Cabinets for Less uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2020, the following information was obtained from the inventory records: Ending inventory, FIFO Ending inventory, LIFO Required: Prepare the necessary entry to convert to LIFO at the end of 2020. 2019 $78,850 68,520 2020 $93,210 78,380
Q: Under the perpetual inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at…
A: When inventory is sold or utilized using the FIFO technique, the cost of the oldest products (those…
Q: write me a summary describing federal tax code 183 including important facts,regulations, and…
A: Federal Tax Code 183, also known as the Hobby Loss Rule, is a provision in the U.S. Internal Revenue…
Q: Wawa Food Markets is a convenience store chain located primarily in the Northeast. The company sells…
A: Inventory turnover ratio is calculated by dividing cost of goods sold by average inventory. The…
Q: 46. Akoto Corporation reported pretax book income of $2,000,000. Tax depreciation exceeded book…
A: For income tax purposes, tax depreciation is the systematic allocation of a physical asset's…
Q: Current Attempt in Progress * Your awer is incorrect. The controller is waiting on Blue's budgeted…
A: Budgeting is a technique of computing later periods sales, collections, purchase and payment…
Q: Prepare the entry to record the absorption of Quaney's capital deficiency by the other partners and…
A: A partnership is a formal arrangement by two or more parties to manage and operate a business and…
Q: Windswept, Incorporated 2022 Income Statement (in millions) Net sales Cost of goods sold…
A: The ratio which is used to determine the part of assets financed using the equity of the entity is…
Q: The following information pertains to Pharoah Company. 1. 2. 3. 4. 5. 6. Cash balance per bank, July…
A: BANK RECONCILIATION STATEMENT A bank reconciliation statement is prepared to match the bank balance…
Q: Jane Smith is in the 30 percent personal tax bracket. She is considering investing in HCA (taxable)…
A: After-tax yield is the actual return or yield an investor receives on an investment after accounting…
Q: ! Required information [The following information applies to the questions displayed below.] 14 Trey…
A: LIFO Method :— It is one of the methods of inventory valuation in which it is assumed that recent or…
Q: Clonex Labs, Incorporated, uses the weighted-average method in its process costing system. The…
A: Equivalent Units:Equivalent units represent the number of complete units that could have been…
Q: Sonos, Incorporated designs, develops, manufactures, and sells multi-room audio products. The Sonos…
A: Income statement is a financial statement that records all the income and expenses of the business…
Q: Sage Inc. manufactures cycling equipment. Recently, the vice president of operations of the company…
A: Bonds payable is a type of instrument where by an amount is borrowed for a fixed period with fixed…
Q: The cost of equipment purchased by Oriole, Inc., on June 1, 2025, is $90,300. It is estimated that t…
A: In each accounting period, a portion of the asset's initial cost is recognized as an expenditure on…
Q: P21-5B Forte Company manufactures bicycles and tricycles. For both products, materials are added at…
A: Process costing means where the raw material is passed through different process to become finish…
Q: Birch Company normally produces and sells 49,000 units of RG-6 each month. The selling price is $30…
A: Differential analysis is a method used in business to compare the pros and cons of various options,…
Q: Exercise 1-21 (Algo) Preparing a statement of cash flows LO P2 Also assume the following: a. The…
A: Cash flow statement :— It is one of the financial statements that shows change in cash and cash…
Q: Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments…
A: Cost allocation refers to the distribution of cost of one department to other cost centers or…
Q: Exercise 7-11 (Algo) Second-Stage Allocation and Margin Calculations [LO7-4, LO7-5] Foam Products,…
A: Activity rate is the rate used to allocate manufacturing overhead cost to cost object under the…
Q: Chandler Packaged Treats (CPT) sells a specialty pet food to pet stores. CPT management prides…
A: Lets understand the basicsCost volume profit refers to the method widely used by the management to…
Q: The following are the typical classifications used in a balance sheet a. Current assets b.…
A: Balance sheet shows the financial position of the organisation and it has three sections assets,…
Q: You are the owner of Caché, a chain of women's clothing boutiques. Your state has a sales t total…
A: Sales means selling of product in exchange for money.Sales tax means the tax on the sales or the %…
Q: In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa…
