INTERM.ACCT.:REPORTING...-CENGAGENOWV2
3rd Edition
ISBN: 9781337909358
Author: WAHLEN
Publisher: CENGAGE L
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Textbook Question
Chapter 22, Problem
Kraft Manufacturing Company manufactures two products: Mult and Tran. At December 31, 2019, Kraft used the FIFO inventory method. Effective January 1, 2020, Kraft changed to the LIFO inventory method. The cumulative effect of this change is not determinable, and, as a result, the ending inventory of 2019, for which the FIFO method was used, is also the beginning inventory for 2020 for the LIFO method. Any layers added during 2020 should be costed by reference to the first acquisitions of 2020, and any layers liquidated during 2020 should be considered a permanent liquidation.
The following information was available from Kraft’s inventory records for the two most recent years:
Required:
Compute the effect on income before income taxes for the year ended December 31, 2020, resulting from the change from the FIFO to the LIFO inventory method.
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Will Company began operations late in 2019 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2019 and no markdowns during 2019, the ending inventory for 2019 was $52,000 under both the conventional retail method and the LIFO retail method. At the end of 2020, management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2020. The following data are available for computations: Cost Retail Inventory, January 1, 2020 $52,000 $70,000 Sales 240,000 Net markups 2,000 Net markdowns 8,600 Purchases 191,000 268,000 Freight-in 12,500 Estimated theft (abnormal) 2,000
Compute the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method.
Telamark Company uses the moving weighted average method for Inventory costing.
Required:
The following Incomplete inventory sheet regarding Product W506 is avallable for the month of March 2020. Complete the Inventory
sheet. (Use the value of the ending Inventory as your bese number and adjust the COGS $ amount to the requlred amount to
make the Total Goods Avallable for Sale to the total of the Velue of the ending Inventory and the COGS total. Negative value
should be Indicated with minus sign. Round your Intermediate and final answers to 2 decimal places.)
Purchases/Transportation-In/
(PurchaseReturns/Discounts)
Cost of Goods Sold/(Returns to
Inventory)
Balance in Inventory
Units
Avg
Cost/Unit
Date
Units
Cost/Unit
Total $
Units Cost/Unit
Total $
Total $
Mar. 1
Brought Forward
60
94.00
5,640.00
2
35
98.00
3
22
4
(2)
7
65
17
40
97.00
28
43
Totals
Goods Available for Sale
Goods Sold
Ending Inventory
Telamark Company uses the moving welghted average method for Inventory costing.
Required:
The following Incomplete inventory sheet regarding Product W506 Is avallable for the month of March 2020. Complete the Inventory
sheet. (Use the value of the ending Inventory as your base number and adjust the COGS $ amount to the required amount to
make the Total Goods Avallable for Sale to the total of the Value of the ending Inventory and the COGS total. Negative value
should be indicated with minus sign. Round your Intermedilate and final answers to 2 decimal places.)
Purchases/Transportation-In/
(PurchaseReturns/Discounts)
Cost of Goods Sold/(Returns to
Inventory)
Balance in Inventory
Avg
Cost/Unit
Date
Units
Cost/Unit
Total S
Units Cost/Unit
Total $
Units
Total S
Mar. 1
Brought Forward
5.640.00
60
94.00
2
35
96.00
3
22
4
(2)
7
65
17
40
97.00
28
43
Totals
Ending Inventory
Goods Available for Sale
Goods Sold
Chapter 22 Solutions
INTERM.ACCT.:REPORTING...-CENGAGENOWV2
Ch. 22 - Prob. 1GICh. 22 - Prob. 2GICh. 22 - Prob. 3GICh. 22 - What steps are necessary to apply the...Ch. 22 - Prob. 5GICh. 22 - Prob. 6GICh. 22 - Prob. 7GICh. 22 - Prob. 8GICh. 22 - Define a change in estimate. What is the proper...Ch. 22 - Prob. 10GI
Ch. 22 - How is a change in depreciation method accounted...Ch. 22 - Describe a change in a reporting entity. How does...Ch. 22 - Prob. 13GICh. 22 - Prob. 14GICh. 22 - Prob. 15GICh. 22 - Prob. 16GICh. 22 - Prob. 17GICh. 22 - Prob. 18GICh. 22 - Prob. 19GICh. 22 - Prob. 20GICh. 22 - The cumulative effect of an accounting change...Ch. 22 - When a change in accounting principle is made...Ch. 22 - Prob. 3MCCh. 22 - A change in the expected service life of an asset...Ch. 22 - During 2019, White Company determined that...Ch. 22 - Generally, how should a change in accounting...Ch. 22 - On January 2, 2017, Garr Company acquired...Ch. 22 - A company has included in its consolidated...Ch. 22 - Shannon Corporation began operations on January 1,...Ch. 22 - Shannon Corporation began operations on January 1,...Ch. 22 - Prob. 1RECh. 22 - Heller Company began operations in 2019 and used...Ch. 22 - Refer to RE22-2. Assume the pretax cumulative...Ch. 22 - Refer to RE22-2. Assume Heller Company had sales...Ch. 22 - Bloom Company had beginning unadjusted retained...Ch. 22 - Suppose that Blake Companys total pretax...Ch. 22 - Bliss Company owns an asset with an estimated life...Ch. 22 - At the end of 2019, Framber Company received 8,000...Ch. 22 - At the end of 2019, Cortex Company failed to...Ch. 22 - At the end of 2019, Jayrad Company paid 6,000 for...Ch. 22 - At the end of 2019, Manny Company recorded its...Ch. 22 - Abrat Company failed to accrue an allowance for...Ch. 22 - The following are independent events: a. Changed...Ch. 22 - Prob. 2ECh. 22 - The following are independent events: a. A...Ch. 22 - Change in Inventory Cost Flow Assumption At the...Ch. 22 - Fava Company began operations in 2018 and used the...Ch. 22 - Berg Company began operations on January 1, 2019,...Ch. 22 - Prob. 7ECh. 22 - In 2020, Frost Company, which began operations in...Ch. 22 - Gundrum Company purchased equipment on January 1,...Ch. 22 - Prob. 10ECh. 22 - On January 1, 2014, Klinefelter Company purchased...Ch. 22 - The following are independent errors made by a...Ch. 22 - The following are independent errors made by a...Ch. 22 - Refer to the information in E22-13. Required:...Ch. 22 - The following are independent errors: a. In...Ch. 22 - Dudley Company failed to recognize the following...Ch. 22 - Prob. 1PCh. 22 - Prob. 2PCh. 22 - Koopman Company began operations on January 1,...Ch. 22 - Schmidt Company began operations on January 1,...Ch. 22 - Prob. 5PCh. 22 - Kraft Manufacturing Company manufactures two...Ch. 22 - Jackson Company has decided to issue common stock...Ch. 22 - At the beginning of 2020, Holden Companys...Ch. 22 - At the end of 2020, while auditing Sandlin...Ch. 22 - At the beginning of 2020, Tanham Company...Ch. 22 - A review of Anderson Corporations books indicates...Ch. 22 - Prob. 12PCh. 22 - Gray Companys financial statements showed income...Ch. 22 - Prob. 14PCh. 22 - There are three types of accounting changes:...Ch. 22 - Prob. 2CCh. 22 - Berkeley Company, a manufacturer of many different...Ch. 22 - When the FASB issues a new generally accepted...Ch. 22 - It is important in accounting theory to be able to...Ch. 22 - Prob. 6CCh. 22 - Prob. 7CCh. 22 - Prob. 8CCh. 22 - Prob. 9CCh. 22 - Sometimes a business entity may change its method...
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