Homework Answers
If other items remain the same, the larger the ending inventory valuation, the higher the reported net income.
Illustration
- Other items remaining the same, the Cost of goods sold decreases as the ending inventory increases.
- As a result, Gross profit increases.
- When gross profit increases and the operating expenses do not change, the net income increases.
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Styles If other items remain the same, the larger the ending inventory valuation, the Group of...
If Sales Price and product costs per unit remain constant, Group of answer choices Gross Margin...
If Sales Price and product costs per unit remain constant, Group of answer choices Gross Margin (gross profit %) will increase as more units are sold Gross Margin (gross profit %) will decrease if we produce more units than we sell Gross Margin (gross profit %) will increase with an increase in Cost of Goods Manufactured Gross Margin (Gross Profit %) will stay the same regardless of volume produced or sold
The gross profit method of determining ending inventory cost Group of answer choices can be used...
The gross profit method of determining ending inventory cost Group of answer choices can be used without taking a physical count of merchandise. requires that a firm keep inventory and purchases data at retail value as well as at cost teguires that the inventory be classified into groups of items of about the same rate of mark on provides accurate information about the number of units in inventory.
other questions have the same options Determine whether each of the following actions in buying, selling,...
other questions have the same options
Determine whether each of the following actions in buying, selling, and accounting for inventories is ethical or unethical. Give your reason for each answer. (Click the icon to view the actions.) 1. In applying the lower-of-cost-and-net-realizable-value rule to inventories, Terre Haute Industries recorded an excessively low net realizable value for its ending inventory. This allowed the company to pay less income tax for the year. This action is because 2. Laminated Photo Film purchased...
Determine the proper carrying value of the following inventory items. Goods Sold Exercise 9-45 Lower-of-Cost-or-Market Valuation...
Determine the proper carrying value of the following inventory
items.
Goods Sold Exercise 9-45 Lower-of-Cost-or-Market Valuation LOS Determine the proper carrying value of the following inventory items. Normal Replacement Cost Sales Price Selling Expenses Profit $2.60 $3.20 $0.45 032 100 Item Product 431...... ................$2.50 Product 432 Product 433............ .. .... 0.54 Product 434.... Product 435........................... 1.69 Product 436................... 203 $0.20 0.07 0.10 0.50 004 1.60 0.04 0.30 Answer Exercise 9-46 Lower-of-Cost-or-Market Valuation LOS
CHAPTER 6 Inventory Costing and Valuation Pro Problem 6-13B Estimating ending inventory-gross profit method LO6 CHECK...
CHAPTER 6 Inventory Costing and Valuation Pro Problem 6-13B Estimating ending inventory-gross profit method LO6 CHECK FIGURE: $81,380.50 The Zeon Company had a flood on July 5, 2020, that destroyed all of its inventory. The salvao records contained the following information: Рон ins $ 737,650 414.900 Sales, January 1 to July 5...... Net merchandise purchased Jan. 1 to July 5......... Additional information was determined from the 2019 annual report: Income statement: $2,122,550 1,337,175 Sales... Cost of goods sold................ Balance sheet:...
Indigo Outdoor Stores Inc. uses a perpetual inventory system and has a beginning inventory, as at April 1, of 152 tents....
Indigo Outdoor Stores Inc. uses a perpetual inventory system and
has a beginning inventory, as at April 1, of 152 tents. This
consists of 50 tents at a cost of $212 each and 102 tents at a cost
of $226 each. During April, the company had the following purchases
and sales of tents:
Purchases Sales
Date Units
Unit Cost
Units Unit Price
Apr. 3
75
$409
10 194
...
How does the retail inventory method establish the lower-of-cost-or-market valuation for ending inventory? 1. The procedure...
How does the retail inventory method establish the lower-of-cost-or-market valuation for ending inventory? 1. The procedure is applied on a cost basis at the unit level. 2. By excluding net markups from the cost-to-retail ratio. 3. By excluding beginning inventory from the cost-to-retail ratio. 4. By excluding net markdowns from the cost-to-retail ratio. The original cost of an inventory item is above the replacement cost and below the net realizable value. The net realizable value less the normal profit margin...
QUESTION 1. Prepare the income statement to reflect lower of cost or net realizable value valuation...
QUESTION
1. Prepare the income statement to reflect
lower of cost or net realizable value valuation of the current year
ending inventory. Apply lower of cost or NRV on an item-by-item
basis. (Round your answers to nearest dollar
amount.)
2. Compare the lower of cost or net realizable
value effect on each amount that was changed on the income
statement in requirement (1). (Decreases should be
indicated by a minus sign.)(Round your answers to nearest dollar
amount.)
Jaffa Company prepared...
Kleiner Merchandising Company Accumulated depreciation $ Beginning inventory Ending Inventory Expenses Net Purchases Net Sales 700...
