INTERMEDIATE ACCOUNTING ACCESS 540 DAY
10th Edition
ISBN: 9781264706327
Author: SPICELAND
Publisher: MCG
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Chapter 9, Problem 9.5DMP
To determine
Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.
To prepare: a report to the president explaining about the retail method of estimating inventories.
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PARRISH 7-11 RECORDING INVENTORY WITH DISCOUNTS AVAILABLE NET/GROSS
PLEASE READ BELOW AND SOLVE THE FOLLOWING a) and b) questions ***Please answer accurately and thoroughly^***
As a consultant, you specialize in helping companies decide which accounting method to use. Your client Megabucks Company, has just started business. The owners want to know how to use the gross and net methods to record purchases. Megabucks also wants to know which method is best to use. Megabucks uses the Periodic system.
a) Prepare the journal entries under the gross and net methods for the following situtations
10/3 Purchased and received $10000 of merchandise terms 2/10, n/30
10/6 Returned defective mechandise with cost of $600
10/12 Paid $8000 of the merchandise
11/1 Paid for the remainder of the merchandise
b) Describe which method has the most information for management and why that method is more informative
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Part 1
On 12 February, the business premises of World Gamers Ltd was destroyed by flood waters.
The insurance company asked the Owner to prove the inventory loss experienced by the
flood. Records salvaged by the system identified beginning inventory was $128,000, net
sales up to 12 February totalled $430,300. The owner ensured that inventory was marked up
to allow a gross profit of 45%. Net purchases totalled $364,600 and freight inwards
amounted to $5,900.
Required:
Using the Retail Inventory method, determine the amount of World Gamers Ltd claim for the
inventory loss by calculating:
(a) the cost of goods available for sale
(b) the estimated cost of sales
(c) the estimated inventory lost by fire.
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
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