Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory usingthe LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement cost). Thepreliminary income statement follows:Sales Revenue$ 142,000Cost of Goods SoldBeginning Inventory$ 15,500Purchases92,000Goods Available for Sale107,500Ending Inventory23,245Cost of Goods Sold84,255Gross Profit57,745Operating Expenses31,500Income from OperationsIncome Tax Expense (40%)26,24510,498Net Income$ 15,747Assume that you have been asked to restate the financial statements to incorporate the LCM/NRV rule. You have developed thefollowing data relating to the ending inventory:Purchase CostReplacementCost perQuantity1,550ItemPer UnitTotalUnitA$ 3.10$ 4,805$ 4.102,9757,560B7004.252.103,6002.101.05D1,5505.107,9053.10$ 23,245Required:1. Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis.2. Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1.Complete this question by entering your answers in the tabs below.Required 1Required 2Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis.SPRINGER ANDERSON GYMNASTICSIncome Statement (LCM/NRV basis)For the Year Ended December 31Sales Revenue$142,000Cost of Goods Sold:Beginning Inventory$15,500Purchases92,000Goods Available for Sale107,500Ending Inventory23,245Cost of Goods Sold84,255Gross ProfitOperating ExpensesIncome from OperationsIncome Tax ExpenseNet Income

Name: Springer Anderson Gymnastics prepared its annual financial statements
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory usingthe LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement

1. Item Quantity Cost per unit Replacement Cost per unit LCM/NRV per unit Ending Inventory on LCM…

Business

Accounting

Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory i the LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement cost). The preliminary income statement follows: $ 142,000 Sales Revenue Cost of Goods Sold $ 15,500 92,000 107,500 Beginning Inventory Purchases Goods Available for Sale Ending Inventory 23,245 84,255 57,745 31,500 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations 26,245 Income Tax Expense (40%) 10,498 $ 15,747 Net Income Assume that you have been asked to restate the financial statements to incorporate the LCM/NRV rule. You have developed the following data relating to the ending inventory: Purchase Cost Replacement Cost per Unit Quantity Per Unit 1,550 Item Total $ 3.10 $ 4.10 $ 4,805 2,975 7,560 A B. 700 4.25 2.10 3,600 2.10 1.05 1,550 5.10 7,905 3.10 $ 23,245

Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory i the LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement cost). The preliminary income statement follows: $ 142,000 Sales Revenue Cost of Goods Sold $ 15,500 92,000 107,500 Beginning Inventory Purchases Goods Available for Sale Ending Inventory 23,245 84,255 57,745 31,500 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations 26,245 Income Tax Expense (40%) 10,498 $ 15,747 Net Income Assume that you have been asked to restate the financial statements to incorporate the LCM/NRV rule. You have developed the following data relating to the ending inventory: Purchase Cost Replacement Cost per Unit Quantity Per Unit 1,550 Item Total $ 3.10 $ 4.10 $ 4,805 2,975 7,560 A B. 700 4.25 2.10 3,600 2.10 1.05 1,550 5.10 7,905 3.10 $ 23,245

