Hi experts please give answer this general accounting question Pinnacle Corporation uses the LIFO inventory method. At the end of the 2025accounting period, the company reported $12,000 of net earnings on its incomestatement. The inventory balance on the 2025 balance sheet is $8,500. In the footnotes.the LIFO reserve at the end of 2025 is $4,000, and the LIFO reserve at the end of 2024 is$3,300.Meanwhile, Brentwood Corporation, which uses the FIFO method, reported $12,700 ofnet earnings on its 2025 income statement.Which company would have higher net earnings if both companies used the sameinventory method?

Step 1: Define LIFO ReserveThe LIFO Reserve is the difference between the inventory reported under…

Answered: Pinnacle Corporation uses the LIFO…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

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Chapter10: Inventory

Section: Chapter Questions

Problem 16PB: Use the following information relating to Medinas Company to calculate the inventory turnover ratio,...

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Use the following information relating to Medinas Company to calculate the inventory turnover ratio, gross margin, and the number of days sales in inventory ratio, for years 2022 and 2023.
Use the following information relating to Clover Company to calculate the inventory turnover ratio, gross margin, and the number of days sales in inventory ratio, for years 2022 and 2023.
You are looking into the accounts of a company that has presented using LIFO for inventory. You see in the notes the LIFO Reserve in 2019 and 2020 were 160,000 and 240,000 respectively. The company pays tax at 30% in both years. Show the relevant adjustments you would have to make to the Balance Sheet and income statement to convert the company to a FIFO basis. Describe the effect that this conversion would have on net profit margin, gross profit margin, debt to equity, inventory turnover and current ratio in 2020. Another company has written down some inventory. Explain why a company would need to write down inventory and the effects this would have on the company accounts.
Following information is available for Nick Company for the year ended 2020: Additional information: Amount for accounts receivable (net) at the end of 2019 was $57,000. The inventory as of 01st of January 2020 is calculated as $22,000. Required: Calculation of the following for the year ended 2020: a) Working capital b) Quick ratio c) Inventory turnover ratio. d) Accounts receivable turnover ratio and number of days in the collection assuming 366 days a year.
The following data were obtained from the books of JOYFUL CORPORATION: Accounts receivable, March 31, 2021 – P110,000; Accounts receivable, September 30, 2021 – P130,000; Purchases, March to September 2021 – P450,000; Inventory, March 31, 2021 – P180,000; Average gross profit rate – 40%; Accounts receivable turnover – 6 to 1. The Inventory at September 30, 2021 should be ______. A. 198,000B. 150,000C. 120,000
The following data were obtained from the books of JOYFUL CORPORATION: Accounts receivable, March 31, 2021 – P110,000; Accounts receivable, September 30, 2021 – P130,000; Purchases, March to September 2021 – P450,000; Inventory, March 31, 2021 – P180,000; Average gross profit rate – 40%; Accounts receivable turnover – 6 to 1. The Inventory at September 30, 2021 should be ______. A. 198,000B. 150,000C. 120,000d. None of these
In its 2019 annual report, Kingbird, Inc. reported inventory of $ 626 million on January 31, 2020, and $ 540 million on January 31, 2019, cost of goods sold of $ 5,746 million for the year, and net sales of $ 7,184 million for the year. Compute Kingbird's inventory turnover for the fiscal year 2019. (Round answer to 2 decimal places, e.g. 7.62.) Inventory turnover times Compute Kingbird's average days to sell inventory for the fiscal year 2019. (Round answer to 2 decimal place, e.g. 7.65. Use 365 days for calculation.) Average days to sell inventory days
The following information came from the income statement of the Grouper Company at December 31, 2025: sales revenue $2860000; beginning inventory $176000; ending inventory $264000; and gross profit $660000. What is Grouper' inventory turnover for 2025? O 3.00 times O 3.75 times O 10.00 times O 2.50 times
During 2025, Vaughn Company changed from FIFO to weighted-average inventory pricing. Pretax income in 2024 and 2023 (Vaughn's first year of operations) under FIFO was $172,490 and $196,830, respectively. Pretax income using weighted-average pricing in the prior years would have been $154,000 in 2024 and $188,000 in 2023. In 2025, Vaughn reported pretax income (using weighted- average pricing) of $220,600. Show comparative income statements for Vaughn, beginning with "Income before income tax as presented on the 2025 income statement. (The tax rate in all years is 3096) Income before income tax Income tax Net income $ $ 2025 2024 $ $ 2023
Compute the following ratios for 2022 and 2021. Inventory on December 31, 2020, was $330. Assets on December 31, 2020, were $1,910. Stockholders' equity-common on December 31, 2020, was $900. (Round current ratio and inventory turnover to 2 decimal place e.g. 15.25. Round other answers to 1 decimal place, e.g. 15.2 or 15.2%.) (a) (b) Inventory turnover (c) (d) (e) (f) Current ratio (g) Profit margin Return on assets Return on common stockholders' equity Debt to assets ratio Times interest earned 2022 1.67 2 7.73 :1 times % % % % times 2021 1.79 2 4.42 :1 times de % % % % times
Sheffield Inc. reported the following partial statement of income data for the years ended December 31, 2024 and 2023: Sales Cost of goods sold Gross profit (a) The company reported inventory in the statement of financial position at $46,000, $49,500, and $48,000 at the end of 2022, 2023, and 2024, respectively. The ending inventory amounts for 2022 and 2024 are correct. However, the company has understated the ending inventory at December 31, 2023, by $7,620. Sales 2024 $263,000 Cost of goods sold 204,000 $59,000 Your answer has been saved. See score details after the due date. Prepare correct statements of income for 2023 and 2024 through to gross profit. 2024 Gross profit (b) 2023 $254,000 199,390 $54,610 $ eTextbook and Media 263000 211620 51380 $ $ 2023 Cumulative effect of the inventory error on total gross profit $ 254000 191770 62230 Attempts: 1 of 1 used What is the cumulative effect of the inventory error on total gross profit for these two years? (If answer is zero, please…
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