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Front Range Community College *
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211
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Accounting
Date
Jun 1, 2024
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THE PROCTER & GAMBLE COMPANY
(P&G)
OVERVIEW
In this project case, you research inventory costing and inventory reporting on financial statements.
INSTRUCTIONS
1. The financial statements of P&G are presented in Appendix B and in the WileyPlus Chapter 8 Resources. The Company’s complete annual report, including the notes to the financial statements, is available at P&G Annual Reports
. Refer to P&G’s financial statements and the accompanying notes to address the following: How does P&G value its inventories? Which inventory costing method does P&G use as a basis for reporting its inventories? 2. How does P&G report its inventories in the balance sheet? In the notes to its financial statements, what three descriptions are used to classify its inventories?
3. What costs does P&G include in Inventory and Cost of Products Sold? 4. What was P&G’s inventory turnover in 2014? What is its gross profit percentage?
Evaluate P&G’s inventory turnover and its gross profit percentage. DELIVERABLES
1. A 2-page Word document 2. Double-spaced, Times New Roman 12pt font 3. Properly APA formatted citations and references 4. Save As ACC211_M4Case_firstnamelastname Submit to the Module 4 Case
dropbox. Please see the Case Rubric
and the Course Schedule
in the syllabus module for the grading information and due date associated with this assignment.
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Related Questions
Please explain how to calculate the FIFO and LIFO for the below problem and to prepare the income statement for the FIFO, LIFO and Average cost.Problem:
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1:
Units
Unit Cost
Inventory, December 31, prior year
1,990
$
4
For the current year:
Purchase, March 21
5,130
6
Purchase, August 1
2,920
7
Inventory, December 31, current year
4,050
Required:
Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.)
My calculations are below.
Units
Cost Per Unit
Total Cost
FIFO
LIFO
Average Cost
Beginning inventory
1990
$ 4
$…
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The table below is a summary of inventory for YZ company. Do a descriptive analysis on products in inventory with regards to minimum, maximum and average book value. Advise manager of YZ of the level of inventory at December 31, 2019.
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You are assigned to prepare the financial statements of LIVA
Company for the year 2021. The following data were made
available for you:
Ending Inventory at Cost
739,160
Goods Available for Sale at retail
3,930,000
Sales Discount
16,000
48,500
Net markdowns
Net markups
30,000
Beginning inventory at retail
1,450,000
2,422,000
Purchases at retail
The company adopts the average cost approach to estimate
the value of its inventory and the cost ratio is computed at
68%.
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Assume that Island Solutions applies LCNRV at the individual product level, determine the value of inventory that should be reported on the statement of financial position on September 30, 2023.
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Required:a. Complete a subsidiary ledger record for the computer using each of the three inventory valuation methods listed below
1. Average cost.2. FIFO.3. LIFO.
Your inventory records should show both purchases of this product, the sale on Mar 31, and the balance on hand on Mar 31, 2020.
b. Which of the three cost flow assumptions will result in reporting the lowest net income for the current year? Explain
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Accounting
Compute for the net sales that would be
reported in LIVA company's Income Statement.
You are to be assigned to prepare the financial
statement of LIVA Company for the year 2021.
The following data were made available for you:
Ending Inventory at Cost - 739, 160
Goods Available for Sale at retail - 3, 930, 000
Sales Discount - 16, 000
Net markdowns - 48, 500
Net markups - 30, 000
Beginning inventory at retail - 1, 450, 000
Purchases at retail - 2, 422, 000
The company adopts the average cost approach
to estimate the value of its inventory and the
cost ratio is computed at 68%.
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Colin Davis Machine Company maintains a general ledger account for each class of inventory, debiting such accounts for increases during the period and crediting them for decreases. The transactions below relate to the Raw Materials inventory account, which is debited for materials purchased and credited for materials requisitioned for use.
1. An invoice for $8,100, terms f.o.b. destination, was received and entered January 2, 2020. The receiving report shows that the materials were received December 28, 2019.
2. Materials costing $28,000, shipped f.o.b. destination, were not entered by December 31, 2019, “because they were in a railroad car on the company's siding on that date and had not been unloaded.”
3. Materials costing $7,300 were returned to the supplier on December 29, 2019, and were shipped f.o.b. shipping point. The return was entered on that date, even though the materials are not expected to reach the supplier's place of business until January 6, 2020.
