Complete the income statement summary using the LIFO method and the periodic inventory system.

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Answer 1

Question

Chapter 7, Problem 7.4P

1.

To determine

Complete the income statement summary using the LIFO method and the periodic inventory system.

2.

To determine

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

3.

To determine

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

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Question 2 U. Richards does not keep his books on the double entry system. His bank summary amount for 2010 is as follows: Balance 1.1.2010 1890 Receipts from $44656 debtors Creditors Loan from U. Miller $2.000 Rates Rent Drawings Cash withdrawn from bank $540 0 Payment to Trade $316 95 2750 1316 3095 1642 Sundry Expense Records of cash paid were sundry $122, trade creditors $642. Cash sales amounted to cash drawings were $5289. The following information is also available: 31.12.201 31.12.2 0 011 Cash in hand $48 $93 Trade creditors $4896 $5091 Accounts Receivables 60 $71 13 32 Rent Owing $250 Rates in Advance $282 $312 Motor van (at valuation) 2800 2400 Stock 11163 13021 Required: A. Statement of Affairs. (to find opening capital as at 31.12.2010) B. Cash Account & Bank Account. C. Accounts Receivables & Accounts Payables Control A/Cs. D. Income Statement for the year ended 31 December 2011.

2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600. Self-Employment tax = $ 6,440.70 3: Elisa Grant earns net self-employment income of $198,000. She works a second job from which she receives FICA taxable earnings of $100,400. Self-Employment tax = $ 30,294.00

Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable The Lexington Group Unadjusted Trial Balance May 31, 2016 Debit Balances Credit Balances 20,350 37,000 1,100 200 171,175 36,000 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000

Answer 2

Question

Chapter 7, Problem 7.4P

1.

To determine

Complete the income statement summary using the LIFO method and the periodic inventory system.

2.

To determine

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

3.

To determine

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

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Answer 3

Question

Chapter 7, Problem 7.4P

1.

To determine

Complete the income statement summary using the LIFO method and the periodic inventory system.

2.

To determine

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

3.

To determine

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

Expert Solution & Answer

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Answer 4

Question

Chapter 7, Problem 7.4P

1.

To determine

Complete the income statement summary using the LIFO method and the periodic inventory system.

2.

To determine

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

3.

To determine

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 7.4P

1.

To determine

Complete the income statement summary using the LIFO method and the periodic inventory system.

2.

To determine

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

3.

To determine

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

Answer 6

Chapter 7, Problem 7.4P

1.

To determine

Complete the income statement summary using the LIFO method and the periodic inventory system.

Answer 7

Chapter 7, Problem 7.4P

1.

To determine

Complete the income statement summary using the LIFO method and the periodic inventory system.

Answer 8

2.

To determine

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

Answer 9

2.

To determine

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

Answer 10

3.

To determine

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

Answer 11

3.

To determine

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 7 - Why is inventory an important item to both...Ch. 7 - Prob. 2Q Ch. 7 - Prob. 3Q Ch. 7 - Prob. 4Q Ch. 7 - Prob. 5Q Ch. 7 - The chapter discussed tour inventory costing...Ch. 7 - Prob. 7Q Ch. 7 - Contrast the effects of LIFO versus FIFO on...Ch. 7 - Contrast the income statement effect of LIFO...Ch. 7 - Prob. 10Q

Complete the income statement summary using the LIFO method and the periodic inventory system.

Solution Summary: The author explains the LIFO method and periodic inventory system.

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Complete the income statement summary using the LIFO method and the periodic inventory system.

Restate the income statement using the LIFO method, assuming that the purchase is made on December 31.

Describe the amount of pretax income change because of the decision on December 31, also explain is there any evidence of income manipulation.

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Chapter 7 Solutions