Vaughn Company's inventory records show the following data: Units Unit Cost Inventory, January 1 10200 $9.20 Purchases: June 18 9500 9.00 November 8 6400 5.00 A physical inventory on December 31 shows 4100 units on hand. Vaughn sells the units for $15 each. The company has an effective tax rate of 20%. Vaughn uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used? $2470 additional taxes $2676 tax savings $3444 additional taxes $2676 additional taxes

Vaughn Company's inventory records show the following data: Units Unit Cost Inventory, January 1 10200 $9.20 Purchases: June 18 9500 9.00 November 8 6400 5.00 A physical inventory on December 31 shows 4100 units on hand. Vaughn sells the units for $15 each. The company has an effective tax rate of 20%. Vaughn uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used? $2470 additional taxes $2676 tax savings $3444 additional taxes $2676 additional taxes

Name: Vaughn Company's inventory records show the following data:UnitsUnit
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Description: Vaughn Company's inventory records show the following data:UnitsUnit CostInventory, January 110200$9.20Purchases:June 1895009.00November 864005.00A physical inventory on December 31 shows 4100 units on hand. Vaughn sells the units for $15 each. The

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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Undew Inc.'s inventory records showed the following data for an item it sells regularly. Date Units Unit Cost Jan. 1 Inventory 4,000 $10.00 Jan. 3 Purchases 36,000 $10.40 Jan. 7 Sales (at $26 per unit) 14,000 Jan. 20 Purchases 12,000 $11.00 Jan. 22 Sales (at $27 per unit) 32,000 Jan. 30 Purchases 6,000 $12.00 a. Assuming that Undew maintains a periodic inventory system, compute ending inventory and cost of goods sold for the month ending January 31 using (1) average cost, (2) FIFO, and (3) LIFO. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Periodic Inventory System Ending Inventory COGS 1. Average cost method. 2. FIFO method. 3. LIFO method. b. Assuming that Undew maintains a perpetual inventory system, compute ending inventory and cost of goods sold for the month ending January 31 using (1) moving average, (2) FIFO, and (3) LIFO. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Perpetual Inventory System…
Bramble Corp. uses the perpetual inventory and the gross method. On March 1, it purchased $ 54000 of inventory, terms 2/10, n/30. On March 3, Bramble returned goods that cost $ 5400. On March 9, Bramble paid the supplier. On March 9, Bramble should credit a) purchase discounts for $ 1080. b) purchase discounts for $ 972. c) inventory for $ 972. d) inventory for $ 1080.
The Williams Company sells a product called Mix-Right for $15 each and uses a perpetual inventory system to account for its merchandise. The beginning balance of Mix-Rights and transactions during October 2020 were as follows: Oct 1 Balance: 94 units costing $5 each. 3 Purchased 109 units from Arnold Brothers costing $7.50 each 4 Returned 29 of the units purchased on October 3. 9 Sold 84 units to Kitchen Club, invoice #210. 15 Purchased 209 units from Arnold Brothers costing $8.20 each. 18 Sold 168 units to Thorhild Co-op, invoice #211. 19 Paid for the October 3 purchase; cheque #101. 23 Paid for the October 15 purchase, cheque #102. 24 Sold 59 units to Boyle Grocery, invoice #212. 31 Purchased 84 units from Arnold Brothers costing $8.00 each. Q: Journalize the October transactions in the sales, purchases, and cash disbursements journals. Assume all sales and purchases are on credit; terms 2/10, n/30. Under the assumption…
7. LIFO vs FIFO Consider the following record of inventories for NINO (Nothing-In-Nothing-Out) Retailing: Year 1: bought 4 units for $12 each; sold 2 unit. Year 2: bought 5 units for $15 each; sold 4 units. Year 3: bought 6 units for $16 each; sold 8 units. Assume further that the company uses LIFO and the periodic inventory system. In addition, the marginal tax rate is 21%. 7.1 Complete the following table (shaded cells): Year EluFo LIFO reserve ALIFO reserve COGSIFO -COGSFIFO NIFIFO - NIUFO 1 2 3 Outline all the adjustments (including amounts) to convert LIFO to FIFO on the Balance Sheet and the Income Statement for Year 3. 7.2
