Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 5B, Problem 2SEB
(Estimate inventory. (LO 9). Knick-Knacks wants to estimate its ending inventory balance for its quarterly financial statements for the first quarter of the year. Given the following, what is your best estimate?
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Students have asked these similar questions
For 2021, Walmart and Target had the following information (all values are in millions of dollars): Assume a 365-day year.
a. What is each company's accounts receivable days?
b. What is each company's inventory turnover?
c. Which company is managing its accounts receivable and inventory more efficiently?
Data table
(Click on the following icon in order to copy its contents into a spreadsheet.)
Walmart
Target
(Income Statement)
Sales
572,762
106,007
Cost of Goods Sold
(Income Statement)
428,997
74,962
Accounts Receivable
(Balance Sheet)
8,279
830
Inventory
(Balance She
56,519
13,902
= X
Suppose a company's cost of goods sold for
years 2 and 3 were $283,310 and $299,390
respectively. Also suppose that inventory had
a balance of $34,740 at the end of year 1,
$35,168 at the end of year 2, and $36,356 at
the end of year 3. If the annual growth in total
revenues is 8.42% for the foreseeable future,
calculate the forecasted inventory balance at
the end of year 5. Assume the same inventory
turnover in all future years as that in year 3
calculated using the average asset balances.
Also assume the same gross margin % in all
future years as that in year 3. Note that year 3
is the latest year with reported results, while
years 4 onwards are all forecasted years.
Consider the following details about a firm from the past year. Assume that this sample time period provides a good estimate for the firm's cycles. What is its Inventory Period?
March 1 - Acquire Inventory
March 20 - Pay $25,000 for Inventory
April 22 - Sell Inventory on Credit
May 23 - Collect $40,000 for Sale on Credit
Chapter 5B Solutions
Financial Accounting
Ch. 5B - Suppose Base Company began May with inventory of...Ch. 5B - Estimate inventory. (LO 9). Fantasy Games, Inc.,...Ch. 5B - (Estimate inventory. (LO 9). Knick-Knacks wants to...Ch. 5B - Estimate inventory. (LO 9). The following...Ch. 5B - Estimate inventory. (LO 9). The records of Florida...Ch. 5B - Estimate inventory. (LO 9). Hines Fruit Corp....Ch. 5B - Estimate inventory. (LO 9). Carries Cotton Candy...
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- The Quartz Company has been taking a physical inventory every quarter in order to prepare its quarterly financial statement. The management is interested to know if they have some alternative to find an efficient way of determining the cost of ending inventory for its quarterly reports. You have been given the following information abased on which you are supposed to suggest the management something that will fulfil the requirements. The Quartz Company Partial Income Statement For the year ended Dec 31, 2020 Net Sales $655,000 CGS: Beginning Inventory 80000 Purchases, Net 575000 COGAS…arrow_forwardFrom the following hypothetical data for Riffa Co. in 2018 and 2019 to project revenues, cost of goods sold, and inventory for Year +1. Assume that Riffa's Year +1 revenue growth rate, gross profit margin growth rate, and inventory turnover will be identical to 2019. Project the average inventory balance in Year +1 and use it to compute the implied ending inventory balance. Cost of Goods Sold Gross Profit Ending Inventory Riffa Co. Required: Calculate the followings for Riffa Co. (consider 3 decimal places) 1. Sales Revenue and Growth Rate for Y+ 1 year. 2. Inventory Turnover for 2019. 3. Forecasted Gross Profit for Y+1. 4. Projected Average Inventory Balance in Year +1 5. Projected Ending Inventory for Year + 1. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) 2018 48520 30560 6480 2019 56520 36800 8260arrow_forwardObtain Apple's annual report of Fiscal Year 2021 and answer the questions below. Hint: Go to the company's official website and look for the "Investor Relations" section. Download the 2021 annual report (also called Form 10-K). Do NOT use quarterly reports or reports of other years.arrow_forward
- Use the following information relating to Clover Company to calculate (a) the inventory turnover ratio, (b) gross margin, and (c) the number of days' sales in inventory ratio, for years 2022 and 2023. Assume a year has 365 days. Do not round intermediate calculations and round your final answers to 3 decimal places. Cost of Average Sales Goods Sold Inventory Year 2021 $260,000 $177,500 $25,000 Year 2022 305,000 221,250 30,000 Year 2023 343,000 242,250 35,000 Inventory Gross Days' Sales Turnover Margin in Inventory Year 2022 Year 2023arrow_forwardA) Calculate the following liquidity ratios for 2020. 1. Working capital- 2.Current Ratio- 3. Acid test ratio- 4. Accounts receivable turnover- B) calculate the following liquidity ratios for 2020. 1. Average collection period (in days)- 2. Inventory turnover (in times)- C) calculate the average days to sell inventory for 2020. 1. Average days to sell inventory-arrow_forward1.A.) The following table shows the desired ending inventory levels of Red Rose Product of Rose Turkish Delight Company for the following year. The company's sales department manager expects the first quarter's sales to be 10,000 boxes and a 10% increase in each quarter. 31.12.2021 31.03.2022 30.06.2022 30.09.2022 31.12.2022 Desired Ending Inventory balances of Red 600 700 800 900 1000 Rose Prepare a production budget for Red Rose Product Line for 2022.arrow_forward
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