4. An…
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Presented below is information related to Sunland Company. Compute the ending inventory for Sunland Company for 2022 through 2027 using the dollar-value LIFO method.
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Prepare journal entries in the books of Jones company for the year 2007 and 2008 under cost method
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Prepare the necessary journal entries from the following information for Welsh Company, which uses a perpetual
inventory system.
a. Purchased raw materlal on account, P56,700.
b. Requlsitioned raw materlals for production as follows:
• Direct materials: 80 percent of purchases;
Indirect materials: 15 percent of purchases.
C. Direct labor wages of P33,100 are accrued as are indirect labor wages of P12,500.
d. Overhead Incurred and paid for Is PG6,900.
e. Overhead Is applied to production based on 110 percent of direct labor cost.
f. Goods costing P97,600 xere completed during the pertod,
What is the journal entry for Iransadion ()?
a. Work in process inventory
97,600
Finished goods Inventory
97,600
b. Finished goods inventory
Work in process inventary
97,600
97,600
Cost of goods sold
Work In process inventory
C.
97,600
97,600
97,600
d. Work in process inventory
Cost of goods sold
97,600
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Required information
[The following information applies to the questions displayed below.]
Givoly Inc. uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year,
the accounting records provided the following information for product 2:
Units
Unit Cost
6,500
$ 11
Inventory, December 31, prior year
For the current year:
Purchase, March 5
Purchase, September 19
Sale ($28 each)
Sale ($30 each)
Operating expenses (excluding income tax expense)
18,500
9,500
8,300
15,500
$395,000
2. Compute the difference between the pretax income and the ending inventory amounts for the two cases.
Comparison of Amounts
Case A
Case B
FIFO
LIFO
Difference
Pretax income
Ending inventory
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Vermont Resources, which uses the FIFO inventory costing method, has the following account balances at August 31, 2025, prior to
releasing the financial statements for the year:
$
Merchandise Inventory, ending
Cost of Goods Sold
Net Sales Revenue
14,800
67,000
118.000
Date
Aug. 31
Requirement 1. Prepare any adjusting journal entry required from the given information. (Record debits first, then credits. Select the explanation on the last line of the journal entry. For situations that do not require an entry, make sure to select "No entry required" in the first cell in
the "Accounts" column and leave all other cells blank.)
Accounts and Explanation
X
Debit
Credit
C
Requirements
1.
2.
Vermont has determined that the current replacement cost (current market value) of the August 31, 2025, ending merchandise
inventory is $12,500.
Read the requirements.
Prepare any adjusting journal entry required from the information given.
What value would Vermont report on the balance sheet at August 31,…
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Kelley Company has the following information for the year ended December 31, 2024.
(Click the icon to view the information.)
Use the information to prepare a schedule of cost of goods manufactured and an income statement. Assume no indirect materials are used and all amounts are shown in millions.
Begin by preparing a schedule of cost of goods manufactured.
Kelley Company
Schedule of Cost of Goods Manufactured
Year Ended December 31, 2024
(in millions)
Cost of Goods Manufactured
C
Data table
Inventory balances:
Work-in-Process
Finished Goods
Other information:
Sales Revenue
Selling and Administrative Expenses
Direct Labor
Manufacturing Overhead; actual and allocated
Direct Materials Used
Print
Beginning Ending
Done
6
10
$
13
14
215
56
24
22
37
X
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Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).
Prepare an income statement. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.