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

At the end of January of the current year, the records of Donner Company showed the following for a particular item that sold at $15.80 per unit: Transactions Units Amount Inventory, January 1 680 $3,400 Purchase, January 12 650 4,550 Purchase, January 26 210 1,890 Sale (540) Sale (200) Required: 1a. Assuming the use of a periodic inventory system, compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. 1b. Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (c) LIFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. 2a. Between FIFO and…
A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 390 units. Ending inventory at January 31 totals 150 units. Units Unit Cost Beginning inventory on January 1 350 $ 3.40 Purchase on January 9 80 3.60 Purchase on January 25 110 3.70
The records of Alaska Company provide the following information for the year ended December 31. At Cost $ 473,050 2,771,405 At Retail $928,850 6,281,050 5,512,700 46,300 Beginning inventory, January 1 Cost of goods purchased Sales Sales returns Required: 1. Use the retail inventory method to estimate the company's year-end inventory at cost. 2. A year-end physical inventory at retail prices yields a total inventory of $1,692,800. Prepare a calculation showing the company's loss from shrinkage at cost and at retail. Complete this question by entering your answers in the tabs below. Required 1 Re ired 2 A year-end physical inventory at retail prices yields a total inventory of $1,692,800. Prepare a calculation showing the company's loss from shrinkage at cost and at retail. Note: Round your ratio calculations to 2 decimal places. (i.e. 10.15%) ALASKA COMPANY Inventory Shortage December 31 At Cost Estimated inventory Physical inventory Inventory shortage Required 1 1. Use the retail…
Do not give answer in image
Inventory Costing Methods and the Periodic MethodKay & Company experienced the following events in March: Date Event Units Unit Cost Total Cost Mar. 1 Purchased inventory 100 @ $16 $1,600 Mar. 3 Sold inventory 60 Mar. 15 Purchased inventory 100 @ 18 $1,800 Mar. 20 Sold inventory 40 If Kay & Company uses the weighted-average cost method, calculate the company’s cost of goods sold and ending inventory as of March 31 assuming the periodic method.(Round answer to two decimal places, if needed.)
Vaughn Company uses a periodic inventory system. For April, when the company sold 540 units, the following information is available. April 1 inventory April 15 purchase April 23 purchase Ending inventory Units Cost of goods sold 220 380 400 1,000 Unit Cost $25 $ 30 33 Total Cost $5,500 Compute the April 30 inventory and the April cost of goods sold using the FIFO method. 11,400 13,200 $30,100
Adler Inc. has the following information for four inventory items, reported using the retail method, on July 31. The normal profit margin is 20% of selling price. Cost to Sell Cost per Replacement Cost Item Selling Price per No. Quantity Unit per Unit Unit per Unit #101 80 $20 $5 $15 $12 #102 50 22 4 14 15 #211 30 35 5 30 28 #212 40 40 8 28 35 Required Determine the inventory cost to report on the balance sheet on July 31 assuming that the company applies the lower of cost or market value rule to each individual inventory item. Note Do not use any negative signs with your answers. Per Unit Total Total Cost Cost to Cost Replacement Total Sell per Replacement Ceiling Floor Market Cost Lower of Selling Price Item per per No. Quantity Unit Unit Unit per Unit Cost #101 80 $20 $5 $15 $12 $ 0 $ #102 50 22 #211 30 35 45 14 15 0 30 28 0 #212 40 40 8 28 35 0 000 O 0 ос 00 Cost or Market 0 $ 0 $ 0 $ 0 $ 0 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0
Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during the year: Cost Retail Inventory, January 1 $32,500 $65,000 Purchases 130,000 215,667 Markups (net) — 3,000 Markdowns (net) — 2,000 Sales — 190,000 Required:
Culver Corporation uses a periodic inventory system and reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 116 $4 $464 12 Purchases 464 6 2,784 23 Purchases 290 8 00 2,320 30 Inventory 270 (a) Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (For calculation purposes, round average cost to 3 decimal places, eg. 5.275. Round answers to O decimal places, e.g. 125.) FIFO The cost of the ending inventory $ The cost of goods sold $ LIFO $ $ Average-Cost
Inventory Costing Methods and the Perpetual MethodKay & Company experienced the following events in March: Date Event Units Unit Cost Total Cost Mar. 1 Purchased inventory 100 @ $16 $1,600 Mar. 3 Sold inventory 60 Mar. 15 Purchased inventory 100 @ 18 $1,800 Mar. 20 Sold inventory 40 Assume the perpetual inventory system is used. Use the weighted-average inventory costing method to calculate the company’s cost of goods sold and ending inventory as of March 31. Round weighted-average cost per unit to two decimal places. Use rounded answer for subsequent calculations. Round all other answers to the nearest dollar. March 3 Cost of goods sold Answer March 20 Weighted-average cost per unit Answer Cost of goods sold Answer March 31 Total cost of goods sold Answer Ending inventory Answer
Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during the year: Cost Retail Inventory, January 1 $32,500 $65,000 Purchases 130,000 215,667 Markups (net) — 3,000 Markdowns (net) — 2,000 Sales — 190,000 Required: Compute the ending inventory by the retail inventory method for the following cost flow assumption: FIFO. Round the cost-to-retail ratio to three decimal places. HARMES COMPANYCalculation of ending inventory by retail inventory methodFIFO
Perez Company had the following information for the year ending December 31: Units Unit Cost Beginning inventory 360 $34 Purchase: April 6 290 35 Sale: May 4 380 Purchase: July 19 590 39 Sale: September 9 450 Purchase: October 10 140 45 Perez uses the perpetual inventory system and the FIFO method. Required: Using FIFO (a) Compute the cost of ending inventory. (b) Compute the cost of goods sold for the year. Cost of ending inventory Cost of goods sold