You sold $8,000 of inventory for $10,000 on terms 2/10,n/30. If your customer pays the bill on day five, which of the following are true statements relating to just the day five transaction? Remember that the larger number in a transaction will be the revenue and the smaller one will be the cost of goods sold. A. You will debit cash for $10,000 B. You will credit inventory for $200 C. You will debit discounts for $200 D. You will debit cash for $9,800 E. You will label this transaction as paid bill F. You will label this transaction as a cash entry Select all that apply.
The following data was obtained from the records of ABC Inc., for the current year. Sales during the year were 210 units. Jan 1, 2021 Beginning Inventory 80 units at $8 Jan 11, 2021 Purchases 65 units at $10 Jan 23, 2021 Purchases 55 units at $ 12 January 31 Purchases 53 units at $14 IF THE TAX RATE IS 30%, HOW MUCH IN TAXES WILL ABC SAVE IN THE CURRENT YEAR IF THEY CHOOSE TO USE LIFO INSTEAD OF FIFO?
Accounting You have the following information for Sheffield Inc. Sheffield Inc. uses the periodic method of accounting for its inventory transactions. March 1 Beginning inventory 2,000 liters at a cost of 60¢ per liter. March 3 Purchased 2,500 liters at a cost of 62¢ per liter. March 5 Sold 2,300 liters for $1.05 per liter. March 10 Purchased 4,000 liters at a cost of 69¢ per liter. March 20 Purchased 2,300 liters at a cost of 77¢ per liter. March 30 Sold 5,200 liters for $1.25 per liter. Prepare partial income statements for 2022 through gross profit, under each of the following cost flow assumptions. (Round answers to 2 decimal places, e.g. 125.25.) (1) Specific identification method assuming: (i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,300 liters from the March 3 purchase; and The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 450 liters from March 1; 550 liters from March 3;…
Problem Hans Inc. is a merchandising company that resells equestrian saddles. The company's inventory data is as follows: Cost of Goods Available for Sale Jan. 1 Beginning Balance 2 units @ $200 $400 Jan. 5 Purchase 3 units @ $400 = $1,200 4 units @ $500 $2,000 Jan. 20 Purchase Retail Sales of Goods Jan. 15 Sales 3 units @ $900 = $2,700 Jan. 31 Sales 2 units @ $1,000 = $1,800 Assume Hans Inc. uses a perpetual inventory system. For the January 15th sale, the units sold consisted of 2 units from January 5th purchase and 1 unit from January 1st inventory balance. For the January 31st sale, the units sold consisted of 1 unit from the January 1st inventory balance and 1 unit from the January 20th purchase.
The Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1982. In 2021, the company decided to change to the average cost method. Data for 2021 are as follows: Beginning inventory, FIFO (6,500 units @ $45.00) Purchases: 6,500 units @ $51.00 6,500 units @ $55.00 Cost of goods available for sale Sales for 2021 (11,000 units @ $85.00) Additional information: 1. The company's effective income tax rate is 25% for all years. 2. If the company had used the average cost method prior to 2021, ending inventory for 2020 would have been $266,500. 3. 8,500 units remained in inventory at the end of 2021. Answer is not complete. Complete this question by entering your answers in the tabs below. $331,500 357,500 Required: 1. Prepare the journal entry at the beginning of 2021 to record the change in principle. 2. In the 2021-2019 comparative financial statements, what will be the amounts of cost of goods sold and inventory reported…
What is The inventory, turnover ratio and days to sell inventory ratio? (a) Larkspur Hands Ltd. is a retailer specializing in hand care products. The company donates twenty percent of its profits to local charities. Larkspur Hands uses the periodic inventory system and the following limited information relates to Larkspur Hands Ltd. `s inventory transactions during the month of May: Units sold were priced at $63.00. Calculate Larkspur Hands' cost of goods sold, gross margin, and ending inventory for the month of May using FIFO. Cost of goods sold $ Gross margin $ Ending inventory $
Anton Company uses the perpetual inventory method. Anton purchased 760 units of inventory that cost $7 each. At a later date the company purchased an additional 870 units of inventory that cost $9 each. If Anton uses the FIFO cost flow method and sells 1,150 units of inventory, the amount of cost of goods sold will be: Multiple Choice $10,350. $8,050. $10,420. $8,830.