A: Using percentage method, the revenue is recognized on the basis of the percentage work completed…
Q: If the indirect materials and indirect labour amount to R20 000 and R10 000 cost equals R30 000.…
A: Indirect costs refer to expenses incurred by a business that cannot be directly traced to a specific…
Q: CAMPBELL COMPANY Income Statement For the Year Ended December 31, Year 1 ales revenue (7,eee units x…
A: The income statement gives important information about a company's capacity to produce profits,…
Q: AB Ltd.'s gross purchases were $19,600, net purchases account for an average 10% discount on all…
A: Net purchases are defined as the part of total purchases that remain with the company after allowing…
Q: The following transaction occurred during the first month of operations, please indicate what's the…
A: The accounting equation states that everything a company owns (assets) is funded either by debts…
Q: On January 1, Oriole Company had 2800000 shares of $10 par value common stock outstanding. On March…
A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…
Q: Problem 6-18 (Algo) Calculate ending inventory and cost of goods sold for four inventory methods…
A: Last in first out is an inventory valuation method. The last-in-first method follows the policy of…
Q: 58 For a 13-person team, on average, how many overtime hours will each person need to work? 18 230…
A: Overtime refers to the additional hours worked by an employee beyond their regular working hours,…
Q: Ana Dinh used 0.5 to 5 percent of gross profit in determining materiality of $70,000 in her audit of…
A: Materiality in auditing refers to the threshold used to assess the significance of errors,…
Q: Research and Development Expense International Business Machines Corporation (IBM) reported the…
A: The research, development, and engineering expenses are those expenses that are helpful in the…
Q: e transactions for the month of April, assuming the company uses a: - Periodic inventory system
A: Perpetual inventory system as the name suggest keeps record and tracks invnetory on a continous…
Q: Dividing Partnership Income Black and Shannon have decided to form a partnership. They have agreed…
A: Partnership: It is a legal form of business formed by a group of people who conduct and manage the…
Q: Equivalent Units and Product Cost Report-Weighted Average Method The following data (and…
A: Equivalent units means where the some goods remain incomplete at the end of process and we need to…
Q: Calculate unit costs and prepare a cost reconciliation schedule. (Round unit costs to 2 decimal…
A: WEIGHTED AVERAGE METHOD :— Under this method, equivalent units are calculated by adding equivalent…
Q: b. Assume that more than one product is being sold in each of the following four case situations:…
A: Cost volume profit analysis is the technique used by management for decision-making. The methods…
Q: Required information [The following information applies to the questions displayed below.] Marin…
A: In direct method, cost of service departments are directly allocated to production departments. It…
Q: 1. Prepare the schedule of cost of goods manufactured for the current year. 2. Prepare the current…
A: The cost of goods manufactured involves all the costs associated with the production of the…
Q: Problem 6-18 (Algo) Calculate ending inventory and cost of goods sold for four inventory methods…
A: For calculation of the cost of goods sold and cost of ending inventory, we use several methods,FIFO…
Q: 2. TLK Ltd. manufactures small size fans to be used in load shedding areas. Each fan has a…
A: Income statement is one of the financial statements that shows the profitability, total revenue and…
Q: FruAgro Company has average annual gross receipts of $58 million annually. This year, FruAgro earned…
A: Annual Gross Receipt = $58 millionBusiness Interest Income = $3 million Business Interest Expenses =…
Q: Oak Corporation's financial statements for the current year showed the following: Note: Round your…
A: Ratio analysis helps to analyze the financial statements of the company. Management can make…
Q: [The following information applies to the questions displayed below.) Warnerwoods Company uses a…
A: Gross profit is the amount of money earned by the entity after deducting the cost of goods sold from…
Q: Use the following data to calculate the current ratio. Cash and cash equivalents Accounts receivable…
A: Current ratio is calculated by dividing current assets by current liabilities. Current assets are…
Q: Scott company paid $2,800,000 yo acquire all of the common stock of dawn corporation on January 1,…
A: A dividend is an offer that a business delivers to its shareholders, whether it be cash or something…
Q: The following information shows maintenance cost over the last four months. Month January February…