Kleiner Merchandising Company Accumulated depreciation $ Beginning inventory Ending Inventory Expenses Net Purchases Net Sales 700 8,500 4,500 1,800 9,500 16,500 $ 8. 100 21,000 Krug Service Company Expenses Revenues Cash Prepaid rent Accounts payable Equipment 600 640 200 1.900 Required: a. Compute gross profit, the goods available for sale, and the cost of goods sold for the merchandiser. Hint Not all information may be necessary b. Use the above information from a service company and from a merchandiser to...
Kleiner Merchandising Company Accumulated depreciation $ 700 Beginning inventory 11,500 Ending Inventory 6,900 Expenses 2,100 Net...
Kleiner Merchandising Company Accumulated depreciation $ 700 Beginning inventory 11,500 Ending Inventory 6,900 Expenses 2,100 Net Purchases 14,300 Net Sales 22,500 Krug Service Company Expenses $ 8,700 Revenues 27,000 Cash 700 Prepaid rent 680 Accounts payable Equipment 2,500 200 Required: a. Compute the goods available for sale, the cost of goods sold, and the gross profit for the merchandiser. Hint: Not all information may be necessary. 3. Use the above information from a service company and from a merchandiser to...
The gross profit method of determining ending inventory cost Group of answer choices can be used without taking a physical count of merchandise. requires that a firm keep inventory and purchases data at retail value as well as at cost teguires that the inventory be classified into groups of items of about the same rate of mark on provides accurate information about the number of units in inventory.
other questions have the same options
Determine whether each of the following actions in buying, selling, and accounting for inventories is ethical or unethical. Give your reason for each answer. (Click the icon to view the actions.) 1. In applying the lower-of-cost-and-net-realizable-value rule to inventories, Terre Haute Industries recorded an excessively low net realizable value for its ending inventory. This allowed the company to pay less income tax for the year. This action is because 2. Laminated Photo Film purchased...
Determine the proper carrying value of the following inventory
items.
Goods Sold Exercise 9-45 Lower-of-Cost-or-Market Valuation LOS Determine the proper carrying value of the following inventory items. Normal Replacement Cost Sales Price Selling Expenses Profit $2.60 $3.20 $0.45 032 100 Item Product 431...... ................$2.50 Product 432 Product 433............ .. .... 0.54 Product 434.... Product 435........................... 1.69 Product 436................... 203 $0.20 0.07 0.10 0.50 004 1.60 0.04 0.30 Answer Exercise 9-46 Lower-of-Cost-or-Market Valuation LOS
CHAPTER 6 Inventory Costing and Valuation Pro Problem 6-13B Estimating ending inventory-gross profit method LO6 CHECK FIGURE: $81,380.50 The Zeon Company had a flood on July 5, 2020, that destroyed all of its inventory. The salvao records contained the following information: Рон ins $ 737,650 414.900 Sales, January 1 to July 5...... Net merchandise purchased Jan. 1 to July 5......... Additional information was determined from the 2019 annual report: Income statement: $2,122,550 1,337,175 Sales... Cost of goods sold................ Balance sheet:...
Indigo Outdoor Stores Inc. uses a perpetual inventory system and
has a beginning inventory, as at April 1, of 152 tents. This
consists of 50 tents at a cost of $212 each and 102 tents at a cost
of $226 each. During April, the company had the following purchases
and sales of tents:
Purchases Sales
Date Units
Unit Cost
Units Unit Price
Apr. 3
75
$409
10 194
...
QUESTION
1. Prepare the income statement to reflect
lower of cost or net realizable value valuation of the current year
ending inventory. Apply lower of cost or NRV on an item-by-item
basis. (Round your answers to nearest dollar
amount.)
2. Compare the lower of cost or net realizable
value effect on each amount that was changed on the income
statement in requirement (1). (Decreases should be
indicated by a minus sign.)(Round your answers to nearest dollar
amount.)
Jaffa Company prepared...
Kleiner Merchandising Company Accumulated depreciation $ Beginning inventory Ending Inventory Expenses Net Purchases Net Sales 700 8,500 4,500 1,800 9,500 16,500 $ 8. 100 21,000 Krug Service Company Expenses Revenues Cash Prepaid rent Accounts payable Equipment 600 640 200 1.900 Required: a. Compute gross profit, the goods available for sale, and the cost of goods sold for the merchandiser. Hint Not all information may be necessary b. Use the above information from a service company and from a merchandiser to...
Kleiner Merchandising Company Accumulated depreciation $ 700 Beginning inventory 11,500 Ending Inventory 6,900 Expenses 2,100 Net Purchases 14,300 Net Sales 22,500 Krug Service Company Expenses $ 8,700 Revenues 27,000 Cash 700 Prepaid rent 680 Accounts payable Equipment 2,500 200 Required: a. Compute the goods available for sale, the cost of goods sold, and the gross profit for the merchandiser. Hint: Not all information may be necessary. 3. Use the above information from a service company and from a merchandiser to...
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