Chapter 7, Problem 22ME

The management of Jones Company has asked its accounting department to describe the effect upon the company’s financial position and its income statements of accounting for inventories on the LIFO rather than the FIFO basis during 2017 and 2018. The accounting department is to assume that the change to LIFO would have been effective on January 1, 2017, and that the initial LIFO base would have been the inventory value on December 31, 2016. The following are the company’s financial statements and other data for the years 2017 and 2018 when the FIFO method was employed.     Financial Position as of     12/31/16   12/31/17   12/31/18 Cash   $ 91,300   $132,000   $152,600 Accounts receivable   81,100   101,700   123,000 Inventory   123,000   139,300   178,000 Other assets   158,300   173,400   201,900    Total assets   $453,700   $546,400   $655,500 Accounts payable   $ 39,900   $ 61,000   $ 81,100 Other liabilities   69,800   81,600   113,500 Common stock…

Please refer to the picture below for the information. Please show the complete solution and kinldy include label. Thank you so much. Question 1: How much is the amount of "Cost of Goods Sold" to be reported in the 2015 Statement of comprehensive income assuming the company’s policy is to charge loss on inventory write-down to COST OF GOODS SOLD and charge loss on inventory write-down to OTHER EXPENSE, respectively.  Question 2: How much is the amount of "Cost of Goods Sold" to be reported in the 2016 Statement of comprehensive income?

Accountants at UltraTech obtain their values for inventory and total assets, calculate the balance sheet percentage by dividing inventory by total assets for each year and summarize the observations for the relative size of inventory to total assets for each year and percentage change from year-to-year. This would allow them to effectively assess: a. Inventory control compared to competitorsb. If there is an effective return on assetsc. If inventory is being properly managedd. How they are managing liabilities

Question:   XYZ Inc. is a large manufacturing company that uses the weighted average method for inventory valuation. During the current financial year, the company experienced a significant increase in its inventory levels due to a surge in production and raw material purchases. At the end of the year, the company's management noticed discrepancies between the physical count and the recorded inventory levels in the books.   Which of the following statements regarding the weighted average method for inventory valuation and its impact on financial statements is correct?   A) The weighted average method assigns the same cost to each unit of inventory, regardless of when it was purchased, resulting in a smoother cost flow compared to other inventory valuation methods.   B) When using the weighted average method, the ending inventory value is based on the most recent purchases made during the year, resulting in a higher cost of goods sold (COGS) and lower gross profit.   C) The weighted…

The management of Gresa Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2017 if either the FIFO or the LIFO method had been used. For 2017, the accounting records show these data: Inventories   Purchases and Sales Beginning (7,000 units)   $14,000   Total net sales (236,000 units)   $1,038,400 Ending (21,000 units)       Total cost of goods purchased (250,000 units)   596,500 Purchases were made quarterly as follows. Quarter   Units   Unit Cost   Total Cost 1   65,000   $2.20   $143,000 2   55,000   2.30   126,500 3   55,000   2.40   132,000 4   75,000   2.60   195,000     250,000       $596,500 Operating expenses were $150,000, and the company’s income tax rate is 30%.           Prepare comparative condensed income statements for 2017 under FIFO and…

Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company’s interim income statements as originally reported under the LIFO method follow:If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows:Sales for the second quarter of 2017 are $20,000, cost of goods sold under the FIFO method is $9,000, and operating expenses are $3,400. The effective tax rate remains 40 percent. Cambi Com­pany has 1,000 shares of common stock outstanding.Prepare a schedule showing the calculation of net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2017.

It is discovered in 2018 that ending inventory in 2016 was understated. What is the effect of the understatementon the following: 2016: Cost of goods soldNet incomeEnding retained earnings2017: Net purchasesCost of goods soldNet incomeEnding retained earnings

An analyst observes a decrease in a company’s inventory turnover. Which of the following would most likely explain this trend? B . Due to problems with obsolescent inventory last year, the company wrote off a large amount of its inventory at the beginning of the period.

Cent Discount Stores is assessing its levels of inven-tory for 2013 and 2014 and has gathered the following data (see image). Compute the inventory turnover and days’ inventory on hand for 2013 and 2014 (round to one decimal place), and comment on the results.