Chapter 9, Problem 9.16P

A physical inventory or count of inventory should be taken around the _____ to make sure that the quantity of inventory reported in the financial statements is accurate. end of the year beginning of the year middle of the year None of these are correct.

A company that uses the periodic inventory system makes the following errors:                                                                                                                 1. It omits a purchase On credit from the purchases account and the ending inventory.                                                                                                            2. It omits a purchase On credit from the purchases account, but the ending inventory is correct.                                                                                              3. It overstates the ending inventory, but purchases are correct.                        Indicate the effect of the preceding errors on the income statement and the balance sheet of the current and succeeding years.

Jenbright Incorporated adopted the dollar-value LIFO method last year. Last year's ending inventory was $53,700. The ending inventory for the current year at year-end (FIIFO) costs is $98,000 and on a dollar-value LIFO basis is $76,520. Based on this information, prepare the journal entry required to adjust Jenbright's ending inventory from a FIFO to a dollar-value LIFO basis. Prepare the journal entry required to adjust Jenbright's ending inventory from a FIFO to a dollar-value LIFO basis. (Record debits first, then credits. Exclude explanations from any journal entries.) Record the adjusting entry for the current year. Account Year-end

The following information on cost and net realizable value of Martinez Ltd's various inventory categories was gathered at December 31, 2021: Inventory Categories Desktops Tablets and readers Laptops Accessories and parts (a) Inventory Categories Desktops Tablets and readers Your answer is correct. Laptops Cost Accessories and parts Total valuation $348,900 $328,300 167,100 222,300 97,500 Calculate the lower of cost and net realizable value for each inventory category within Martinez's inventory. NRV $ $ 222,500 286,400 94.700 LCNRV 328300 167100 222300 94700 812400

A purchase on credit is recorded twice and not corrected during the year-end physical inventory. Which of the following statements correctly describes the impact of this error? The succeeding year income on the income statement is incorrect because beginning inventory is understated. The succeeding year purchases are understated when the prior year purchases are corrected. The current year income on the income statement is correct because purchases are overstated and ending inventory is overstated. The current year balance sheet ending inventory and accounts payable are understated.

A list of errors is shown below: Show the effects of the errors on the indicated balance sheet and income statement items. Errors Cost ofGoods Sold RetainedEarnings Year-EndWorkingCapital Ending inventory is overstated       Beginning inventory is overstated       Ending inventory is understated       Beginning inventory is understated       Purchases is overstated (recorded twice)       Purchases is understated (not recorded)

At the end of the year, a company has to record an adjusting entry for the amount of sales made in the current year that it expects will be returned in the next year. Assuming the periodic inventory system is used, which of the following adjusting entries would record this estimate? a.Debit Sales Returns and Allowances and credit Merchandise Inventory b.Debit Income Summary and credit Estimated Returns Inventory c.Debit Estimated Returns Inventory and credit Cost of Goods Sold d.Debit Sales Returns and Allowances and credit Customer Refunds Payable

Do you agree with the following statements? Express your opinion on each statement.   An inventory error that causes an understatement (or overstatement) for net income in one accounting period, if not corrected, will cause an overstatement (or understatement) in the next. Since an understatement (overstatement) of one period offsets the overstatement (understatement) in the next, such errors are said to correct themselves.     Market usually means replacement cost of inventory when applied in the LCM.     Cost of goods available for sale equals ending inventory plus cost of sales.

Which of the following statements is correct concerning the operations of a merchandiser who chooses to use a periodic inventory system? O Merchandise inventory is always up to date. The merchandiser is not concerned about inventory shrinkage. Cost of goods sold is recorded when a sale is made. The merchandiser is only allowed to use FIFO to calculate its ending inventory cost. Inventory reported on the balance sheet is adjusted based on a physical inventory count.