Chapter 9, Problem 9.17Q

1. In 2021, Jules Company realized that its ending inventory was understated by P1,500 in 2019. How should Jules Company handle this? a. An adjustment to reduce inventory by P1,500 needs to be made b. An adjustment to increase cost of goods sold by P1,500 needs to be made. c. An adjustment to increase inventory by P1,500 needs to be made d. No adjustment needs to be made.   2. For interim reporting, a gain on disposal of land occurring in the third quarter is  a. Recognized and allocated over the quarters b. Recognized and allocated over four quarters c. Recognized immediately in the third quarter d. Deferred until the annual reporting

For each of the following inventory errors occurring in 2021, determine the effect of the error on 2021's cost of goods sold, net income, and retained earnings using understated (U), overstated (O), or no effect (NE). Assume that the error is not discovered until 2022 and that a periodic inventory system is used. Ignore income taxes. Cost of Goods Sold Retained Net Income Earnings 1. Overstatement of ending inventory U 2. Overstatement of purchases 3. Understatement of beginning inventory 4. Freight-in charges are understated 5 Understatement of ending inventory 6. Understatement of purchases 7. of beginning inventory 8. Understatement of purchases plus understatement of ending inventory by the same amount

For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded (using the loss method) due to the change in Allowance to Reduce Inventory to NRV. (Enter loss using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) The amount of the gain (loss) $

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Taveras Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation. Taveras had used the LIFO method for financial reporting since its inception on January 1, 2018, and had maintained records adequate to apply the FIFO method retrospectively. Taveras concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the balance sheet. The following table presents the effects of the change in accounting principles on inventory and cost of goods sold.   Inventory Determined by Cost of Goods Sold Determined by Date LIFO Method FIFO Method LIFO Method FIFO Method January 1, 2018 $    0 $    0 $      0 $      0 December 31, 2018   100     80     800     820 December 31, 2019   200   240   1,000     940 December 31, 2020   320   390   1,130   1,100 Other information: 1. For each year presented, sales are $3,000 and operating expenses are $1,000. 2.…

1. If ending inventory on December 31, 2019, is overstated, then, a) cost of goods sold for the year ended December 31, 2020, will be understated. b) gross profit for the year ended December 31, 2019, will be understated. c) gross profit for the year ended December 31, 2020, will be understated. d) cost of goods sold for the year ended December 31, 2019, will be overstated.

PLEASE DO NOT REJECT IT I DON'T WANT WASTE MY MONEY HERE AND CHANCES HERE Ferguson Co. decides at the beginning of 2019 to adopt the FIFO method of inventory valuation. Ferguson had used the average-cost method for financial reporting since its inception on January 1, 2017, and had maintained records adequate to apply the FIFO method retrospectively. Ferguson concluded that FIFO is the preferable inventory method because it reflects the current cost of inventory on the statement of financial position. The following table presents the effects of the change in accounting policy on inventory and cost of goods sold.     INVENTORY DETERMINED BY COST OF GOODS SOLD DETERMINED BY DATE AVERAGE-COST METHOD FIFO METHOD AVERAGE-COST METHOD FIFO METHOD January 7, 2017 P 0.00 P 0.00 P 0.00 P 0.00 December 31, 2017 100.00 80.00 800.00 820.00 December 31, 2018 200.00 240.00 1,000.00 940.00 December 31, 2019 320.00 390.00 1,130.00 1,100.00 The balance of retained earnings on December…

Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2021. The following schedule shows year-end inventory balances under the FIFO and average cost methods: Year FIFO Average Cost 2018 $45,100 2019 78,300 2020 83,400 $54,200 71,100 78,300 Required: 1. Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. 2. How much higher or lower would cost of goods sold be in the 2020 revised income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Ignoring income taxes, prepare the 2021 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the adjustment…

If the ending inventory is overstated in the current year: Net income will be understated in the current year. Next year's beginning inventory will also be overstated. Next year's net income will be overstated. Next year's beginning inventory will be understated.