1. Profit or loss computation The net sales of Eagle Company in 2020 is P580,000. The cost of goods manufactured is P480,000. The beginning inventories of Goods in Process and Finished goods are P82,000 and P65,000, respectively. The ending inventories are: Goods in Process-P75,000, Finished goods P55,000. The Selling Expenses and General & Administrative Expenses are 5% and 2.5% of Cost of sales, respectively. Required: Compute in good form the net income before tax for the year 2020

1. Profit or loss computation The net sales of Eagle Company in 2020 is P580,000. The cost of goods manufactured is P480,000. The beginning inventories of Goods in Process and Finished goods are P82,000 and P65,000, respectively. The ending inventories are: Goods in Process-P75,000, Finished goods P55,000. The Selling Expenses and General & Administrative Expenses are 5% and 2.5% of Cost of sales, respectively. Required: Compute in good form the net income before tax for the year 2020

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....

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Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
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