Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 7, Problem 9AP
1.
To determine
Prepare a schedule to show the estimate of store’s month end inventory at cost using retail method.
2.
To determine
Bring down the retail value of the physical inventory at cost using cost to retail ratio.
3.
To determine
Determine the estimated amount of inventory shortage at retail and at cost.
4.
To determine
Explain the reason for which the retail method is an efficient way for these companies to operate.
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Students have asked these similar questions
You are called by Tim Duncan of Shamrock Co. on July 16 and asked to prepare a claim for insurance as a result of a theft that
took place the night before. You suggest that an inventory be taken immediately. The following data are available.
Inventory, July 1
Purchases-goods placed in stock July 1-15
Sales revenue-goods delivered to customers (gross)
Sales returns-goods returned to stock
$36,600
81,300
119,400
Your client reports that the goods on hand on July 16 cost $31,300, but you determine that this figure includes goods of
$6,300 received on a consignment basis. Your past records show that sales are made at approximately 60% over cost. Duncan's
insurance covers only goods owned.
Claim against the insurance company $
3,600
Compute the claim against the insurance company. (Round ratios for computational purposes to 3 decimal places, e.g. 78.736% and
final answer to O decimal places, e.g. 28,987.)
LA
26700
Record general journal entries to correct the errors described below. Assume that the incorrect entries were posted in the same period in which the errors occurred and were recorded using the periodic inventory system. Round your answers to the nearest cent.
A freight cost of $85 incurred on equipment purchased for use in the business was debited to Freight In.
The issuance of a credit memo to Lang Company for $119 for merchandise returned was recorded as a debit to Purchases Returns and Allowances and a credit to Accounts Receivable, Lang Company.
A cash sale of $68 to J. L. LaSalle was recorded as a sale on account.
A purchase of merchandise from James Company in the amount of $750 with a 25 percent trade discount was recorded as a debit to Purchases and a credit to Accounts Payable of $750 each.
Crosby Company owns a chain of hardware stores throughout the state. The company uses a periodic inventory system and the retail
Inventory method to estimate ending inventory and cost of goods sold. The following data are available:
Beginning inventory
Net purchases
Net markups
Net markdowns
Net sales
Required:
Complete the table below to estimate the LIFO cost of ending inventory and cost of goods sold using the information provided.
Assume stable retail prices during the period.
Beginning inventory
Net purchases
Net markups
Net markdowns
Cost
$ 160,000
607,760
Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a
minus sign.
Retail
$ 280,000
840,000
20,000
4,000
800,000
Cost-to-retail percentage (current)
Net sales
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
Goods available for sale (excluding beginning inventory)
Goods available for sale (including…
Chapter 7 Solutions
Principles of Accounting
Ch. 7 - Prob. 1DQCh. 7 - Which of the following methods do not require a...Ch. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 1SECh. 7 - Assume the following data with regard to inventory...Ch. 7 - Prob. 3SE
Ch. 7 - Prob. 4SECh. 7 - Prob. 5SECh. 7 - Prob. 6SECh. 7 - Prob. 7SECh. 7 - Prob. 8SECh. 7 - Prob. 9SECh. 7 - Prob. 10SECh. 7 - Prob. 11SECh. 7 - Prob. 12SECh. 7 - Prob. 1EACh. 7 - Prob. 2EACh. 7 - Prob. 3EACh. 7 - Prob. 4EACh. 7 - Prob. 5EACh. 7 - Prob. 6EACh. 7 - During July 2014, Micanopy, Inc., sold 500 units...Ch. 7 - Prob. 8EACh. 7 - Prob. 9EACh. 7 - Prob. 10EACh. 7 - Prob. 11EACh. 7 - Prob. 12EACh. 7 - Midori Company merchandises a single product...Ch. 7 - The inventory of Wood4Fun and data on purchases...Ch. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6APCh. 7 - DiPaolos inventory, purchases, and sales for March...Ch. 7 - Prob. 8APCh. 7 - Prob. 9APCh. 7 - Zubac Company is a large retail furniture company...Ch. 7 - Prob. 1CCh. 7 - Prob. 2CCh. 7 - ExxonMobil Corporation had net income of 41.0...Ch. 7 - Prob. 4CCh. 7 - JCPenney, a large retail company with many stores,...
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