000 and sales of $3730000, the company's cost of goods sold and gross profit rate must be $1436050 and 62.6%. $2293950 and 61.5% O $1436050 and 38.5% O $2293950 and 38.5%
A7X Corporation has ending inventory of $701,073 and cost of goods sold for the year just ended was $7,461,613. a. What is the inventory turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the days’ sales in inventory? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. How long on average did a unit of inventory sit on the shelf before it was sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
A7X Corporation has ending inventory of $686,373 and cost of goods sold for the year just ended was $4,765,135. a. What is the inventory turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the days' sales in inventory? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. How long on average did a unit of inventory sit on the shelf before it was sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Inventory turnover b. Days' sales in inventory Days on the shelf C. times days days
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.
Esquire Incorporated uses the LIFO method to report its inventory. Inventory at the beginning of the year was $552,000 (23,000 units at $24 each). During the year, 86,000 units were purchased, all at the same price of $28 per unit. 88,000 units were sold during the year. Assuming an income tax rate of 25%, what is LIFO liquidation profit or loss that the company would report in a disclosure note accompanying its financial statements? LIFO liquidation profit (loss)
A company has the following information available that was used to report inventory using the dollar-value LIFO method. Year Year-End Cost Cost Index 12/31/2020 $250,000 1.00 12/31/2021 259,000 1.06 For the year ended 12/31/2021, the company reported inventory of $274,540 ($259,000 × 1.06). Which of the following statements is correct? O The amount reported for ending inventory should be calculated as $250,000 + ($9,000 × 1.06). O The amount reported for ending inventory should be calculated as $250,000 + ($9,000/1.06). The amount reported for ending inventory is correct. O The amount reported for ending inventory should be calculated as $259,000/1.06.
The following data were obtained from the records of Salacot Company: Current ratio (at year end) 1.5 to 1 / Inventory turnover based on sales and ending inventory 15 times /Inventory turnover based on cost of goods sold and ending inventory 10 times /Gross margin for 2007 P360,000 What was Salacot Company’s December 31, 2007 balance in the Inventory account? * a. P72,000 b. P 54,000 c. P 80,000 d. P 95,000
On January 1, 2024, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $170,000 and $273,000, respectively. Net purchases during the year at cost and at retail were $719,200 and $890,000, respectively. Markups during the year were $9,000. There were no markdowns. Net sales for 2024 were $844,400. The retail price index at the end of 2024 was 1.05. What is the inventory balance that Coldstone would report in its 12/31/2024 balance sheet? Note: Do not round intermediate calculations. Multiple Choice $249,600 $327,600 $202,760 $262,080

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