During a recession, a manufacturing company using a perpetual inventory system wrote down its inventory that cost $5.0 million to the net realizable value of $4.5 million. Two years later this inventory was still available for sale; however, its net realizable value had increased to $5.5 million. Using the LCNRV rule, what is the correct journal entry to record this change in value? Select answer from the options below Debit: Cost of Goods Sold, $1 million; Credit: Gain on Inventory Valuation, $1 million Debit: Inventory, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Gain on Inventory Valuation, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Inventory, $1 million; Credit: Gain on Inventory Valuation, $1 million

During a recession, a manufacturing company using a perpetual inventory system wrote down its inventory that cost $5.0 million to the net realizable value of $4.5 million. Two years later this inventory was still available for sale; however, its net realizable value had increased to $5.5 million. Using the LCNRV rule, what is the correct journal entry to record this change in value? Select answer from the options below Debit: Cost of Goods Sold, $1 million; Credit: Gain on Inventory Valuation, $1 million Debit: Inventory, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Gain on Inventory Valuation, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Inventory, $1 million; Credit: Gain on Inventory Valuation, $1 million

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Swing Ltd uses FIFO for its inventory, which is valued at $21,000. It is considering a change to moving weighted average, which would change the valuation of inventory to $22,500. Which of the following would be decreased by the change? a. Cost of goods sold b. Sales c. Liabilities d. Withdrawals 2. Which of the following is NOT an accounting method that could be chosen by a company to increase reported profits in a particular year? a. Understating allowance for doubtful debts b. Classifying longer-term receivables as current assets c. Changing estimates of the useful life of plant and equipment d. Changing inventory valuation method 3. Which of the following statements about the use of the FIFO assumption is NOT true? a. The FIFO assumption assigns the more recent purchase costs to the balance sheet inventory asset account. b. The FIFO assumption is not affected by the inventory control method. c. In periods of rising prices it produces a higher profit than…
If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would be shown as ending inventory under (1) FIFO. (2) LIFO and (3) Average-cost? (Round average cost per unit to 4 decimal places, e.g. 2.7621 and final answers to 0 decimal places, e.g. 6,548.) Ending Inventory $ (1) FIFO S (2) LIFO $ (3) Average-cost
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Apply mathematical skills around cost structures and appropriate equations to answer the following, inclusive of all associated workings to maximise marks: The inventory value for the financial statements of Zyon for the year ended 31st Oct 2022 was based on an inventory count on 3rd Nov 2022, which gave a total inventory value of $836,200.Between 31st Oct and 3rd Nov, the following transactions took place:Purchases of goods $8,600. Sales of goods (profit margin 35% on sales $14,000). Goods returned by Zyon to supplier $878. What adjusted figure should be included in the financial statements for inventories at 31st Oct 2022 to nearest hundred?
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The following information was available for Bramble Company at December 31, 2020: beginning inventory $4000; ending inventory $96000; cost of goods sold $2500000; and sales $1280000. Bramble's days in inventory in 2020 was O 0.6 days. O 14.3 days. O 7.3 days. O 14.0 days. Save for Later Attempts: 0 of 1 used Submit Answer
If Wakowski Company's ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any? If no entry is required, select "None" and leave the amount boxes blank. Balance Sheet: Merchandise Inventory $4 Current Assets Total Assets Retained Earnings Income Statement: Cost of Goods Sold Gross Profit/Gross Margin Net Income
Presented below is information related to Headland Enterprises. Inventory at cost Inventory at LCNRV Purchases for the month Sales for the month *(a) Sales Revenue Cost of Goods Sold Inventory, Beginning Purchases Cost of Goods Available Jan. 31 Inventory, Ending Cost of Goods Sold Gross Profit $18,300 17,690 Feb. 28 $18,422 15,372 20,740 35,380 Gain (loss) due to Market Fluctuations of Inventory Your answer is partially correct. Try again. From the information, prepare (as far as the data permit) monthly income statements in columnar form for February, March, and April. The inventory is to be shown in the statement at cost; the gain or loss due to market fluctuations is to be shown separately (using a valuation account). (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) February $35380 [18300 20740 139040 [18422 20618 [14762 +2440 Mar. 31 $12322 $20,740 19,032 29,280 42,700 Apr. 30 March -1048 143466 $17,080 16,226 32,330…