Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory. Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period. To state: the inventory method that T Corporation uses to value its inventories.

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Answer 1

Question

Chapter 8, Problem 8.CCTC

1.

To determine

Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory.

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period.

To state: the inventory method that T Corporation uses to value its inventories.

2.

To determine

To state: the additional expenditures that the company includes in the initial cost of merchandise.

3.

To determine

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

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Carla Vista Manufacturing Company uses a job order cost system and keeps perpetual inventory records. June 1 Purchased raw materials for $23,600 on account. 8 Raw materials requisitioned by production: $9,440 Direct materials Indirect materials 1,180 Paid factory utilities, $2,478 and repairs for factory equipment, $9,440. 15 25 Incurred $122,000 of factory labor. 25 Time tickets indicated the following: Direct Labor (7,000 hrs x $14 per hr) $98,000 Indirect Labor (3,000 hrs x $8 per hr) 24,000 $122,000 45 25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked. 28 30 Goods costing $18,020 were completed in the factory and were transferred to finished goods inventory. Goods costing $15,020 were sold for $20,020 on account. Prepare journal entries to record the above transactions during the month of June. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit…

PART 2. (22 marks) Mangal Furnishings produce serving trays for the tourist industry in a five-stage process - Cutting & Shaping, Assembly, Sanding, Finishing and Packaging. Upon entering the finishing process, before the trays are stained and polished, a specialized piece of equipment is used to engrave a logo on each tray. After Packaging, the trays are sent to the business warehouse for delivery to customers. The following data relates to the Finishing Process for the month of March during which 3,800 trays valued at $597.90 each were transferred in from the Sanding Process. Other production costs incurred during the month are summarized as follows: Direct Materials Added Direct Manufacturing Wages Hireage cost of specialized logo equipment Manufacturing Overhead $343,380 $830,150 $21,300 $412,100 Process inspection occurs during the process and normally 2% of the trays entering the Finishing process are rejected and sold as scrap to local retailers at $750 each. During the month…

Answer 2

Question

Chapter 8, Problem 8.CCTC

1.

To determine

Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory.

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period.

To state: the inventory method that T Corporation uses to value its inventories.

2.

To determine

To state: the additional expenditures that the company includes in the initial cost of merchandise.

3.

To determine

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 8.CCTC

1.

To determine

Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory.

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period.

To state: the inventory method that T Corporation uses to value its inventories.

2.

To determine

To state: the additional expenditures that the company includes in the initial cost of merchandise.

3.

To determine

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 8, Problem 8.CCTC

1.

To determine

Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory.

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period.

To state: the inventory method that T Corporation uses to value its inventories.

2.

To determine

To state: the additional expenditures that the company includes in the initial cost of merchandise.

3.

To determine

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.CCTC

1.

To determine

Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory.

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period.

To state: the inventory method that T Corporation uses to value its inventories.

2.

To determine

To state: the additional expenditures that the company includes in the initial cost of merchandise.

3.

To determine

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

Answer 6

Chapter 8, Problem 8.CCTC

1.

To determine

Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory.

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period.

To state: the inventory method that T Corporation uses to value its inventories.

Answer 7

Chapter 8, Problem 8.CCTC

1.

To determine

Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during the period which results in the goods available for sale. Then, the estimated cost of goods sold is deducted from the goods available for sale to estimate the ending inventory.

Inventory turnover ratio: This is a financial metric that is used to quantify the number of times the inventory is used or sold during an accounting period.

To state: the inventory method that T Corporation uses to value its inventories.

Answer 8

2.

To determine

To state: the additional expenditures that the company includes in the initial cost of merchandise.

Answer 9

2.

To determine

To state: the additional expenditures that the company includes in the initial cost of merchandise.

Answer 10

3.

To determine

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

Answer 11

3.

To determine

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

Answer 12

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Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

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Solution Summary: The author explains how T Corporation uses the retail inventory method to value its inventories.

To state: the additional expenditures that the company includes in the initial cost of merchandise.

To Calculate: the gross profit ratio and the inventory turnover ratio for the fiscal year ended January 30, 2016, and also compare the ratios.

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Chapter 8 Solutions