Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 5, Problem 49BP
1.
To determine
Prepare a perpetual inventory record using average cost.
2.
To determine
Prepare a multi-step income statement for Incorporation S for the month of April.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Click to watch the Tell Me More Learning Objective 7 video and then answer the questions below.
1. The total units to be produced in a period is calculated as
a. estimated units sold plus desired ending inventory less estimated beginning inventory
b. estimated units sold less desired ending inventory add estimated beginning inventory
c. estimated units sold plus desired ending inventory plus estimated beginning inventory
d. estimated units sold less desired ending inventory less estimated beginning inventory
b
2. Cost of goods sold is calculated as
a. beginning finished goods inventory plus cost of goods manufactured less beginning finished goods inventory
b. beginning finished goods inventory plus cost of goods manufactured plus beginning finished goods inventory
c. beginning finished goods inventory less cost of goods manufactured less beginning finished goods inventory
d. beginning finished goods inventory less cost of goods manufactured plus beginning finished goods inventory
d…
years ended June 30, 2019 and 2018:
Cost of Goods Available for Sale
Nature Foods Grocery reported the following comparative income statements for the
Beginning Merchandise Inventory
Less: Ending Merchandise Inventory
During 2019, Nature Foods Grocery discovered that ending 2018 merchandise inven-
inventory error-two years
an
Merchandise Inventory 361
Learning Objective 5
1.2019, NI $36,500
NATURE FOODS GROCERY
Income Statements
Years Ended June 30, 2019 and 2018
2019
Net Sales Revenue
Cost of Goods Sold:
2018
$ 134,000
$ 119,000
$ 17,000
78,000
$ 14,000
67,000
81,000
Net Cost of Purchases
95,000
18,000
17,000
Cost of Goods Sold
77,000
64,000
57,000
Gross Profit
55,000
Operating Expenses
26,000
21,000
$ 31,000
Net Income
$ 34,000
tory was overstated by $5,500.
Requirements
1. Prepare corrected income statements for the two years.
2.
2 State whether each year's net income-before your corrections-is understated or
overstated, and indicate the amount of the understatement or…
5- Inventory Cost Flow
Assumptions
LEARNING OBJECTIVE: Differentiate between the
key characteristics of the four inventory valuation
methods.
Which of the following descriptions corresponds
with the weighted average inventory valuation
method?
a.) Matches cost of items purchased against
cost of items in inventory
b.) Disregards when inventory was purchased
c.) Inventory purchased first has a greater
weight than inventory purchased later
d.) Tends to be used for inventories of large,
unique items
SUBMIT MY ANSWER
Chapter 5 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 5 - Prob. 1DQCh. 5 - How are the financial statements of a manufacturer...Ch. 5 - What is a cost-flow assumption? Why is a cost-flow...Ch. 5 - If a company had two units that cost 1 each in its...Ch. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Prob. 10DQ
Ch. 5 - During April, Bargain Hardware made sales of...Ch. 5 - Prob. 2SCCh. 5 - Prob. 3SCCh. 5 - Prob. 4SCCh. 5 - Prob. 5SCCh. 5 - Prob. 6SCCh. 5 - Prob. 7SCCh. 5 - Prob. 8SCCh. 5 - Prob. 9SCCh. 5 - Prob. 10SCCh. 5 - Prob. 11SCCh. 5 - Prob. 12SCCh. 5 - Prob. 1SECh. 5 - Prob. 2SECh. 5 - Prob. 3SECh. 5 - Prob. 4SECh. 5 - Prob. 5SECh. 5 - Prob. 6SECh. 5 - Prob. 7SECh. 5 - Prob. 8SECh. 5 - Lower-of-cost-or-market rule (Learning Objective...Ch. 5 - Prob. 10SECh. 5 - Inventory principles and terminology (Learning...Ch. 5 - Prob. 12SECh. 5 - Prob. 13SECh. 5 - Prob. 14SECh. 5 - Prob. 15SECh. 5 - Prob. 16AECh. 5 - Prob. 17AECh. 5 - Prob. 18AECh. 5 - Prob. 19AECh. 5 - Prob. 20AECh. 5 - Prob. 21AECh. 5 - Prob. 22AECh. 5 - Prob. 23AECh. 5 - Prob. 24AECh. 5 - Prob. 25AECh. 5 - Prob. 26AECh. 5 - Prob. 27AECh. 5 - FIFO (Learning Objective 2) 10-15 min. Tee Time,...Ch. 5 - LIFO (Learning Objective 2) 10-15 min. Refer to...Ch. 5 - Prob. 30BECh. 5 - Prob. 31BECh. 5 - Prob. 32BECh. 5 - Prob. 33BECh. 5 - Prob. 34BECh. 5 - Prob. 35BECh. 5 - Prob. 36BECh. 5 - Prob. 37BECh. 5 - Prob. 38BECh. 5 - Prob. 39BECh. 5 - Computing LIFO and journalizing inventory...Ch. 5 - Prob. 41APCh. