Not use ai financial accounting question P Company regularly sells merchandise to its 80%-owned subsidiary, SCorporation. In 2016, P sold merchandise that cost $192,000 to S for$240,000. Half of this merchandise remained in S's December 31, 2016inventory. In 2017, P sold merchandise that cost $300,000 to S for$375,000. Forty percent of this merchandise inventory remained in S'sDecember 31, 2017 inventory. Selected income statement informationfor the two affiliates for the year 2017 is as follows:PSSales revenue$1,800,000 $900,000Cost of goods sold $1,440,000 $750,000Gross profit$360,000 $150,000|Consolidated sales revenue for P and Subsidiary for 2017 are

Step 1: Define Sales RevenueThe money earned from routine company activities is referred to as…

Answered: P Company regularly sells merchandise…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.8MCP

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Habicht Company was formed in 2018 to produce a single product. The production and sales for the next 4 years were as follows: Required: 1. Determine the gross profit for each year under each of the following periodic inventory methods: a. FIFO b. LIFO c. Average cost (Round unit costs to 3 decimal places.) 2. Next Level Explain whether the companys return on assets (net income divided by average total assets) would be higher under FIFO or LIFO.
Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Hogan Industries had the following inventory transactions occur during 2017: Units Cost/unit Feb. 1, 2017 Purchase 95 $40 Mar. 14, 2017 Purchase 164 $41 May 1, 2017 Purchase 116 $43 The company sold 269 units at $55 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? (rounded to whole dollars)
For the period from 2016 through 2016, the Charlie Company had net sales of $500,000 and a gross profit of $200,000. During the first quarter of 2018, the company made purchases of $19,500 and recorded sales of $47,500. The inventory value at the beginning of the year was 15,500. What is the estimated cost of Charlie's inventory on March 31, 2018, using the gross profit method?
Decker Company has five products in its inventory. Information about the December 31, 2016, inventory follows. Unit Selling Unit Product Quantity Cost Price 1,000 $10 $16 15 B 800 18 600 3 D 200 600 14 13 The cost to sell for each product consists of a 15 percent sales commission. Required: 1. Determine the book value of inventory at December 31, 2016, assuming the lower of cost and net realizable value rule is applied to individual products.
The consolidated balance sheets of Gap Inc. included merchandise inventory in the amount of $1,625 as of January 30, 2016 (the end of fiscal year 2015) and $1,605 as of January 31, 2015 (the end of fiscal year 2014). Net sales were $14,529 and $14,663 at the end of fiscal years 2015 and 2014, respectively. Cost of goods sold and occupancy expenses were $9,273 and $8,790 at the end of fiscal years 2015 and 2014, respectively. All amounts are from Gap Inc.’s 2015 Form 10-K. How does this entry affect the accounting equation?If a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter "0". If the effect is negative, use the minus sign.Enter amounts in millions of dollars. For example, 12,400,000,000 would be entered as 12,400. Balance Sheet Income Statement Stockholders' Net Assets = Liabilities + Equity Revenues – Expenses = Income Cash 3. Gap…
On January 1, 2017, Manuel Company's merchandise inventory was $300,000. During 2017, Manuel purchased $1,900,000 of merchandise and recorded sales of $2,000,000. The gross profit margin on these sales was 20% of the selling price. Required: 1. What is Manuel's merchandise inventory at December 31, 2017?
During 2017, Shamrock Inc. changed from LIFO to FIFO inventory pricing. Shamrock began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $ 440,000 and $ 522,000, respectively. Pretax income using FIFO pricing in the prior years would have been $ 474,000 in 2015 and $ 576,000 in 2016. In 2017, Shamrock reported pretax income using FIFO pricing of $ 539,000. Show comparative income statements for Shamrock beginning with "Income before income tax," as presented in the 2017 income statement. The tax rate for all years is 30%. 2017 2016 2015 Income before income tax $ Income tax Net Income $ %24 %24
During 2017, Windsor Inc. changed from LIFO to FIFO inventory pricing. Windsor began operations in 2015 and its pretax income in 2016 and 2015 under LIFO was $610,000 and $706,000, respectively. Pretax income using FIFO pricing in the prior years would have been $636,000 in 2015 and $762,000 in 2016. In 2017, Windsor reported pretax income using FIFO pricing of $731,000. Show comparative income statements for Windsor beginning with “Income before income tax,” as presented in the 2017 income statement. The tax rate for all years is 30%. 2017 2016 2015 Income before income tax $enter a dollar amount $enter a dollar amount $enter a dollar amount Income tax enter a dollar amount enter a dollar amount enter a dollar amount Net Income $enter a total amount $enter a total amount
Johnson Corporation began 2016 with inventory of 10,000 units of its only product. The units cost $8 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during 2016: a. Purchased 50,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The merchandise was purchased f.o.b. shipping point and freight charges of $.50 per unit were paid by Johnson. b. 1,000 units purchased during the year were returned to suppliers for credit. Johnson was also given credit for the freight charges of $.50 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received. c. Sales for the year totaled 45,000 units at $18 per unit. d. On December 28, 2016, Johnson purchased 5,000 additional units at $10 each. The goods…
For the wholesale division, Devin uses the dollar value LIFO method of inventory. The base year established for LIFO is 2014. The inventory at the end of 2014 was calculated as $1,040,500. For the next 3 years you have the following information: 2015 2016 2017 Ending inventory counted at cost 1,085,000 1,091,000 1,398,000 Price level increase from 2014 3% 5% 10 % Net Purchases $2,935,000 Net Sales $5,456,000 Required for the retail division: 1. Calculate the ending inventory to be reported on the balance sheet for each of the three years. 2. Calculate the cost of goods sold and the gross margin for 2016.
The data shown below were obtained from the financial records of the BST Corporation for the year ended December 31, 2020. Sound Break CorporationIncome and Retained Earnings StatementFor the year Ended December 31, 2020Net Sales P1,000,000Cost of Goods Sold:Inventory, Dec. 31, 2019 P250,000Purchases 720,000Total Goods Available P970,000Inventory 220,000 750,000Gross Margin on Sales P 250,000Selling and Administrative (including Depreciation of P20,000) 125,000Net Income before Tax P 125,000Provision for Income Tax 35,000Net Income for the Year P 90,000Retained Earnings, beginning 130,000Total P 220,000Dividends Paid 30,000Retained Earnings, December 31, 2020 P 190,000 Sound Break CorporationBALANCE SHEETDecember 31, 2019 and 2020 ASSETS 2019 2020Current Assets:Cash P 75,000 P 85,000Marketable Securities 25,000 25,000Trade Receivables, net 185,000 245,000Inventory, at cost 250,000 220,000Prepaid Expenses 15,000 10,000Total Current Assets P550,000 P585,000Property and Other…

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