Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period. Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization. The various inventory cost flow methods are: First-in, first-out (FIFO) Last in, first-out (LIFO) Average-cost Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost. Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company. To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

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Answer 1

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.6AP

(a)

(1)

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost.

Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

(2)

To determine

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

(3)

To determine

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

(b)

To determine

The method used by companies to justify price increases and the method to support an argument to increase prices.

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Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $7,000, direct labor of $3,400, and applied overhead of $2,890. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on credit) for $26,000, Job 121 is started and completed, and Job 122 is started and still in process at the end of July. Custom Cabinetry incurs the following costs during July. Job 120 Direct materials used Direct labor used $ 2,300 3,400 Job 121 $ 7,100 4,700 Job 122 $ 2,600 3,700 1. Prepare journal entries for the following July transactions and events a through e. a. Direct materials used. b. Direct labor used. c. Overhead applied. d. Sale of Job 120. e. Cost of goods sold for Job 120. Hint. Job 120 has costs from June and July. 2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no jobs in Finished Goods Inventory at June…

Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.6AP

(a)

(1)

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost.

Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

(2)

To determine

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

(3)

To determine

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

(b)

To determine

The method used by companies to justify price increases and the method to support an argument to increase prices.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.6AP

(a)

(1)

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost.

Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

(2)

To determine

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

(3)

To determine

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

(b)

To determine

The method used by companies to justify price increases and the method to support an argument to increase prices.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.6AP

(a)

(1)

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost.

Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

(2)

To determine

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

(3)

To determine

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

(b)

To determine

The method used by companies to justify price increases and the method to support an argument to increase prices.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.6AP

(a)

(1)

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost.

Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

(2)

To determine

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

(3)

To determine

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

(b)

To determine

The method used by companies to justify price increases and the method to support an argument to increase prices.

Answer 6

Chapter 6, Problem 6.6AP

(a)

(1)

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost.

Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

Answer 7

Chapter 6, Problem 6.6AP

(a)

(1)

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Specific identification method: In the identification method of inventory costing, business organization needs to record the each item of inventory at its actual cost.

Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under Specific identification method

Answer 8

(2)

To determine

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

Answer 9

(2)

To determine

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

Answer 10

(3)

To determine

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

Answer 11

(3)

To determine

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

Answer 12

(b)

To determine

The method used by companies to justify price increases and the method to support an argument to increase prices.

Answer 13

(b)

To determine

The method used by companies to justify price increases and the method to support an argument to increase prices.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 6 - Prob. 1Q Ch. 6 - Prob. 2Q Ch. 6 - Prob. 3Q Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - 6. Explain the difference between the terms FOB...Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - 9. “The selection of an inventory cost flow method...Ch. 6 - Prob. 10Q

Concept explainers

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FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

The method used by companies to justify price increases and the method to support an argument to increase prices.

Want to see the full answer?

Chapter 6 Solutions

Concept explainers

Videos

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization. To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization. To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.

The method used by companies to justify price increases and the method to support an argument to increase prices.

Want to see the full answer?

Chapter 6 Solutions

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under FIFO

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization.

To determine: Partial income statement through gross profit and value of ending inventory reported in balance sheet under LIFO.