Chapter 16, Problem 16.11DMP

Enter the missing dollar amounts for the income statement for each of the following independent cases. (Hint: In Case B, work from the bottom up.) Net sales revenue Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses Pretax income (loss) Case A $ Case B 7,610 $ 11,080 $ 6,650 4,880 10,270 59 $ 290 1,630 15,090 10,920 1,490 Case C $ 6,120 S 3,820 9,430 13,250 4,420 700 $ (490) $ 1,000

Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Quantity Item A on Hand 37 72 BUD ENDING INVENTORY, CURRENT YEAR Unit Cost When Net Realizable Value Acquired (FIFO) (Market) at Year-End $ 22 51 2223 52 27 62 39 $ 17 47 64 34 Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Item…

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