FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Chapter 4, Problem 13E
a.
To determine
Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.
:
Effect of error on gross marginratio of the business.
b
To determine
Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.
The effect of error on profit margin ratio.
c
To determine
Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.
Effect of error on Acid test ratio.
d
To determine
Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.
Effect of error on the
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In a period of falling prices, the use of which inventory cost flow method would typically result in the highest cost of goods sold?
a. FIFO
b. LIFO
c. Weighted average
d. Specific identification
Which inventory method provides a better matching ofcurrent costs with sales revenue on the income statementbut also results in older values being reported for inventory on the balance sheet?
Which inventory cost flow assumption generally results in the lowest reported amount for cost of goods sold when inventory costs are rising? a. Lower of cost and net realizable value. b. First-in, first-out (FIFO). c. Last-in, first-out (LIFO). d. Weighted-average cost.
Chapter 4 Solutions
FINANCIAL ACCT.FUND.(LOOSELEAF)
Ch. 4 - Prob. 1MCQCh. 4 - A company purchased $4,500 of merchandise on May 1...Ch. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQ
Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQCh. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - Prob. 1QSCh. 4 - Prob. 2QSCh. 4 - Prob. 3QSCh. 4 - Prob. 4QSCh. 4 - Prob. 5QSCh. 4 - Prob. 6QSCh. 4 - Prob. 7QSCh. 4 - Prob. 8QSCh. 4 - Prob. 9QSCh. 4 - Prob. 10QSCh. 4 - Prob. 11QSCh. 4 - Prob. 12QSCh. 4 - Prob. 13QSCh. 4 - Prob. 14QSCh. 4 - Prob. 15QSCh. 4 - Prob. 16QSCh. 4 - Prob. 17QSCh. 4 - Prob. 18QSCh. 4 - Prob. 19QSCh. 4 - Prob. 20QSCh. 4 - Prob. 21QSCh. 4 - Prob. 22QSCh. 4 - Prob. 23QSCh. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Prob. 10ECh. 4 - Computing net sales for multiple-step income...Ch. 4 - Impacts of inventory error on key accounts P3 A...Ch. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Prob. 17ECh. 4 - Prob. 18ECh. 4 - Prob. 19ECh. 4 - Prob. 20ECh. 4 - Prob. 21ECh. 4 - Prob. 22ECh. 4 - Prob. 23ECh. 4 - Prob. 24ECh. 4 - Prob. 25ECh. 4 - Prob. 1PSACh. 4 - Preparing journal entries for merchandising...Ch. 4 - Prob. 3PSACh. 4 - Prob. 4PSACh. 4 - Prob. 5PSACh. 4 - Prob. 1PSBCh. 4 - Prob. 2PSBCh. 4 - Prob. 3PSBCh. 4 - Prob. 4PSBCh. 4 - Prob. 5PSBCh. 4 - Santana Rey created Business Solutions on October...Ch. 4 - Prob. 1GLPCh. 4 - Prob. 2GLPCh. 4 - Prob. 3GLPCh. 4 - Prob. 1AACh. 4 - Prob. 2AACh. 4 - Prob. 3AACh. 4 - Prob. 1BTNCh. 4 - Prob. 2BTNCh. 4 - Prob. 3BTNCh. 4 - Prob. 4BTNCh. 4 - Prob. 5BTNCh. 4 - Prob. 6BTN
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- 0. The inventory evaluation method which does not represent the actual ending inventory value is? a. standard cost b. first-in, first-out (FIFO) c. weighted average d. last-in, first-out (LIFO)arrow_forwardCar Armour sells car wash cleaners. Car Armour uses a perpetual inventory system and made purchases and sales of a particular product in 2020 as follows: Jan. 1 Beginning inventory Jan. 10 Sold Mar. 7 Purchased Mar. 15 Sold July 28 Purchased Oct. 3 Purchased Oct. 5 Sold 110 units @ $ 7.30 80 units @ $15.80 330 units @ $ 6.60 130 units @ $15.80 580 units @ $ 6.40 530 units @ $6.30 710 units @ $15.80 Total goods available for sale Units = = = Cost = Required: 1. Calculate the total goods available for sale (in units and cost). = $ 803.00 1,264.00 2,178.00 2,054.00 3,712.00 3,339.00 11,218.00arrow_forwardWhich of the following, if compared to the other methods for valuing inventory, has a material difference? A. LIFO B: FIFO C: Weighted Average D: Specific Identification.arrow_forward
- Gross profit will result if: Choose operating expenses are less than net income naging inventories sales revenues are greater than operating expenses sales revenues are greater than cost of goods sold operating expenses are greater than cost of goods soldarrow_forwardWhich inventory costing method results in the lowest net income during a period of rising inventory costs? a. Weighted-average b. Specific identification c. First-in, first-out (FIFO) d. Last-in, first-out (LIFO)arrow_forwardUnder the LIFO cost flow assumption during a period ofinflation, which of the following is false? A. Cost of goods sold will be lower than under FIFO B. Gross margin will be lower than under FIFO C. Income tax expense will be lower than under FIFO D. Ending inventory will be lower than under FIFOarrow_forward
- Effect of Cost Changes Complete the following table by indicating whether FIFO or LIFO results in the lower reported amount for each of the three accounting measures. Rising costs Falling costs Lowest Ending Inventory Lowest Cost of Goods Sold Lowest Net Incomearrow_forwardThe work paper in the year of sale to eliminate unrealized intercompany profit in ending: a. Credit to Ending Inventory (Cost of Sales) b. Debit to Ending Inventory (Cost of Sales) c. Debit to Inventory – Balance Sheet d. Credit to Salesarrow_forwardIn accounting for by-products, when the by-products are sold for more than the estimated sales value, the difference is: a. credited to Gain or Loss on Sale of By-Product b. debited to Gain or Loss on Sale of By-Product c. immaterial, so not recorded. d. credited to By-Product Inventory.arrow_forward
- following in the calculation of the goods available for sale 2. To produce an inventory valuation which approximates d. Provides a method for inventory control and facilitates a. Permits entities to avoid taking an annual physical 1. An advantage of the retail inventory method is thet inventory. b. Yields a more accurate measurement of inventom. Hides costs from customers and employees. с. a determination of the periodic inventory. 2. To produce an inventory valuation which approximates the lower of cost and NRV using the retail method, the computation of the ratio of cost to retail should a. Include markup but not markdown b. Include markup and markdown c. Ignore both markup and markdown d. Include markdown but not markup 3. When the conventional retail inventory method is used, markdowns are commonly ignored in the computation of cost to retail ratio because a. There may be no markdowns during the year. b. This tends to give a better approximation of the lower of average cost and net…arrow_forwardWhich of the following is accounted for prospectively? Change in reporting entity. Change in the percentage used to determine warranty expense. Correction of an error. Changes from the weighted-average method of inventory costing to FIFO.arrow_forwardCompute for the cost of ending inventory and cost of goods sold using: a. FIFO - periodic b. Weighted average c. Moving averagearrow_forward
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