Financial Accounting
3rd Edition
ISBN: 9780078025549
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 12, Problem 10RQ
To determine
To Explain: The effect of purchase of inventory on account on the
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Swing Ltd uses FIFO for its inventory, which is valued at $21,000. It is considering a change to moving weighted average, which would change the valuation of inventory to $22,500. Which of the following would be decreased by the change?
Cost of goods sold
b.
Sales
c.
Liabilities
d.
Withdrawals
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - 5.In performing horizontal analysis, why is it...Ch. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16RQCh. 12 - Prob. 17RQCh. 12 - Prob. 18RQCh. 12 - Prob. 19RQCh. 12 - Prob. 20RQCh. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Prob. 12.5BECh. 12 - Universal Sports Supply began the year with an...Ch. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - Prob. 12.12BECh. 12 - Prob. 12.13BECh. 12 - Classify each of the following accounting...Ch. 12 - Classify each of the following accepted accounting...Ch. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - The income statement for Stretch-Tape Corporation...Ch. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Distinguish between conservative and aggressive...Ch. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.4APCh. 12 - Prob. 12.5APCh. 12 - Prob. 12.6APCh. 12 - Prob. 12.1BPCh. 12 - Prob. 12.2BPCh. 12 - Prob. 12.3BPCh. 12 - Prob. 12.4BPCh. 12 - Prob. 12.5BPCh. 12 - Prob. 12.6BPCh. 12 - Prob. 12.1APCPCh. 12 - Prob. 12.2APFACh. 12 - Prob. 12.3APFACh. 12 - Prob. 12.4APCACh. 12 - Prob. 12.5APECh. 12 - Prob. 12.7APWCCh. 12 - Prob. 12.8APEM
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- If PetCo had net sales of $600,000, goods available for sale of $450,000, and cost of goods sold of $375,000, what is its grossmargin? What amount of inventory will be shown on its balance sheet?arrow_forwardSwing Ltd uses FIFO for its inventory, which is valued at $21,000. It is considering a change to moving weighted average, which would change the valuation of inventory to $22,500. Which of the following would be decreased by the change? a.Cost of goods sold b.Sales c.Liabilities d.Withdrawalsarrow_forwardWalker Corp, has current liabilities of $440,000, a quick ratio of .81, Inventory turnover of 5.7. and a current ratio of 1.8. What is the cost of goods sold for the company? (Do not round Intermedlate calculations.) Cost of goods sold 益券arrow_forward
- Carla Vista Corporation has current liabilities of $422,000, a quick ratio of 1.9, inventory turnover of 5.2, and a current ratio of 4.2. What is the cost of goods sold for Carla Vista Corporation? Cost of goods sold $arrow_forwardTriple J Company has a current ratio of 3.1. The acid test ratio is 2.4. The current liabilities of Arcy Incorporated are $73,000. Could you calculate the dollar amount of merchandise inventory?arrow_forwardCricket Training Company has a current ratio of 0.80 to 1, based on current assets of $6.64 million and current liabilities of $8.30 million. 1. How, if at all, will a $880,000 cash purchase of inventory affect the current ratio? 2. How, if at all, will a $880,000 purchase of inventory on account affect the current ratio? Complete this question by entering your answers in the tabs below. Required 1 Required 2 How, if at all, will a $880,000 cash purchase of inventory affect the current ratio? The current ratio will Required 1 Next > ********* Check my • Coomarrow_forward
- Beach Wear has current liabilities of RM350,000, a quick ratio of 1.65, inventory turnover of 4.7, and a current ratio of 2.9. What is the cost of goods sold? Select one: a. RM2,056,250 b. RM1,760,750 c. RM1,950,000 d. RM1,980,500arrow_forwardLast year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?arrow_forwardThe company made purchases of P60,000 and sales of P85,000 with P10,000 left in inventory. If the company has no beginning inventory, how much is the cost of sales?arrow_forward
- 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…arrow_forwardSmith Corporation had Sales of $2,350,000 in 2021 and $2,125,000 in 2020. Cost of Good Sold were $1,400,000 in 2021 and $1,325,000 in 2020. a. What was the percentage change in Sales year to year? b. What was the percentage change in Cost of Goods Sold year to year? c. Relative to the percentage in Sales, would you say the percentage change on Cost of Goods Sold was favorable or unfavorable? d. Is this an example of horizontal or vertical analysis?arrow_forwardFalcon Corporation originally has current assets of $400 and current liabilities of $275. It purchases $108 of inventory with short-term accounts payable. What is its new current ratio? (Round to two decimal places.) O 1.45 None of these is correct. O 1.69 O 1.33arrow_forward
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