A: VARIABLE COST Variable Cost is a cost that varies with the level of output.Variable costs include…
Q: Given the following information for 2022, what was Giustiniani Industries cash flow from investing…
A: Cash flow statement means the statement which shows the cash inflow and outflow during the specified…
Q: Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based…
A: Activity cost pools are commonly employed in activity-based costing (ABC) systems as a component for…
Q: P21-5B Forte Company manufactures bicycles and tricycles. For both products, materials are added at…
A: Equivalent units means where the some goods remain incomplete at the end of process and we need to…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Grimstad Company uses FIFO for internal reporting purposes and LIFO for financial reporting and income tax purposes. At the end of 2019, the following information was obtained from the inventory records: Required: 1. Prepare the necessary adjusting journal entry assuming that Grimstad converts the accounts to LIFO at the end of 2019. 2. Indicate how Grimstad would disclose the inventory value on its comparative balance sheets prepared at the end of 2019. 3. Next Level By how much would Grimstads cost of goods sold differ in 2019 if it used FIFO for external reporting?The following items were included in Venicio Corporations inventory account on December 31, 2019: What amount should Venicio report as inventory at December 31, 2019? a. 21,000 b. 20,400 c. 26,000 d. 35,000Refer 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.
- Inventory Write-Down The inventories of Berry Company for the years 2019 and 2020 are as follows: Berry uses a perpetual inventory system and the FIFO inventory cost flow assumption. Required: 1. Assume the inventory that existed at the end of 2019 was sold in 2020. Prepare the necessary journal entries at the end of each year to record the correct inventory valuation if Berry uses the: a. direct method b. allowance method 2. Next Level Explain any differences in inventory valuation and income between the two methods.Company is considering purchasing EKC Company. EKCs balance sheet at December 31, 2019, is as follows: At December 31, 2019, Elm discovered the following about EKC: a. No allowance for uncollectible accounts has been established. An allowance of 5,000 is considered appropriate. b. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Elm. The FIFO inventors-valuation of the December 31, 2019, ending inventors-would be 180,000. c. The fair value of the property, plant, and equipment (net) is 730,000. d. The company has an unrecorded patent that is worth 120,000. e. The book values of the current liabilities and bonds payable are the same as their market values. Required: 1. Compute the value of the goodwill if Elm pays 1,350,000 for EKC. 2. Next Level Why would the book value of a companys identifiable net assets differ from its market value?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.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.Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2020, Koopman decided to switch to the average cost inventory method for financial 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 FIFO 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. Koopman is subject to a 21% income tax rate in all years; it pays the income taxes payable of a current year in the first quarter of the next year. Koopman 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, Koopman had cash of 10,000, inventory of 24,000, other assets of 70,800, accounts payable of 4,500, and income taxes payable of 6,000. 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 methods 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.
- 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?Noren Company uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more favorably, Noren Company considers changing the past-due categories as follows. A. Complete each table by filling in the blanks. B. Determine the difference between totals uncollectible. C. Complete the following 2019 comparative income statements for 2019, showing net income changes as a result of the changes to the balance sheet aging method categories. D. Describe the categories change effect on net income and accounts receivable.Effects of an Error in Ending Inventory Waymire Company prepared the partial income statements presented below for 2019 and 2018. During 2020, Waymires accountant discovered that ending inventory for 2018 had been understated by $6,500. Required: 1. Prepare corrected income statements for 2019 and 2018. 2. Prepare a schedule showing each financial statement item affected by the error and the amount of the error for that item (ignore the effect of income taxes). Indicate whether each error is an overstatement (+) or an understatement (-).