Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 5, Problem 13QS
Exercise 5-13 Physical count error and profits A2
Refer to the information in Exercise 5-12 and indicate whether the failure to include in-transit inventory as part of the physical count results in an overstatement, understatement, or no effect on the following ratios.
a. Gross margin ratio
b. Profit margin ratio C. Acid-test ratio
d.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
QUESTION 11
Match the term on the left to the appropriate description on the right.
v Cost of goods available for sale (COGAS)
A. A valuation rule applied to ending inventory.
v LIFO reserve
B. The maximum value that cost of goods sold (COGS) can be in a period.
C. The amount by which inventory measured under FIFO would exceed inventory
measured under LIFO
v Lower-of-cost-or-market
v Inventory turnover ratio.
D. An inventory cost flow assumption.
E. A measure for evaluating a company's inventory management.
v FIFO (first-in, first out)
v Periodic inventory
F. A system for calculating COGS based on ending inventory value.
Problem 5-4A Periodic: Alternative cost flows P3 Refer to the information in Problem 5-3A and assume the
periodic inventory system is used. Required Analysis Component 1. Compute cost of goods available for
sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3.
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d)
specific identification. (Round all amounts to cents.) 4. Compute gross profit earned by the company for
each of the four costing methods in part 3. 5. The company's manager earns a bonus based on a
percentage of gross profit. Which method of inventory costing produces the highest bonus for the
manager?
Date
Problem 5-3A Perpetual: Alternative cost flows P1
Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and
sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from…
Quèstion 14
Selling expenses DOES NOT include:
OA.
Making sales
OB.
Accounting and Human Resources expense
OC.
Delivering goods to customers
OD.
Advertising expense
Quèstion 16
Net Sales are calculated using:
OA.
Gross sales, sales returns & allowances, sales discount
OB.
Gross sales, cost of good available for sale, cost of goods sold
OC.
Gross sales, cost of goods sold, sales expenses
OD.
Gross sales, cost of sales, purchases
Chapter 5 Solutions
Fundamental Accounting Principles
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - 5. How does a company that uses a perpetual...Ch. 5 - Prob. 6DQCh. 5 - What is the difference between a sales discount...Ch. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - What is the difference between the single-step and...
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Refer to the income statement of Samsung in...Ch. 5 - Prob. 15DQCh. 5 - Applying merchandising terms C1 P1 Enter the...Ch. 5 - Identifying inventory costs C2 Costs of $5.000...Ch. 5 - Merchandise accounts and computations C2 Use the...Ch. 5 - Computing net invoice amounts P1 Compute the...Ch. 5 - Recording purchases, returns, and discounts taken...Ch. 5 - Recording purchases and discounts taken P1 Prepare...Ch. 5 - Recording purchases and discounts missed Pl...Ch. 5 - Recording sales, returns, and discounts taken P2...Ch. 5 - Accounting for shrinkage—perpetual system P3...Ch. 5 - Closing entries P3 Refer to QS 5-9 and prepare...Ch. 5 - Multiple-step income statement P4 For each item...Ch. 5 - Preparing a multiple-step income statement P4...Ch. 5 - Exercise 5-13 Physical count error and profits A2...Ch. 5 - Prob. 14QSCh. 5 - Prob. 15QSCh. 5 - Prob. 16QSCh. 5 - Recording purchases, returns, and...Ch. 5 - Recording sales. returns, and discounts—periodic &...Ch. 5 - Prob. 19QSCh. 5 - Prob. 20QSCh. 5 - Prob. 21QSCh. 5 - Prob. 22QSCh. 5 - QS 5-23 Sales transactions P2
Prepare journal...Ch. 5 - Exercise 5-1 Computing revenues, expenses, and...Ch. 5 - Prob. 2ECh. 5 - Exercise 5-3 Recording purchases, purchases...Ch. 5 - Exercise 5-4 Recording sales, sales returns, and...Ch. 5 - Exercise 5.5 Recording purchases, purchases...Ch. 5 - Exercise 5-6 Recording sales, purchases, and cash...Ch. 5 - Exercise 5-7 Recording sales, purchases, shipping,...Ch. 5 - Exercise 5-8 Inventory and cost of sales...Ch. 5 - Exercise 5-9 Recording purchases, sales, returns,...Ch. 5 - Exercise 5-10 Preparing adjusting and closing...Ch. 5 - Prob. 11ECh. 5 - Exercise 5-12 Impacts of inventory error on key...Ch. 5 - Exercise 5-13 Physical count error and profits...Ch. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - Prob. 20ECh. 5 - Prob. 21ECh. 5 - Prob. 22ECh. 5 - Prob. 23ECh. 5 - Prob. 24ECh. 5 - Prob. 25ECh. 5 - Problem 5-1A
Preparing journal entries for...Ch. 5 - Problem 5-2A
Preparing journal entries for...Ch. 5 - Problem 5-3A Computing merchandising amounts and...Ch. 5 - Problem 5-4A Preparing closing entries and...Ch. 5 - Prob. 5APSACh. 5 - Problem 5-1 B
Preparing journal entries for...Ch. 5 - Problem 5-2B
Preparing journal entries for...Ch. 5 - Problem 5-3B Computing merchandising amounts and...Ch. 5 - Problem 5-4B Preparing closing entries and...Ch. 5 - Problem 5-5B Preparing adjusting entries and...Ch. 5 - SP 5 Santana Rey created Business Solutions on...Ch. 5 - Prob. 1GLPCh. 5 - Prob. 2GLPCh. 5 - Prob. 3GLPCh. 5 - Prob. 1AACh. 5 - Key comparative figures for Apple and Google...Ch. 5 - Prob. 3AACh. 5 - Prob. 1BTNCh. 5 - Prob. 2BTNCh. 5 - Prob. 3BTNCh. 5 - Prob. 4BTNCh. 5 - Prob. 5BTNCh. 5 - Prob. 6BTN