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 43APCh. 5 - Prob. 44APCh. 5 - Prob. 45APCh. 5 - Estimating ending inventory (Learning Objective 7)...Ch. 5 - Prob. 47APCh. 5 - Prob. 48BPCh. 5 - Prob. 49BPCh. 5 - FIFO, LIFO, and average cost (Learning Objectives...Ch. 5 - Prob. 51BPCh. 5 - Prob. 52BPCh. 5 - Prob. 53BPCh. 5 - Prob. 54BPCh. 5 - Prob. 55BPCh. 5 - Continuing Exercise This exercise continues the...Ch. 5 - Prob. 1CPCh. 5 - Prob. 1CFSAPCh. 5 - Prob. 1EIACh. 5 - Prob. 2EIACh. 5 - Prob. 1FACh. 5 - Prob. 1IACh. 5 - Prob. 1SBACh. 5 - Prob. 1WCCh. 5 - Comprehensive Problem The Accounting Cycle for a...
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
- E6A-27 Computim Learning Objective 7 Appendix 6A ventory Consider the data of the following companies which use the PEHOUI system: Beginning Merchandise Inventory Ending Merchandise Inventory Cost of Goods Sold Net Cost of Net Sales Gross Profit Purchases Company Revenue $ 105,000 $ 23,000 $ 59,000 $ 22,000 24 (a) $ 45,000 Large Small (b) 27,000 94,000 (c) 99,000 40,000 Medium 96,000 (d) 58,000 24,000 68,000 (e) Petite 80,000 8,000 (f) 6,500 (g) 44,000 Requirements 1. Supply the missing amounts in the preceding table. 2. Prepare the income statement for the year ended December 31, 2019, for Large Company, which uses the periodic inventory system. Include a complete headıng and show the full computation of cost of goods sold. Large's operating expenses for the year were $12,000.arrow_forwardS16-10 Computing cost of goods sold, manufacturing company Learning Objective 3 Use the following information to calculate the cost of goods sold for The Ellis Company for the month of June: Finished Goods Inventory: Beginning Balance Ending Balance Cost of Goods Manufactured $ 30,000 10,000 165,000arrow_forwardchapter 6 > Short Exercises For all short exercises, assume the perpetual inventory system is used unless stated otherwise. Learning Objective 1 S6-1 Determining inventory accounting principles Ward Hardware used the FIFO inventory costing method in 2018. Ward plans to continue using the FIFO method in future years. Which accounting principle is most relevant to Ward's decision?arrow_forward
- Select the best answer for the question. Utilize Set 2 from the following PDF to answer this question: http://lessons.pennfoster edu/pdf/061006_Exam_Tables.pdf 4. Which one of the following statements is true for the ending inventory balance? *. O A. It will appear as a debit in the Adjusted, Trial Balance column. B. It will appear as a credit in the Balance Sheet column OC. It will appear as a credit in the Income Statement column. OD. It will appear as a debit in the Trial Balance column. O Mark for review (Will be highlighted on the review page) >arrow_forwardFinished goods inventory would normally include: Select one: a. goods partially worked on but not yet fully completed b. direct materials in stock and awaiting use in the manufacturing process C. goods fully completed but not yet sold d. products in their original form intended to be sold without changing their basic form Previous page Next exam Jump to... Return to: General 24°C aioarrow_forward(Learning Objective 3: Explain GAAP and apply the lower-of-cost-or-market ruleto inventories) Anderson Trade Mart has recently had lackluster sales. The rate of inventoryturnover has