Intermediate Accounting
Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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On August 31, 2010, Harvey Co. decided to change from the FIFO periodic inventory system to the weightedaverage periodic inventory system. Harvey is on a calendar year basis. The cumulative effect of the change is determineda. As of January 1, 2010.b. As of August 31, 2010. c. During the eight months ending August 31, 2010, by a weighted-average of the purchases.d. During 2010 by a weighted-average of the purchases.
The following data were extracted from the income statement of Keever Inc.:Current YearPrevious YearSales$919,800$959,200Beginning inventories64,46254,430Cost of goods sold459,900532,900Ending inventories58,26264,462a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in inventory. Round interim calculations to the nearest dollar and the final answers to one decimal place. Assume 365 days a year.Current YearPrevious Year1. Inventory turnover   2. Number of days' sales in inventory days days
For each of the following independent scenarios, indicate the effect of the error (if any) on: i. 2019 net income; ii. 2020 net income; and iii. 2020 closing retained earnings. company uses the periodic system of inventory and its fiscal year-end is December 31. Ignore income tax effects. Consider each of the following independent The scenarios: a. Your analysis of inventory indicates that inventory at the end of 2019 was overstated by $27,000 due to an inventory count error. Inventory at the end of 20 13 was correctly stated. b. Invoices in the amount of $107,000 for inventory received in December 2019 were not entered on the books in 2019. They were recorded as purchases in January 2020 when they were paid. The goods were counted in the 2019 inventory count and included in ending inventory on the 2019 financial statements. c. Goods received on consignment amounting to $89,000 were included in the physical count of goods at the end of 2020 and included in ending inventory on the 2020…
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