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Identify items missing in determining cost of goods sold For (A) through (E), identify the items designated by X and Y. A. Purchases (X + Y) = Net purchases B. Net purchases + X = Cost of inventory purchased C. Inventory (beginning) + Cost of inventory purchased = X D. Inventory available for sale X = Cost of inventory before estimated returns E. Cost of goods sold before estimated returns X = Cost of goods soldarrow_forwardQUESTION 4 Which of the following is used to analyze the efficiency and effectiveness of inventory management? a. inventory turnover only b. number of days' sales in inventory only c. both inventory turnover and number of days' sales in inventory d. neither inventory turnover or number of days' sales in inventoryarrow_forwardQUESTION 3 The two most widely used methods for determining the cost of inventory are a. gross profit and average cost b. LIFO and average cost c. FIFO and average cost d. FIFO and LIFOarrow_forward
- 5- A measure useful in evaluating the efficiency in managing inventories is: A. inventory turnover. B. days in inventory. C. Both ( a) and ( b).arrow_forward1a The inventory cost flow method that reports the earliest costs in ending inventory is a. LIFO b. weighted average cost c. FIFO d. specific identificationarrow_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_forward
- ah - ELearning Which method tracks the actual physical flow of goods and each item of inventory is marked, tagged, or coded with unit cost. O a. First in, first out O b. Last in, last out O c. Weighted average method O d. Specific identification method 20 A contingent liability should be recorded in the accounts when: O a. it is reasonably possible the contingency will happen, but the amount cannot be reasonably estimated O b. it is probable the contingency will happen, and the amount owed can be reasonably estimated O citis reasonably possible the contingency will happen, and the amount can be reasonably estimated Od itis probable the contingency will happen, but the amount cannot be reasonably estimated ut of ous page Next page Next activity ous activity ump to. Chapter-1-PPT-Slides- Introduction to the Conceptual Framework for Financial Reporting SIGNMENT - Intermediate ACcounting 1 -in touch AFR 10) a A F2 F5 F6 F7 F8 F9 F10 F11 F3 F4 GIO 144 &arrow_forwardProblem 10-34 Multiple choice (IAA) 2. Which is a characteristic of a perpetual inventory system? d. Inventory does not affect net income b. Inventory records are not kept for every item. To determine cost of goods sold Inventory purchases are debited to a purchases account. To determine merchandise returns d. Goods available for sale minus cost of goods sold Why is inventory included in the computation of net income? 1. а. To determine sales revenue b. C. Inventory purchases are debited to a purchases account. a. с. Cost of goods sold is recorded with each sale. : Cost, of goods sold is determined as the amount of purchases less the change in inventory. , Which is incorrect about the perpetual inventory method? . Purchases are recorded as debit to the inventory account. b. The entry to record a sale includes a debit to cost of goods sold and a credit to inventory. c. After a physical inventory count, inventory is credited for any missing inventory. d. Purchase returns are recorded by…arrow_forwardRequirements: 4. Cost of goods sold 5. Gross profit 6. WIP end 7. Materials inventory 8. FG endarrow_forward
- Comparing Inventory Methods Obj. 5 Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. In each space that follows, place the correct sign [less than (<), greater than (>), or equal ] for each comparison, assuming periods of rising prices. 1. FIFO inventory ____________ LIFO inventory 2. FIFO cost of goods sold ____________ LIFO cost of goods sold 3. FIFO net income ____________ LIFO net income 4. FIFO income taxes ____________ LIFO income taxes Why would management prefer to use LIFO over FIFO in periods of rising prices?arrow_forwardMultiple Select Question Select all that apply Identify the statements below which are correct regarding a merchandiser's multi-step income statement. Accounts receivable is included on the statement. Cost of goods sold is subtracted from net sales in order to determine gross profit. Merchandise inventory is reported on the statement. Total assets is the lastne on the statement. Expenses are subtracted from gross profit in order to calculate net income.arrow_forwardQUESTION 25 Which of the following is not an inventory method/cost flow assumption? O a. First-in, first-out O b. Average cost O c. Last-in, first-out O d. Lower-of-cost-or-marketarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Corporate Financial AccountingAccountingISBN:9781337398169Author:Carl Warren, Jeff JonesPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781337398169
Author:Carl Warren, Jeff Jones
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Chapter 6 Merchandise Inventory; Author: Vicki Stewart;https://www.youtube.com/watch?v=DnrcQLD2yKU;License: Standard YouTube License, CC-BY
Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License