INTERMEDIATE ACCOUNTING ACCESS 540 DAY
10th Edition
ISBN: 9781264706327
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 9.1DMP
1.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
The accounting for reporting the warehousing costs related to wholesale inventories.
2.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
Principle of accounting and the amount of wholesale inventories to be reported in
3.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
The treatment of freight-in costs, net markups, and net markdowns.
4.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
The treatment of net markdowns affect on the cost-to-retail percentage.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which of the following statements about merchandisingactivities is true? (More than one answer may be correct.)a. As inventory is purchased, the Inventory Expenseaccount is debited and Cash (or Accounts Payable) iscredited.b. Inventory is recorded as an asset when it is firstpurchased.
c. As inventory is sold, its cost is transferred from the bal-ance sheet to the income statement.
d. As inventory is sold, its cost is transferred from theincome statement to the balance sheet.
Which of the following statements are true regarding Costof Goods Sold?(i) Cost of Goods Sold represents the costs that a company incurred to purchase or produce inventory in thecurrent period.(ii) Cost of Goods Sold is an expense on the incomestatement.(iii) Cost of Goods Sold is affected by the inventorymethod selected by a company (FIFO, LIFO, etc.).a. (i) only c. (ii) and (iii)b. (ii) only d. All of the above.
Which of the following statements is correct?
Group of answer choices
A)Revenue is recognized at the time of shipment when goods are shipped FOB destination.
B)Sales returns and allowances are reported as operating expenses on an income statement.
C)Revenue is recorded when title and risks of ownership transfer to the buyer.
D)Sales discounts are reported as operating expenses on an income statement.
Chapter 9 Solutions
INTERMEDIATE ACCOUNTING ACCESS 540 DAY
Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q
Ch. 9 - Explain the LIFO retail inventory method.Ch. 9 - Discuss the treatment of freight-in, net markups,...Ch. 9 - Explain the difference between the retail...Ch. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Explain the accounting treatment of material...Ch. 9 - Identify any differences between U.S. GAAP and...Ch. 9 - (Based on Appendix 9) Define purchase commitments....Ch. 9 - (Based on Appendix 9) Explain how purchase...Ch. 9 - Lower of cost or net realizable value LO91 Ross...Ch. 9 - Lower of cost or net realizable value LO91 SLR...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.5BECh. 9 - Gross profit method; solving for unknown LO92...Ch. 9 - Retail inventory method; average cost LO93 Kiddie...Ch. 9 - Retail inventory method; LIFO LO93 Refer to the...Ch. 9 - Conventional retail method LO94 Refer to the...Ch. 9 - Conventional retail method LO94 Roberson...Ch. 9 - Lower of cost or net realizable value LO91 Herman...Ch. 9 - Lower of cost or net realizable value LO91 The...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.11ECh. 9 - Concepts; terminology LO91 through LO97 Listed...Ch. 9 - Prob. 9.1PCh. 9 - Prob. 9.3PCh. 9 - Prob. 9.8PCh. 9 - Prob. 9.1DMPCh. 9 - Prob. 9.3DMPCh. 9 - Prob. 9.4DMPCh. 9 - Prob. 9.5DMPCh. 9 - Prob. 9.6DMPCh. 9 - Prob. 9.7DMPCh. 9 - Real World Case 98 Various inventory issues;...Ch. 9 - Prob. 9.9DMPCh. 9 - Judgment Case 910 Inventory errors LO97 Some...Ch. 9 - Prob. 9.12DMPCh. 9 - Prob. 2CCTC
Knowledge Booster
Similar questions
- The following information is taken from a companys records. Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forwardIn accounting for by-products, when the by-products are sold for more than the estimated sales value, the difference is: a. credited to Gain or Loss on Sale of By-Product b. debited to Gain or Loss on Sale of By-Product c. immaterial, so not recorded. d. credited to By-Product Inventory.arrow_forwardWhich of the following statements about FIFO is true? Select one: a. All of the statements are correct b. Cost of goods sold is calculated using the costs of the earliest purchased inventory. c. The value of merchandise inventory is made up of the costs of the most recently purchased inventory. d. Under FIFO, a schedule is used to track the different costs of purchased inventory.arrow_forward
- Which of the following statements is correct in the context of the Income Statement prepared by a Retailer (of Inventory)? Select one: O a. Gross Profit plus Operating Expenses equals Net Profit. O b. Net Sales Revenue minus (Cost of Goods Sold + Operating Expenses) equals Net Profit. O c. Net Sales Revenue minus Operating Expenses equals Gross Profit. O d. Net Sales Revenue minus Cost of Goods Sold equals Net Profit.arrow_forward1. Which of the following accounts is not included in inventory? a. Raw material b. Team c. Finished goods d. Materials 2. Why is inventory included in the net income determination? a. To determine the cost of goods sold b. To determine sales income c. To determine the return of merchandise d. Inventory is not included in the determination of net income 3. Which of the following is a feature of the perpetual inventory system? a. Inventory purchases are debited to the Purchasing account. b. Inventory records are not kept for every item. c. The cost of what is sold is recorded in each sale. d. The cost of goods sold is determined as the quantity of purchases minus the change in inventory.arrow_forward1. Explain the effect of each inventory cost flow method on the company's net income 2. Recommed one method and explain the reasons for your recommendationarrow_forward
- Which of the following statements is incorrect? Select one: a. By using the IFRS, goods shipped on consignment from a seller to another company should be included in the inventory of the seller. b. Many argue that LIFO provides a better matching of current costs against revenue from a financial reporting point of view. c. Both IFRS and GAAP account for inventory acquisitions at historical cost and value inventory at the lower-of-cost-or-net-realizable value subsequent to acquisition. d. Both inventory and net income are higher when companies use LIFO in a period of inflation.arrow_forwardWhich income statement account(s) would be affected by a policy choice at the same time as the inventory balance sheet account. a. Bad debts expense b. Cost of goods sold expense c. Depreciation or amortisation expense d. Sales revenuearrow_forwardRequired: 1. Compute cost of goods sold for each of the two items separately using the FIFO and LIFO inventory costing methods. 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? Complete this aarrow_forward
- . Which of the following figures from a firm’s financial statements should be used as itsflow rate when computing its inventory turns?a. Sales revenueb. Cost of goods soldc. Inventoryd. Net incomearrow_forwardHow would the following transactions affect the current ratio and the acid-test ratio? (a) Purchase of inventory with cash; and (b) sale of inventory for more than its cost. Assume that prior to these transactions the current ratio and acid-test ratio are both less than one.arrow_forwardWhich of the following is not a step in the retail inventory method process? a.Compute the cost of goods available for sale. b.Compute the ending inventory at retail by subtracting sales at retail from goods available for sale at retail. c.Estimate the cost of the ending inventory by multiplying the ending inventory at retail by the cost-to-retail ratio. d.Compute the cost-to-retail ratio.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College