Homework Answers
| 1 | YEAR | 2021 | 2020 | 2019 | 2018 | TOTAL | |
| NEW METHOD | AVERAGE COST | 27,400.00 | 27,400.00 | ||||
| OLD METHOD | FIFO | 31,800.00 | 31,800.00 | ||||
| CHANGE | -4,400.00 | - | - | - | -4,400.00 | ||
| NET INCOME | |||||||
| YEAR | 2021 | 2020 | 2019 | 2018 | TOTAL | ||
| FIFO | 31,800.00 | 27,900.00 | 27,100.00 | 26,200.00 | 1,13,000.00 | ||
| CHANGE | 4,400.00 | 4,400.00 | |||||
| NET INCOME | 27,400.00 | 27,900.00 | 27,100.00 | 26,200.00 | 1,08,600.00 | ||
| JOURNAL ENTRIES | |||||||
| DATE | PARTICULARS | DEBIT | CREDIT | ||||
| 1 | PROFIT & LOSS A/C DR. | 4,400.00 | |||||
| TO STOCK A/C | 4,400.00 | ||||||
| (BEING DUE TO CHANGE IN METHOD, INVENTORY VALUE DECREASE, AND PROFIT WERE ALSO DECLINE) | |||||||
| CHANGE FROM THE YEAR 2021, SO DOES'T EFFECT ON PAST DATA | |||||||
| 2 | YEAR | 2021 | 2020 | 2019 | 2018 | TOTAL | |
| NEW METHOD | FIFO | 31,800.00 | 27,900.00 | 27,100.00 | 26,200.00 | 1,13,000.00 | |
| OLD METHOD | LIFO | 23,300.00 | 22,800.00 | 18,400.00 | 20,500.00 | 85,000.00 | |
| CHANGE | 8,500.00 | 5,100.00 | 8,700.00 | 5,700.00 | 28,000.00 | ||
| JOURNAL ENTRIES | |||||||
| DATE | PARTICULARS | DEBIT | CREDIT | ||||
| 1 | STOCK A/C DR. | 28,000.00 | |||||
| TO PROFIT & LOSS A/C | 28,000.00 | ||||||
| (BEING DUE TO CHANGE IN METHOD, INVENTORY VALUE INCREASE, AND PROFIT WERE ALSO INCREASE) | |||||||
| CHANGE FROM THE BEIGNING FROM THE COMPANY | |||||||
| NET INCOME | |||||||
| YEAR | 2021 | 2020 | 2019 | 2018 | TOTAL | ||
| LIFO | 23,300.00 | 22,800.00 | 18,400.00 | 20,500.00 | 85,000.00 | ||
| CHANGE | 8,500.00 | 5,100.00 | 8,700.00 | 5,700.00 | 28,000.00 | ||
| NET INCOME | 31,800.00 | 27,900.00 | 27,100.00 | 26,200.00 | 1,13,000.00 | ||
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Below is the net income of Cheyenne Instrument Co., a private corporation, computed under the three...
*Exercise 22-07 Below is the net income of Carla Instrument Co., a private corporation, computed under...
*Exercise 22-07 Below is the net income of Carla Instrument Co., a private corporation, computed under the three inventory methods using a periodic system. 2018 2019 2020 2021 FIFO $27,400 28,300 31,100 33,500 Average Cost $24,200 23,500 29,100 29,200 LIFO $21,400 19,800 25,700 25,000 (Ignore tax considerations.) (a) Assume that in 2021 Carla decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2021,...
Pharoah Company began operations on January 1, 2015, and uses the average-cost method of pricing ...
Pharoah Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2018. The following information is available for the years 2015–2017. Net Income Computed Using Average-Cost Method FIFO Method LIFO Method 2015 $15,990 $19,120 $12,040 2016 17,880 20,820 14,130 2017 20,090 24,750 16,970 (a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2018. (Credit account...
Sage Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory....
Sage Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,860
$18,810
$12,090
2016
18,010
20,800
14,140
2017
19,970
24,990
16,870
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
Vaughn Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory....
Vaughn Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,900
$19,170
$12,110
2016
17,880
20,980
13,990
2017
20,180
25,060
17,120
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
Exercise 11-16 Presented below is information related to equipment owned by Cheyenne Company at December 31,...
Exercise 11-16 Presented below
is information related to equipment owned by Cheyenne Company at
December 31, 2017. Cost $10,800,000 Accumulated depreciation to
date 1,200,000 Expected future net cash flows 8,400,000 Fair value
5,760,000 Assume that Cheyenne will continue to use this asset in
the future. As of December 31, 2017, the equipment has a remaining
useful life of 5 years. Prepare the journal entry (if any) to
record the impairment of the asset at December 31, 2017. (If no
entry...
Cheyenne Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2015 $306,000...
Cheyenne Corporation had the following tax
information.
Year
Taxable Income
Tax Rate
Taxes Paid
2015
$306,000
34%
$104,040
2016
324,000
29%
93,960
2017
393,000
29%
113,970
In 2018, Cheyenne suffered a net operating loss of $488,000, which
it elected to carry back. The 2018 enacted tax rate is 28%.
Prepare Cheyenne’s entry to record the effect of the loss
carryback. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select...
On December 31, 2017, Cheyenne Company acquired a computer from Plate Corporation by issuing a $548,000...
