Attempt in ProgressYour answer is partially correct.Ayayai Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company'smerchandise was marked down in 2024 and, because there was no beginning inventory, its ending inventory for 2024 of$31,476 would have been the same under either the conventional retail system or the LIFO retail system.On December 31, 2025, the store management considers adopting the LIFO retail system and desires to know how the December 31,2025, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shownbelow. There has been no change in the price level.Inventory, Jan. 1, 2025Markdowns (net)Markups (net)Purchases (net)Sales (net)(b)Cost$31,476112,580Retail$51,60011,18018,920153,080143,620Determine the cost of the 2025 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Roundratios for computational purposes to 2 decimal place, e.g. 78.72% and final answers to 0 decimal places, e.g. 28,987.)Ending inventory LIFO retail methodEnding inventory using conventional retail method$1944328

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Description: Attempt in ProgressYour answer is partially correct.Ayayai Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company'smerchandise was marked down in 2024 and, because there was no beginning i

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Accounting

Ayayai Company began operations o

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

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 13RE: Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a...

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Borys Companys periodic inventory at December 31, 2019, is understated by 10,000, but purchases are correct. Johnson correctly values its 2020 ending inventory. What is the effect of this error on Boryss 2019 and 2020 financial statements?
Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?
Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical count. During 2020, the company discovered that the correct inventory value at the end of 2019 should have been 400,000 because it made a counting error. Upon discovery of this error in 2020, what correcting journal entry will Manny make? Ignore income taxes.
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Blue Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company's merchandise was marked down in 2024 and, because there was no beginning inventory, its ending inventory for 2024 of $48,360 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2025, the store management considers adopting the LIFO retail system and desires to know how the December 31. 2025, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Inventory, Jan. 1, 2025 Markdowns (net) Markups (net) Purchases (net) Sales (net) (a) Cost $48.360 (b) 170.220 Retail $78,000 16.900 Determine the cost of the 2025 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2 decimal place, eg. 78.72% and final answers…
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