Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period. To Prepare: The correct income statements for the three years.

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Answer 1

Question

Chapter 6, Problem 6.36BP

1.

To determine

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

2.

To determine

To State: Whether each year’s net income before corrections is understated or overstated.

3.

To determine

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times inventory is used or sold during the accounting period. It is calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

To Compute: The inventory turnover ratio, and days’ sales in inventory for Company S.

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Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+ 10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

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Answer 2

Question

Chapter 6, Problem 6.36BP

1.

To determine

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

2.

To determine

To State: Whether each year’s net income before corrections is understated or overstated.

3.

To determine

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times inventory is used or sold during the accounting period. It is calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

To Compute: The inventory turnover ratio, and days’ sales in inventory for Company S.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.36BP

1.

To determine

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

2.

To determine

To State: Whether each year’s net income before corrections is understated or overstated.

3.

To determine

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times inventory is used or sold during the accounting period. It is calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

To Compute: The inventory turnover ratio, and days’ sales in inventory for Company S.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 6.36BP

1.

To determine

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

2.

To determine

To State: Whether each year’s net income before corrections is understated or overstated.

3.

To determine

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times inventory is used or sold during the accounting period. It is calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

To Compute: The inventory turnover ratio, and days’ sales in inventory for Company S.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.36BP

1.

To determine

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

2.

To determine

To State: Whether each year’s net income before corrections is understated or overstated.

3.

To determine

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times inventory is used or sold during the accounting period. It is calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

To Compute: The inventory turnover ratio, and days’ sales in inventory for Company S.

Answer 6

Chapter 6, Problem 6.36BP

1.

To determine

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

Answer 7

Chapter 6, Problem 6.36BP

1.

To determine

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

Answer 8

2.

To determine

To State: Whether each year’s net income before corrections is understated or overstated.

Answer 9

2.

To determine

To State: Whether each year’s net income before corrections is understated or overstated.

Answer 10

3.

To determine

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times inventory is used or sold during the accounting period. It is calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

To Compute: The inventory turnover ratio, and days’ sales in inventory for Company S.

Answer 11

3.

To determine

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times inventory is used or sold during the accounting period. It is calculated by using the following formula:

Inventory turnover = Cost of goods soldAverage inventory

Days’ sales in inventory: Days’ sales in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them.

Days' sales in inventory=Days in accounting periodInventory turnover

To Compute: The inventory turnover ratio, and days’ sales in inventory for Company S.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QC Ch. 6 - At December 31, 2016, Stevenson Company overstated...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period. To Prepare: The correct income statements for the three years.

Solution Summary: The author presents the correct income statements for the three years.

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Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

To Prepare: The correct income statements for the three years.

To State: Whether each year’s net income before corrections is understated or overstated.

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Chapter 6 Solutions