Explanation Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a company to sell the goods during the given period. The relationship between inventory and cost of goods sold can be explained by the cost of goods sold model: [ Beginning inventory ] + [ Net purchases ] = [ Cost of goods available for sale ] − [ Ending inventory ] = Cost of goods sold Working note 1: (a) Determine the net purchases for year 2016: Cost of goods sold = [ Beginning inventory ] + [ Net purchases ] − [ Ending inventory ] $ 83 , 500 = $ 38 , 900 + [ Net purchases ] − $ 42 , 100 Net purchases = $ 83 , 500 + $ 42 , 100 − $ 38 , 900 Net purchases = $ 86 , 700 Therefore, the net purchases for the year 2016 are $86,700 . Working note 2: (b) Determine the beginning inventory for year 2017: The ending inventory of $42,100 in year 2016 would be the balance of beginning inventory for the year 2017. Thus, the beginning balance of inventory for the year 2017 is $42,100

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Chapter 7 Solutions

EBK INTERMEDIATE ACCOUNTING: REPORTING

Ch. 7 - Distinguish among the types of inventory accounts...Ch. 7 - Prob. 2GI Ch. 7 - Describe the flow of costs for o merchandising...Ch. 7 - Describe the relationship between cost of goods...Ch. 7 - Explain the differences between the perpetual and...Ch. 7 - Prob. 6GI Ch. 7 - Prob. 7GI Ch. 7 - Prob. 8GI Ch. 7 - Prob. 9GI Ch. 7 - Prob. 10GI

Ch. 7 - Prob. 11GI Ch. 7 - Prob. 12GI Ch. 7 - Prob. 13GI Ch. 7 - Prob. 14GI Ch. 7 - Discuss the LIFO and FIFO cost flow assumptions...Ch. 7 - Prob. 16GI Ch. 7 - Prob. 17GI Ch. 7 - List the acceptable cost flow assumptions under...Ch. 7 - Prob. 19GI Ch. 7 - Describe the double-extension and link-chain...Ch. 7 - Prob. 21GI Ch. 7 - What is the impact of LIFO inventory liquidation...Ch. 7 - Goods on consignment should be included in the...Ch. 7 - Prob. 2MC Ch. 7 - Prob. 3MC Ch. 7 - Prob. 4MC Ch. 7 - Prob. 5MC Ch. 7 - Prob. 6MC Ch. 7 - Prob. 7MC Ch. 7 - Assuming no beginning inventory, what can be said...Ch. 7 - Prob. 9MC Ch. 7 - When the double-extension approach to the...Ch. 7 - On December 31, Pitts Manufacturing Company...Ch. 7 - On January 1, Pope Enterprises inventory was...Ch. 7 - Reid Company uses the periodic inventory system....Ch. 7 - Billings Company uses a periodic inventory system....Ch. 7 - Dani Corporation signed a binding commitment on...Ch. 7 - Prob. 6RE Ch. 7 - Prob. 7RE Ch. 7 - On October 23, Johnson Company purchased 100,000...Ch. 7 - Prob. 9RE Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Jessie Stores uses the periodic system of...Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - Carla Company uses the perpetual inventory system....Ch. 7 - On January 1 of Year 1, Dorso Company adopted the...Ch. 7 - An evaluation of Bryces Bookstores inventory was...Ch. 7 - Inventory Accounts for a Manufacturing Company...Ch. 7 - Prob. 2E Ch. 7 - Perpetual versus Periodic Inventory Systems Graham...Ch. 7 - Determining Net Purchases The following amounts...Ch. 7 - Prob. 5E Ch. 7 - Items Included in Inventory The following are...Ch. 7 - Prob. 7E Ch. 7 - Prob. 8E Ch. 7 - Discounts Nelson Company bought inventory for...Ch. 7 - Alternative Inventory Methods Nevens Company uses...Ch. 7 - Alternative Inventory Methods Park Companys...Ch. 7 - Alternative Inventory Methods Frate Company was...Ch. 7 - LIFO, Perpetual and Periodic Riedel Companys...Ch. 7 - Dollar-Value LIFO A company adopted the LIFO...Ch. 7 - Prob. 15E Ch. 7 - Prob. 16E Ch. 7 - Prob. 17E Ch. 7 - Prob. 18E Ch. 7 - Prob. 19E Ch. 7 - Prob. 20E Ch. 7 - Prob. 1P Ch. 7 - Prob. 2P Ch. 7 - Prob. 3P Ch. 7 - Prob. 4P Ch. 7 - Cost of Goods Sold As an accountant for Lee...Ch. 7 - Alternative Inventory Methods Garrett Company has...Ch. 7 - Totman Company has the following transactions...Ch. 7 - Prob. 8P Ch. 7 - Prob. 9P Ch. 7 - Prob. 10P Ch. 7 - Prob. 11P Ch. 7 - Prob. 12P Ch. 7 - Prob. 13P Ch. 7 - Prob. 14P Ch. 7 - Prob. 15P Ch. 7 - Prob. 16P Ch. 7 - Prob. 17P Ch. 7 - Prob. 18P Ch. 7 - FIFO and LIFO A company may compute inventory...Ch. 7 - Prob. 2C Ch. 7 - In January, Broome Inc. requested and secured...Ch. 7 - Prob. 4C Ch. 7 - Prob. 5C Ch. 7 - Interpretation of GAAP and Ethical Issues Robin...Ch. 7 - Selection of an Inventory Method and Ethical...Ch. 7 - Prob. 8C Ch. 7 - Analyzing Nestls Cash and Receivables Disclosures...Ch. 7 - Fenimore Manufacturing Company uses the average...

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