On December 31, 2017, Cheyenne Company acquired a computer from Plate Corporation by issuing a $548,000 rero-interest-bearing note, payable in lon December 31, 2021. Cheyenne Company's credit rating permits to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year re and a $72,000 salvage value Your answer is correct. Prepare the journal entry for the purchase on December 31, 2017. (Round present value factor calculations to decimal places 1.25124 and the...
On January 1, 2020, Crane Corporation purchased 20% of the common shares of Cheyenne Company for...
On January 1, 2020, Crane Corporation purchased 20% of the common shares of Cheyenne Company for $159,000. During the year, Cheyenne earned net income of $86,000 and paid dividends of $21,500. Prepare the entries for Crane to record the purchase and any additional entries related to this investment in Cheyenne Company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and...
On January 2 2019. Crane Company purchased for 5497.000 cache 10 Interest in Cheyenne Corp (Accounted...
On January 2 2019. Crane Company purchased for 5497.000 cache 10 Interest in Cheyenne Corp (Accounted for alle For Sale investment. The fall value of Creea Investment in Cheyenne securities as follows: December 31, 2019 5558.000, and December 31, 2020, 5510.000.On January 2, 2021, Crane purchased an additional 30% of Cheyenneck for $1,532,000 cash when the book value of Cheyennes et ease was $4154.000. The excess we stributable to depredible sets having a remaining If year During 2019 2020 and...
Presented below is information from Cheyenne Computers Incorporated. July 1 Sold $20,000 of computers to Robertson...
Presented below is information from Cheyenne Computers Incorporated. July 1 Sold $20,000 of computers to Robertson Company with terms 3/15, 1/60. Cheyenne uses the gross method to record cash discounts. Cheyenne estimates allowances of $1,300 will be honored on these sales. 10 Cheyenne received payment from Robertson for the full amount owed from the July transactions. 17 Sold $200,000 in computers and peripherals to The Clark Store with terms of 2/10,n/30. 30 The Clark Store paid Cheyenne for its purchase...
*Exercise 22-07 Below is the net income of Carla Instrument Co., a private corporation, computed under the three inventory methods using a periodic system. 2018 2019 2020 2021 FIFO $27,400 28,300 31,100 33,500 Average Cost $24,200 23,500 29,100 29,200 LIFO $21,400 19,800 25,700 25,000 (Ignore tax considerations.) (a) Assume that in 2021 Carla decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2021,...
Sage Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,860
$18,810
$12,090
2016
18,010
20,800
14,140
2017
19,970
24,990
16,870
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
Vaughn Company began operations on January 1, 2015, and uses the
average-cost method of pricing inventory. Management is
contemplating a change in inventory methods for 2018. The following
information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$15,900
$19,170
$12,110
2016
17,880
20,980
13,990
2017
20,180
25,060
17,120
(a) Prepare the journal entry necessary to record
a change from the average cost method to the FIFO method in 2018.
(Credit account...
Exercise 11-16 Presented below
is information related to equipment owned by Cheyenne Company at
December 31, 2017. Cost $10,800,000 Accumulated depreciation to
date 1,200,000 Expected future net cash flows 8,400,000 Fair value
5,760,000 Assume that Cheyenne will continue to use this asset in
the future. As of December 31, 2017, the equipment has a remaining
useful life of 5 years. Prepare the journal entry (if any) to
record the impairment of the asset at December 31, 2017. (If no
entry...
Cheyenne Corporation had the following tax
information.
Year
Taxable Income
Tax Rate
Taxes Paid
2015
$306,000
34%
$104,040
2016
324,000
29%
93,960
2017
393,000
29%
113,970
In 2018, Cheyenne suffered a net operating loss of $488,000, which
it elected to carry back. The 2018 enacted tax rate is 28%.
Prepare Cheyenne’s entry to record the effect of the loss
carryback. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select...
On December 31, 2017, Cheyenne Company acquired a computer from Plate Corporation by issuing a $548,000 rero-interest-bearing note, payable in lon December 31, 2021. Cheyenne Company's credit rating permits to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year re and a $72,000 salvage value Your answer is correct. Prepare the journal entry for the purchase on December 31, 2017. (Round present value factor calculations to decimal places 1.25124 and the...
On January 1, 2020, Crane Corporation purchased 20% of the common shares of Cheyenne Company for $159,000. During the year, Cheyenne earned net income of $86,000 and paid dividends of $21,500. Prepare the entries for Crane to record the purchase and any additional entries related to this investment in Cheyenne Company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and...
On January 2 2019. Crane Company purchased for 5497.000 cache 10 Interest in Cheyenne Corp (Accounted for alle For Sale investment. The fall value of Creea Investment in Cheyenne securities as follows: December 31, 2019 5558.000, and December 31, 2020, 5510.000.On January 2, 2021, Crane purchased an additional 30% of Cheyenneck for $1,532,000 cash when the book value of Cheyennes et ease was $4154.000. The excess we stributable to depredible sets having a remaining If year During 2019 2020 and...
Presented below is information from Cheyenne Computers Incorporated. July 1 Sold $20,000 of computers to Robertson Company with terms 3/15, 1/60. Cheyenne uses the gross method to record cash discounts. Cheyenne estimates allowances of $1,300 will be honored on these sales. 10 Cheyenne received payment from Robertson for the full amount owed from the July transactions. 17 Sold $200,000 in computers and peripherals to The Clark Store with terms of 2/10,n/30. 30 The Clark Store paid Cheyenne for its purchase...
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