Vibrant Company had $950,000 of sales in each of three consecutive years 2016–2018, and it purchased...
Vibrant Company had $950,000 of sales in each of three
consecutive years 2016–2018, and it purchased merchandise costing
$525,000 in each of those years. It also maintained a $250,000
physical inventory from the beginning to the end of that three-year
period. In accounting for inventory, it made an error at the end of
year 2016 that caused its year-end 2016 inventory to appear on its
statements as $230,000 rather than the correct $250,000.
Required:
1. Determine the correct amount of the company’s gross
profit in each of the years 2016–2018.
2. Prepare comparative income statements to show
the effect of this error on the company's cost of goods sold and
gross profit for each of the years 2016−2018.
Determine the correct amount of the company's gross profit in each of the years 2016−2018.
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Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016−2018.
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Homework Answers
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Vibrant Company had $950,000 of sales in each of three
consecutive years 2016–2018, and it purchased...
Vibrant Company had $930,000 of sales in each of three consecutive years 2016-2018, and it purchased...
Vibrant Company had $930,000 of sales in each of three consecutive years 2016-2018, and it purchased merchandise costing $515,000 in each of those years. It also maintained a $230,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $210,000 rather than the correct $230,000. Required: 1. Determine the correct amount of...
Vibrant Company had $1,050,000 of sales in each of three consecutive years 2016–2018, and it purchased...
Vibrant Company had $1,050,000 of sales in each of three
consecutive years 2016–2018, and it purchased merchandise costing
$575,000 in each of those years. It also maintained a $350,000
physical inventory from the beginning to the end of that three-year
period. In accounting for inventory, it made an error at the end of
year 2016 that caused its year-end 2016 inventory to appear on its
statements as $330,000 rather than the correct $350,000.
1. Determine the correct amount of the...
Chapter 6 Homework mework Vibrant Company had $1,090,000 of sales in each of three consecutive years...
Chapter 6 Homework mework Vibrant Company had $1,090,000 of sales in each of three consecutive years 2016-2018, and it purchased merchandise costing $595,000 In each of those years. It also maintained a $390,000 physical Inventory from the beginning to the end of that three-year perlod. In accounting for inventory, t made an error at the end of year 2016 that caused Its year-end 2016 Inventory to appear on its statements as $370,000 rather than the correct $390,000 Required: 1. Determine...
Exercise 5-12 Analysis of inventory errors LO A2 Vibrant Company had $990,000 of sales in each...
Exercise 5-12 Analysis of inventory errors LO A2 Vibrant Company had $990,000 of sales in each of three consecutive years 2016–2018, and it purchased merchandise costing $545,000 in each of those years. It also maintained a $290,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $270,000 rather than the correct...
Exercise 5-12 Analysis of inventory errors LO A2 2016-2018, and it purchased merchandise had $1.000,000 of...
Exercise 5-12 Analysis of inventory errors LO A2 2016-2018, and it purchased merchandise had $1.000,000 of sales in each of three consecutive years 2016-2 Vibrant Company $550000 in each of period. In accounting for inventory, it made an error at the end statements as $280,000 rather than the correct $300,000 those years. It also maintained a $300,000 physical inventory from the beginning to the end of that three-year of year 2016 that caused its year-end 2016 inventory to appear on...
Required information The following information applies to the questions displayed below! Laker Company reported the following...
Required information The following information applies to the questions displayed below! Laker Company reported the following January purchases and sales data for its only product. Activities Jan. 1 Beginning inventory Jan 10 Sales Jan, 20 Purchase zon, 25 sales. Units Acquired at Cost Units sold at Retail 190 its 56.0 840 100 units $15 60 units @ $5.00 80 units $15 110 units $4.50 380 units $1.950 Required: The Company uses a periodic inventory system. For specific identification, ending inventory...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies Its Inventory costing method at the time of each sale, as if It uses a perpetual Inventory system. Assume its accounting records provided the following Information at the end of the annual accounting period, December 31. Units 2,950 Unit Cost $ 50 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($199 each) c. Purchase, May...
Partial income statements for Sherwood Company summarized for a four-year period show the following: Net Sales...
Partial income statements for Sherwood Company summarized for a four-year period show the following: Net Sales Cost of Goods Sold Gross Profit 2015 $1,500,000 1,125,000 $ 375,000 2016 $1,900,000 1,406,000 $ 494,000 2017 $2,000,000 1,520,000 $ 480,000 2018 $2,500,000 1,875,000 $ 625,000 An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $15,000 on December 31, 2017, was accurately stated. The company uses a periodic inventory system. Required: 1. Restate the partial income statements...
KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2018, 2017, and 2016 2018 2017...
KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2018, 2017, and 2016 2018 2017 2016 sales $389,743 $298,575 $207,200 Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense 234,625 188,401 110,174 41,203 26,275 67,478 42,696 8,753 132,608 155,118 55, 344 35,077 90,421 64,697 12,034 74,592 27,350 17,198 44,548 30,044 6,099 Net income $ 52,663 $ 33,943 $ 23,945 KORBIN COMPANY Comparative Balance Sheets December 31, 2018, 2017, and 2016...
An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by...
An audit revealed that in determining these amounts, the ending
inventory for 2016 was overstated by $22,000. The inventory balance
on December 31, 2017, was accurately stated. The company uses a
periodic inventory system.
Required:
1. Restate the partial income statements to
reflect the correct amounts, after fixing the inventory error.
2-a. Compute the gross profit percentage for
each year (a) before the correction and (b) after
the correction.
2-b. Does the pattern of gross profit
percentages lend confidence to...
Vibrant Company had $930,000 of sales in each of three consecutive years 2016-2018, and it purchased merchandise costing $515,000 in each of those years. It also maintained a $230,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $210,000 rather than the correct $230,000. Required: 1. Determine the correct amount of...
Vibrant Company had $1,050,000 of sales in each of three
consecutive years 2016–2018, and it purchased merchandise costing
$575,000 in each of those years. It also maintained a $350,000
physical inventory from the beginning to the end of that three-year
period. In accounting for inventory, it made an error at the end of
year 2016 that caused its year-end 2016 inventory to appear on its
statements as $330,000 rather than the correct $350,000.
1. Determine the correct amount of the...
Chapter 6 Homework mework Vibrant Company had $1,090,000 of sales in each of three consecutive years 2016-2018, and it purchased merchandise costing $595,000 In each of those years. It also maintained a $390,000 physical Inventory from the beginning to the end of that three-year perlod. In accounting for inventory, t made an error at the end of year 2016 that caused Its year-end 2016 Inventory to appear on its statements as $370,000 rather than the correct $390,000 Required: 1. Determine...
Exercise 5-12 Analysis of inventory errors LO A2 2016-2018, and it purchased merchandise had $1.000,000 of sales in each of three consecutive years 2016-2 Vibrant Company $550000 in each of period. In accounting for inventory, it made an error at the end statements as $280,000 rather than the correct $300,000 those years. It also maintained a $300,000 physical inventory from the beginning to the end of that three-year of year 2016 that caused its year-end 2016 inventory to appear on...
Required information The following information applies to the questions displayed below! Laker Company reported the following January purchases and sales data for its only product. Activities Jan. 1 Beginning inventory Jan 10 Sales Jan, 20 Purchase zon, 25 sales. Units Acquired at Cost Units sold at Retail 190 its 56.0 840 100 units $15 60 units @ $5.00 80 units $15 110 units $4.50 380 units $1.950 Required: The Company uses a periodic inventory system. For specific identification, ending inventory...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies Its Inventory costing method at the time of each sale, as if It uses a perpetual Inventory system. Assume its accounting records provided the following Information at the end of the annual accounting period, December 31. Units 2,950 Unit Cost $ 50 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($199 each) c. Purchase, May...
Partial income statements for Sherwood Company summarized for a four-year period show the following: Net Sales Cost of Goods Sold Gross Profit 2015 $1,500,000 1,125,000 $ 375,000 2016 $1,900,000 1,406,000 $ 494,000 2017 $2,000,000 1,520,000 $ 480,000 2018 $2,500,000 1,875,000 $ 625,000 An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $15,000 on December 31, 2017, was accurately stated. The company uses a periodic inventory system. Required: 1. Restate the partial income statements...
KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2018, 2017, and 2016 2018 2017 2016 sales $389,743 $298,575 $207,200 Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense 234,625 188,401 110,174 41,203 26,275 67,478 42,696 8,753 132,608 155,118 55, 344 35,077 90,421 64,697 12,034 74,592 27,350 17,198 44,548 30,044 6,099 Net income $ 52,663 $ 33,943 $ 23,945 KORBIN COMPANY Comparative Balance Sheets December 31, 2018, 2017, and 2016...
An audit revealed that in determining these amounts, the ending
inventory for 2016 was overstated by $22,000. The inventory balance
on December 31, 2017, was accurately stated. The company uses a
periodic inventory system.
Required:
1. Restate the partial income statements to
reflect the correct amounts, after fixing the inventory error.
2-a. Compute the gross profit percentage for
each year (a) before the correction and (b) after
the correction.
2-b. Does the pattern of gross profit
percentages lend confidence to...
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