Gross profit?? General Account Sauerbraten Corp. reported 2007 sales ($ in millions) of $2,157 and a costof goods sold of $1,827. The company uses the LIFO method for inventoryvaluation. It discloses that if the FIFO inventory valuation method hadbeen used, inventories would have been $63.3 million and $56.8 millionhigher in 2007 and 2006, respectively.If Sauerbraten used the FIFO method exclusively, it would have reported2007 gross profit closest to?a. $324.b. $330.c. $337.

To calculate Sauerbraten Corp.'s gross profit under the FIFO method, we need to adjust the cost of…

Answered: Sauerbraten Corp. reported 2007 sales…

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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Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $224,988 and average assets of $1,558,950. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,570 more than under FIFO, and its average assets would have been $42,390 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). (Enter your answers as percentages rounded to 1 decimal place (i.e., 12.2%).) b. Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $268,168 and $1,893,070, respectively. If LIFO had been used through the years, inventory values would have been $41,250 less than under FIFO, and current year cost of goods sold would have been $15,419 less than under FIFO. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). (Enter your answers as percentages…
At the end of the Year 2 accounting period, DeYoung Company determined that the market value of its inventory was $79,800. The historical cost of this inventory was $81,400. DeFazio uses the perpetual inventory method. Assuming the amount is immaterial, how will the necessary write-down to reduce the inventory to the lower-of-cost-or-market affect the company's financial statements? Multiple Choice O O Decrease total assets, gross margin, and net income Increase total assets and net income Decrease total assets and gross margin Decrease total assets and net income
The following inventory valuation errors have been discovered for Knox Corporation: The 2015 year-end inventory was overstated by $23,000 The 2016 year-end inventory was understated by $61,000 The 2017 year-end inventory was understated by $17,000 The reported income before taxes for Knox was: Year: Income before Taxes: 2015 $138,000 2016 $254,000 2017 $168,000 Required: 1. Compute what income before taxes for 2015, 2016, and 2017 should have been after correcting for the errors.
In 2016, CPS Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2015, CPS’s inventories were $32 million (FIFO). CPS’s records indicated that the inventories would have totaled $23.8 million at December 31, 2015, if determined on an average cost basis. Required: 1. Prepare the journal entry to record the adjustment. (Ignore income taxes.) 2. Briefly describe other steps CPS should take to report the change.
Masthead Company's comparative balance sheets included an inventory of $180,400 at December 31, 2009, and $241,200 at December 31, 2010. Masthead's comparative balance sheets also included accounts payable of $85,400 at December 31, 2009, and $78,400 at December 31, 2010. Masthead's accounts payable balances are composed solely of amounts due to suppliers for purchases of inventory on account. Cost of goods sold, as reported by Masthead on its 2010 income statement, amounted to $1,200,000. What is the amount of cash payments for inventory that Masthead will report in the Operating Activities category of its 2010 statement of cash flows assuming that the direct method is used?
The cost of goods sold for Veltron International last year amounted to $547,800, and the average inventory at cost was $219,120. The published inventory turnover at cost is 6.6. Calculate the inventory turnover at cost, and if it is less than the published rate, calculate the target average inventory at cost (in $). (If the actual turnover is greater than the published rate, enter "above" for target average inventory.) Inventory turnover at cost Target average inventory at cost $
If Karp had used FIFO instead of LIFO, the amount of inventory reported as of31 December 2009 would have been closest to:A. $465 million.B. $658 million.C. $775 million.
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The cost of goods sold for Veltron International last year amounted to $561,000, and the average inventory at cost was $224,400. The published inventory turnover at cost is 6.6. Calculate the inventory turnover at cost, and if it is less than the published rate, calculate the target average inventory at cost (in $). (If the actual turnover is greater than the published rate, enter "above" for target average inventory.) Inventory turnover at cost Target average inventory at cost $ Need Help? Read It Watch It Master It

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