Problem 5-24A (Algo) Effect of inventory errors on financial statements LO 5-3 The following income statement was prepared for Frame Supplies for Year 1. FRAME SUPPLIES Income Statement For the Year Ended December 31, Year 1 $68,400 (37,620) Sales Cost of goods sold Gross margin Operating expenses Net income During the year-end audit, the following errors were discovered: 30,780 (8,520) $ 22,260 1. A $1,588 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the perpetual Inventory system is used.) 2. Sales to customers for $2,243 at December 31, Year 1, were not recorded in the books for Year 1. Also, the $1,422 cost of goods sold was not recorded. 3. A mathematical error was made in determining ending Inventory. Ending Inventory was understated by $973. (The Inventory account was mistakenly written down to the Cost of Goods Sold account.) Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example,

Problem 5-24A (Algo) Effect of inventory errors on financial statements LO 5-3 The following income statement was prepared for Frame Supplies for Year 1. FRAME SUPPLIES Income Statement For the Year Ended December 31, Year 1 $68,400 (37,620) Sales Cost of goods sold Gross margin Operating expenses Net income During the year-end audit, the following errors were discovered: 30,780 (8,520) $ 22,260 1. A $1,588 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the perpetual Inventory system is used.) 2. Sales to customers for $2,243 at December 31, Year 1, were not recorded in the books for Year 1. Also, the $1,422 cost of goods sold was not recorded. 3. A mathematical error was made in determining ending Inventory. Ending Inventory was understated by $973. (The Inventory account was mistakenly written down to the Cost of Goods Sold account.) Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute for the cost of ending inventory and cost of goods sold under Moving average (Perpetual inventory system)
Effect of the error # 4 for the year 2019 Answer the ff: O-Overstated U-Understated X-No effect Purchases Cost of Sales Net income Inventory Accounts Payable RE before closing RE after closing
Exercise 5-4A ( Algo ) Effect of inventory cost flow ( FIFO , LIFO , and weighted average ) on gross margin LO 5-1 [ The following information applies to the questions displayed below . ] The following information pertains to Mason Company for Year 2 : Beginning inventory 152 units @ $ 48 430 units @ $ 72 Units purchased Ending inventory consisted of 60 units . Mason sold 522 units at $ 144 each . All purchases and sales were made with cash . Operating expenses amounted to $ 4,050 . Exercise 5-4A ( Algo ) Part a Required a . Compute the gross margin for Mason Company using the following cost flow assumptions : ( 1 ) FIFO , ( 2 ) LIFO , and ( 3 ) weighted average . ( Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount . ) Gross Margin FIFO LIFO Weighted average
Required information Exercise 5-4A (Algo) Effect of inventory cost flow (FIFO, LIFO, and weighted average) on gross margin LO 5-1 [The following information applies to the questions displayed below.) The following information pertains to Mason Company for Year 2: Beginning inventory Units purchased) Ending Inventory consisted of 54 units. Mason sold 492 units at $126 each. All purchases and sales were made with cash. Operating expenses amounted to $3.825. Exercise 5-4A (Algo) Part a 140 units@ $42 406 units @ $63 Required a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. Note: Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount. FIFO LIFO Weighted average: Gross Margin
Please do not give solution in image format thanku
Please do not give solution in image format thanku
Exercise 5-19 (Algo) Inventory turnover and days' sales in inventory LO A3 The following is information for Palmer Company. Year 3 $ 613,825 99,400 Cost of goods sold Ending inventory Year 2 $ 396,650 89,750 Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. From Year 2 to Year 3, did Palmer improve its (a) inventory turnover and (b) days' sales in inventory? Inventory turnover Days' sales in inventory Year 1 $361,300 94,500 Use the above information to compute inventory turnover for Year 2, and its days' sales in inventory at December 31, Year 2. Numerator / Denominator Inventory turnover Days' sales in inventory Use the above information to compute inventory turnover for Year 3, and its days' sales in inventory at December 31, Year 3. Numerator / Denominator Ratio < Prev 0 0 4 of 9 # Did Palmer improve its (a) inventory turnover from Year 2 to Year 3 and (b) days' sales in inventory from…
QUESTION 25 Zenith Company's Merchandise Inventory account at year-end has a balance of $91,820, but a physical count reveals that only $90,450 of inventory exists. The adjusting entry to record this $1,370 of inventory shrinkage is: Account Title Debit Credit Cost of Goods Sold 90,450 Merchandise Inventory 90,450 Account Title Debit Credit Inventory Shrinkage Expense 1,370 Cost of Goods Sold 1,370 Account Title Debit Credit Purchases Discounts 1,370 Cost of Goods Sold 1,370
Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Year 2 Year 1 $105,000 $126,000 Beginning Inventory Cost of goods purchased 840,000 882,000 Cost of goods available for sale 945,000 1,008,000 126,000 115,500 $819,000 $892,500 Ending inventory Cost of goods sold The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $16,800 2. Year 2 ending inventory was overstated by $8,400 Compute the correct cost of goods sold for both years. Year 1 Year 2 Cost of goods sold $ 802,200 $ 0
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