Inventory turnover ratio : This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period. Formula: Inventory turnover = Cost of goods sold Average inventory Days in inventory: Days in inventory are used to determine number of days a particular company takes to make sales of the inventory available with them. Formula: Days' in inventory = Days in accounting period Inventory turnover LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting. To compute: The inventory turnover and days in inventory of Company G.

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Answer 1

Question

Chapter 6, Problem 6.7AP

(a)

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period.

Formula:

Inventory turnover = Cost of goods soldAverage inventory

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

Formula:

Days' in inventory=Days in accounting periodInventory turnover

LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting.

To compute: The inventory turnover and days in inventory of Company G.

(b)

To determine

To compute: The current ratio using the data.

(c)

To determine

To compute: The current ratio after adjusting the LIFO reserve.

(d)

To determine

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

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Hi expert please give me answer general accounting question

L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: Assume another customer has returned a pair of duck boots (original cost $109) to L.L. Bean. What journal entry would L.L. Bean make to process the return and refund the original purchase price to the customer?

Kreeps Corporation produces a single product

Answer 2

Question

Chapter 6, Problem 6.7AP

(a)

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period.

Formula:

Inventory turnover = Cost of goods soldAverage inventory

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

Formula:

Days' in inventory=Days in accounting periodInventory turnover

LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting.

To compute: The inventory turnover and days in inventory of Company G.

(b)

To determine

To compute: The current ratio using the data.

(c)

To determine

To compute: The current ratio after adjusting the LIFO reserve.

(d)

To determine

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.7AP

(a)

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period.

Formula:

Inventory turnover = Cost of goods soldAverage inventory

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

Formula:

Days' in inventory=Days in accounting periodInventory turnover

LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting.

To compute: The inventory turnover and days in inventory of Company G.

(b)

To determine

To compute: The current ratio using the data.

(c)

To determine

To compute: The current ratio after adjusting the LIFO reserve.

(d)

To determine

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 6.7AP

(a)

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period.

Formula:

Inventory turnover = Cost of goods soldAverage inventory

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

Formula:

Days' in inventory=Days in accounting periodInventory turnover

LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting.

To compute: The inventory turnover and days in inventory of Company G.

(b)

To determine

To compute: The current ratio using the data.

(c)

To determine

To compute: The current ratio after adjusting the LIFO reserve.

(d)

To determine

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

Expert Solution & Answer

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See solution

Answer 5

Chapter 6, Problem 6.7AP

(a)

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period.

Formula:

Inventory turnover = Cost of goods soldAverage inventory

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

Formula:

Days' in inventory=Days in accounting periodInventory turnover

LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting.

To compute: The inventory turnover and days in inventory of Company G.

(b)

To determine

To compute: The current ratio using the data.

(c)

To determine

To compute: The current ratio after adjusting the LIFO reserve.

(d)

To determine

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

Answer 6

Chapter 6, Problem 6.7AP

(a)

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period.

Formula:

Inventory turnover = Cost of goods soldAverage inventory

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

Formula:

Days' in inventory=Days in accounting periodInventory turnover

LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting.

To compute: The inventory turnover and days in inventory of Company G.

Answer 7

Chapter 6, Problem 6.7AP

(a)

To determine

Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times a company sells or uses its inventory during an accounting period.

Formula:

Inventory turnover = Cost of goods soldAverage inventory

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

Formula:

Days' in inventory=Days in accounting periodInventory turnover

LIFO (Last-in-first-out) Reserve: It is a contra inventory account that shows the difference between the inventory cost under FIFO (First-in-first-out) and inventory cost under LIFO. This account is recorded when a company uses FIFO method for its inventory valuation but uses LIFO method for financial reporting.

To compute: The inventory turnover and days in inventory of Company G.

Answer 8

(b)

To determine

To compute: The current ratio using the data.

Answer 9

(b)

To determine

To compute: The current ratio using the data.

Answer 10

(c)

To determine

To compute: The current ratio after adjusting the LIFO reserve.

Answer 11

(c)

To determine

To compute: The current ratio after adjusting the LIFO reserve.

Answer 12

(d)

To determine

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

Answer 13

(d)

To determine

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 6 - The key to successful business operations is...Ch. 6 - Prob. 2Q Ch. 6 - What is just-in-time inventory management? What...Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - Prob. 6Q Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - What is the major advantage and major disadvantage...Ch. 6 - The selection of an inventory cost flow method is...

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To compute: The current ratio using the data.

To compute: The current ratio after adjusting the LIFO reserve.

To comment: On the difference between the current ratio based on inventory using LIFO and the current ratio after adjusting for the LIFO reserve.

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