Due to understated estimated ending inventory of the current period, beginning inventory of the following period will be understated.
Due to understated beginning inventory in the following year, cost of goods sold will be understated in the following year, but gross profit and net income will be overstated.
Second option is correct.
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10 a company understates its ending inventory in the current period brat efect will this have...
77) Given the following data: Ending inventory at cost $24,000 Ending inventory at current net realizable value 23,600 Cost of goods sold (before consideration of the lower-of-cost-and-net-realizable-value rule) 37,000 Which of the following depicts the proper account balance after the application of the lower-of-cost-and-net realizable value rule? A) Cost of goods sold will be $37,400. B) Cost of goods sold will be $36,400. C) Cost of goods sold will be $37,000. D) Ending inventory will be $24,000. 78) Inventory at...
On December 31, 20xx, Jones Company understated ending inventory by $52,000. How does this error affect Cost of Goods Sold and Net Income for 20xx? a.) Overstates Cost of Goods Sold and Net Income for 20xx? b.) Overstates both COGS and Net Income c.) Understates COGS and overstates Net Income d.) Leaves both COGS and Net Income correct because the errors cancel each other
Applying and Analyzing Inventory Costing Methods At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $10. A summary of purchases during the current period follows. During the period. Chen sold 2,800 units. Units Unit Cost Cost Beginning Inventory 1,000 $ 10 $10,000 Purchase # 1 1 ,800 11 19,800 Purchase # 2 0 0 13 10,400 Purchase 3 1,200 15 18,000 la) Assume that Chen uses the first-in, first-out method....
Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period. Units Unit Cost $ 28 Beginning Inventory 100 Purchases: #1 650 24 #2 550 20 #3 200 18 Ending inventory is 350 units. Compute the ending inventory and the cost of goods sold for the current period using (a) first-in, first out, (b) average cost, and (c) last-in, first out. (a) First-in, first-out Ending inventory Cost of goods sold (b) Average cost...
Applying and Analyzing Inventory Costing Methods At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $15. A summary of purchases during the current period follows. During the period, Chen sold 2,800 units. Units Unit Cost Cost Purchase #1 Purchase #2 Purchase #3 Beginning Inventory 1,000 15 $15,000 1,800 800 1,200 14 25,200 16 12,800 19 22,800 (a) Assume that Chen uses the first-in, first-out method. Compute both cost of good...
Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period. Units Unit Cost Beginning Inventory 100 $ 26 Purchases: #1 650 22 #2 550 18 #3 200 16 Ending inventory is 350 units. Compute the ending inventory and the cost of goods sold for the current period using (a) first-in, first out, (b) average cost, and (c) last-in, first out. (a) First-in, first-out Ending inventory Answer Cost of goods sold Answer (b)...
pplying and Analyzing Inventory Costing Methods At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $15. A summary of purchases during the current period follows. During the period, Chen sold 2,800 units. Units Unit Cost Cost Beginning Inventory 1,000 $ 15 $ 15,000 Purchase #1 1,800 14 25,200 Purchase #2 800 16 12,800 Purchase #3 1,200 19 22,800 (a) Assume that Chen uses the first-in, first-out method. Compute both cost...
Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period: Units Unit cost Beginning inventory 100 $49 Purchases #1 650 45 #2 550 41 #3 200 39 Ending inventory at the end of this period is 350 units. Compute the ending inventory and the cost of goods sold for the current period using (a) first-in, first-out, (b) average cost, and (c) last-in, first-out. FIFO Average cost LIFO Cost of goods sold $...
Tee Corporation had beginning inventory of $16,000 and ending inventory of $24,000. Its net sales were $155,000 and net purchases were $89,000. Tee's cost of goods sold for the period is O A. $81,000. O B. $97,000. O C. $58,000. OD. $50,000.
During a period of inflation, using — will approximate a company's current cost of ending inventory. O FIFO O both FIFO and the average cost formula the average cost formula the lower of cost and net realizable value