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Related Questions
- Please explain how to calculate the FIFO and LIFO for the below problem and to prepare the income statement for the FIFO, LIFO and Average cost.Problem: Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year 1,990 $ 4 For the current year: Purchase, March 21 5,130 6 Purchase, August 1 2,920 7 Inventory, December 31, current year 4,050 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.) My calculations are below. Units Cost Per Unit Total Cost FIFO LIFO Average Cost Beginning inventory 1990 $ 4 $…arrow_forwardThe table below is a summary of inventory for YZ company. Do a descriptive analysis on products in inventory with regards to minimum, maximum and average book value. Advise manager of YZ of the level of inventory at December 31, 2019.arrow_forwardYou are assigned to prepare the financial statements of LIVA Company for the year 2021. The following data were made available for you: Ending Inventory at Cost 739,160 Goods Available for Sale at retail 3,930,000 Sales Discount 16,000 48,500 Net markdowns Net markups 30,000 Beginning inventory at retail 1,450,000 2,422,000 Purchases at retail The company adopts the average cost approach to estimate the value of its inventory and the cost ratio is computed at 68%.arrow_forward
- Assume that Island Solutions applies LCNRV at the individual product level, determine the value of inventory that should be reported on the statement of financial position on September 30, 2023.arrow_forwardRequired:a. Complete a subsidiary ledger record for the computer using each of the three inventory valuation methods listed below 1. Average cost.2. FIFO.3. LIFO. Your inventory records should show both purchases of this product, the sale on Mar 31, and the balance on hand on Mar 31, 2020. b. Which of the three cost flow assumptions will result in reporting the lowest net income for the current year? Explainarrow_forwardAccounting Compute for the net sales that would be reported in LIVA company's Income Statement. You are to be assigned to prepare the financial statement of LIVA Company for the year 2021. The following data were made available for you: Ending Inventory at Cost - 739, 160 Goods Available for Sale at retail - 3, 930, 000 Sales Discount - 16, 000 Net markdowns - 48, 500 Net markups - 30, 000 Beginning inventory at retail - 1, 450, 000 Purchases at retail - 2, 422, 000 The company adopts the average cost approach to estimate the value of its inventory and the cost ratio is computed at 68%.arrow_forward
- Colin Davis Machine Company maintains a general ledger account for each class of inventory, debiting such accounts for increases during the period and crediting them for decreases. The transactions below relate to the Raw Materials inventory account, which is debited for materials purchased and credited for materials requisitioned for use. 1. An invoice for $8,100, terms f.o.b. destination, was received and entered January 2, 2020. The receiving report shows that the materials were received December 28, 2019. 2. Materials costing $28,000, shipped f.o.b. destination, were not entered by December 31, 2019, “because they were in a railroad car on the company's siding on that date and had not been unloaded.” 3. Materials costing $7,300 were returned to the supplier on December 29, 2019, and were shipped f.o.b. shipping point. The return was entered on that date, even though the materials are not expected to reach the supplier's place of business until January 6, 2020. 4. An…arrow_forwardPresented below is information related to Sunland Company. Compute the ending inventory for Sunland Company for 2022 through 2027 using the dollar-value LIFO method.arrow_forwardPrepare journal entries in the books of Jones company for the year 2007 and 2008 under cost methodarrow_forward
- Prepare the necessary journal entries from the following information for Welsh Company, which uses a perpetual inventory system. a. Purchased raw materlal on account, P56,700. b. Requlsitioned raw materlals for production as follows: • Direct materials: 80 percent of purchases; Indirect materials: 15 percent of purchases. C. Direct labor wages of P33,100 are accrued as are indirect labor wages of P12,500. d. Overhead Incurred and paid for Is PG6,900. e. Overhead Is applied to production based on 110 percent of direct labor cost. f. Goods costing P97,600 xere completed during the pertod, What is the journal entry for Iransadion ()? a. Work in process inventory 97,600 Finished goods Inventory 97,600 b. Finished goods inventory Work in process inventary 97,600 97,600 Cost of goods sold Work In process inventory C. 97,600 97,600 97,600 d. Work in process inventory Cost of goods sold 97,600arrow_forwardRequired information [The following information applies to the questions displayed below.] Givoly Inc. uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Units Unit Cost 6,500 $ 11 Inventory, December 31, prior year For the current year: Purchase, March 5 Purchase, September 19 Sale ($28 each) Sale ($30 each) Operating expenses (excluding income tax expense) 18,500 9,500 8,300 15,500 $395,000 2. Compute the difference between the pretax income and the ending inventory amounts for the two cases. Comparison of Amounts Case A Case B FIFO LIFO Difference Pretax income Ending inventoryarrow_forwardVermont Resources, which uses the FIFO inventory costing method, has the following account balances at August 31, 2025, prior to releasing the financial statements for the year: $ Merchandise Inventory, ending Cost of Goods Sold Net Sales Revenue 14,800 67,000 118.000 Date Aug. 31 Requirement 1. Prepare any adjusting journal entry required from the given information. (Record debits first, then credits. Select the explanation on the last line of the journal entry. For situations that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.) Accounts and Explanation X Debit Credit C Requirements 1. 2. Vermont has determined that the current replacement cost (current market value) of the August 31, 2025, ending merchandise inventory is $12,500. Read the requirements. Prepare any adjusting journal entry required from the information given. What value would Vermont report on the balance sheet at August 31,…arrow_forward
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