dropped, and the merchandise is gathering dust. At the same time, competitionhas forced Anderson’s suppliers to lower the prices that Anderson will pay when it replacesits inventory. It is now December 31, 2018, and the net realizable value of Anderson’s endinginventory is $55,000 below what the company actually paid for the goods, which was $265,000.Before any adjustments at the end of the period, the Cost of Goods Sold account has a balanceof $820,000.a. What accounting action should Anderson take in this situation?b. Give any journal entry required.c. At what amount should the company report Inventory on the balance sheet?d. At what amount should the company report Cost of Goods Sold on the incomestatement?e. Discuss the accounting principle or concept that is most relevant to this situationarrow_forward
- 7:28S W □ e6-20 Learning Objectives 2, 3 1. COGS $2,140 ⠀⠀⠀ Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires: May 1 Beginning merchandise inventory 11 Purchase 23 Sale 26 Purchase 29 Sale QAA C 16 tires @ $65 each 363/ 1480 10 tires @ $78 each 12 tires @ $88 each 14 tires @ $ 80 each Requirements 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. 18 tires @ $ 88 each 5G 70% Ę 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method. GO ||| 0 < : ×arrow_forwardLesson 7: Valuing Inventory 11. Describe how to find inventory value using the average cost method.arrow_forwardE QUIZ: INVENTORIESPROBLEM SC X : Classwork for 2nd Sem IT Tools ir X Copy of Dark Astronomy Thesis X 4 My Drive - Google Drive il/u/0/#inbox?projector=1 PROBLEM 6: XXX Company is preparing its 2021 financial statements. Prior to any adjustments, inventory is valued at P1,605,000. The following information has been found relating to certain inventory transactions from your cut-off test: A. Goods valued at P110,000 are on consignment with a customer. These goods were not included in the ending inventory figure. B. Goods costing P87,000 were received from a vendor on January 5, 2022. The related invoice was received and recorded on January 12, 2022. The goods were shipped on December 31, 2021, terms FOB shipping point. C. Goods costing P85,000, sold for P102,000, were shipped on December 31, 2021, and were delivered to the customer on January 2, 2022. The terms of the invoice were FOB shipping point. The goods were included in the ending inventory for 2021 and the sale was recorded in…arrow_forward
- LEARNING ACTIVITY 1.2 Questions 1. Complete the following statements with one of the terms listed below. A term may be used once, more than once, or not at all. • Unfinished goods • Service organisations Finished goods inventory Manufacturing organisations • Merchandising companies (a) All --- typically have a single category of inventory. (b) ----------- do not have tangible products purchased for resale. (c) ------------ resell ready-made products. (d) The inventory of a manufacturer includes raw material, and ----------. (e) ---------- use their plant, machinery and labour to convert raw material into finished goods.arrow_forwardB. assume that blue uses the perpetual iventory system compute the ending inventory cost , cost of good sold , and gros profit for the inventory costing method 4. fifo 5. lifo 6. moving averagearrow_forwardAccess EDGAR (Electronic Data Gathering, Analysis and Retrieval) on the internet at www.sec.gov. Access a 10-K filing for any company. Search for the notes regarding their inventory valuation method(s) and describe them in a paragraph. Each student should use a different company. Please remember to include a link to the 10-K of your company in your post.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
INVENTORY & COST OF GOODS SOLD; Author: Accounting Stuff;https://www.youtube.com/watch?v=OB6RDzqvNbk;License: Standard Youtube License