Question

show work as necessary and please be neat

34. McKinnon Enterprises owns a professional ice hockey team, the Rockford Penguins. The company sells season tickets for its upcoming season and receives $960,000 cash. The season starts January 1, 2018, with five home games occurring monthly over the next six months. How much revenue will McKinnon Enterprises recognize from its season ticket sales through the end of April 2018? A) $480,000 B) $640,000 C) $960,000 D) $320,000 E) None of the above 35. Aiello, Inc. had the following inventory in fiscal 2016. The company uses the FIFO method of accounting for inventory. Beginning Inventory, January 1, 2016: 130 units @ $15.00 Purchase 200 units @ $18.00 Purchase 50 units @ $13.50 Purchase 110 units @ $15.75 Ending Inventory, December 31, 2016: 120 units The company's cost of goods sold for fiscal 2016 is: A) $6,090.00 B) $6,045.00 C) $6,157.50 D) $5,305.75 E) None of the above 36. In times of falling prices, choosing LIFO over FIFO as an inventory cost method would affect the financial statements as follows: A) Cost of goods sold will be higher and ending inventory will be lower B) Cost of goods sold will be lower and ending inventory will be lower C) Cost of goods sold will be higher and ending inventory will be higher aD) Cost of goods sold will be lower and ending inventory will be higher E) None of the above 37. The January 28, 2017 (fiscal year 2016) financial statements of Caleres, Inc. reported the following information (in thousands): 2016 $1,517,397 2015 $1,529,527 Cost of sales Inventories, net 585,764 546,745 4,094 LIFO reserve 4,345 The 2016 average days inventory outstanding is: A) 136.2 days B) 133.9 days C) 121.5 days 49.6 days D) E) None of the above

Answer 1

34.B.$640,000.

revenue to be recognised by end of april 2018:

=>$960,000 / 6months * 4 months

=>$640,000.

35.A.$6,090.

number of units sold = beginning inventory + purchases - ending inventory

=>130+200+50+110-120

=>370 units.

since FIFO is used out of 370 units sold:

130 units will be from beginning inventory =130 units *$15.00 =>1,950.

200 units @$18.=>$3600

40 units @$13.50 =>$540.

total cost of goods sold = 1950+3600+540 =>$6,090.

36.D. cost of goods sold will be lower and ending inventory will be Higher.

If LIFO is used and prices are rising, then the cost of goods sold will be lower in comparision to FIFO.

Ending inventory will be higher since goods purchased at higher prices will remain in ending inventory.

37.A136.2 days.

average inventory = (585,764 + 546,745) /2

=>566,254.50.

cost of sales / average inventory =1517397/566254.50

=>2.67970851.

average days inventory outstanding = 365 days / 2.67970851

=>136.2 days.