Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Question
Chapter 9, Problem 9.1DMP
1.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
The accounting for reporting the warehousing costs related to wholesale inventories.
2.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
Principle of accounting and the amount of wholesale inventories to be reported in balance sheet by Company H.
3.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
The treatment of freight-in costs, net markups, and net markdowns.
4.
To determine
Introduction: The retail inventory method considers all retail amounts, i.e. current selling prices. To calculate the ending inventory, subtract the goods available for sale at retail from the sales at retail.
The treatment of net markdowns affect on the cost-to-retail percentage.
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Students have asked these similar questions
Which of the following statements about merchandisingactivities is true? (More than one answer may be correct.)a. As inventory is purchased, the Inventory Expenseaccount is debited and Cash (or Accounts Payable) iscredited.b. Inventory is recorded as an asset when it is firstpurchased.
c. As inventory is sold, its cost is transferred from the bal-ance sheet to the income statement.
d. As inventory is sold, its cost is transferred from theincome statement to the balance sheet.
1. Selling expenses are shown in which of the following statement?a. Cost of Goods Soldb. Profit and Loss Accountc. Manufacturing Accountd. Profit and Loss Appropriation Account
2. Which of the following is used to determine the cost of goods sold?a. Beginning Inventory + Purchasesb. Beginning Inventory + Purchases - Salesc. Beginning Inventory + Net Purchases + Direct Expenses - Ending Inventoryd. Ending Inventory + Purchases - Beginning Inventory
3. Which of the following would not be considered as a component of the "cost" of stock?a. Salaries of selling staffb. Transportation inward costsc. Import dutiesd. Purchase price
Which of the following statements are true regarding Costof Goods Sold?(i) Cost of Goods Sold represents the costs that a company incurred to purchase or produce inventory in thecurrent period.(ii) Cost of Goods Sold is an expense on the incomestatement.(iii) Cost of Goods Sold is affected by the inventorymethod selected by a company (FIFO, LIFO, etc.).a. (i) only c. (ii) and (iii)b. (ii) only d. All of the above.
Chapter 9 Solutions
Intermediate Accounting, 10 Ed
Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q
Ch. 9 - Explain the LIFO retail inventory method.Ch. 9 - Discuss the treatment of freight-in, net markups,...Ch. 9 - Explain the difference between the retail...Ch. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Explain the accounting treatment of material...Ch. 9 - Identify any differences between U.S. GAAP and...Ch. 9 - (Based on Appendix 9) Define purchase commitments....Ch. 9 - (Based on Appendix 9) Explain how purchase...Ch. 9 - Lower of cost or net realizable value LO91 Ross...Ch. 9 - Lower of cost or net realizable value LO91 SLR...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.5BECh. 9 - Gross profit method; solving for unknown LO92...Ch. 9 - Retail inventory method; average cost LO93 Kiddie...Ch. 9 - Retail inventory method; LIFO LO93 Refer to the...Ch. 9 - Conventional retail method LO94 Refer to the...Ch. 9 - Conventional retail method LO94 Roberson...Ch. 9 - Lower of cost or net realizable value LO91 Herman...Ch. 9 - Lower of cost or net realizable value LO91 The...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.11ECh. 9 - Concepts; terminology LO91 through LO97 Listed...Ch. 9 - Prob. 9.1PCh. 9 - Prob. 9.3PCh. 9 - Prob. 9.8PCh. 9 - Prob. 9.1DMPCh. 9 - Prob. 9.3DMPCh. 9 - Prob. 9.4DMPCh. 9 - Prob. 9.5DMPCh. 9 - Prob. 9.6DMPCh. 9 - Prob. 9.7DMPCh. 9 - Real World Case 98 Various inventory issues;...Ch. 9 - Prob. 9.9DMPCh. 9 - Judgment Case 910 Inventory errors LO97 Some...Ch. 9 - Prob. 9.12DMPCh. 9 - Prob. 2CCTC
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Similar questions
- The following information is taken from a companys records. Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forward1. Which one of the following types of costs is most likely to be included in determining the cost of inventory?a. Freight-inb. Interest cost for amounts borrowed to finance the purchase of inventoryc. Freight-outd. Marketing cost 2. Which of the following equation is correct and used in costing?a. Beginning Inventory + Purchases + Ending Inventory = Cost of Goods Soldb. Cost of Goods Sold - Ending Inventory - Purchases = Beginning Inventoryc. Cost of Goods Sold + Ending Inventory - Beginning Inventory = Purchasesd. Beginning Inventory + Cost of Goods Sold - Purchases = Ending Inventoryarrow_forwardWhich of the following statements is correct? Group of answer choices A)Revenue is recognized at the time of shipment when goods are shipped FOB destination. B)Sales returns and allowances are reported as operating expenses on an income statement. C)Revenue is recorded when title and risks of ownership transfer to the buyer. D)Sales discounts are reported as operating expenses on an income statement.arrow_forward
- In accounting for by-products, when the by-products are sold for more than the estimated sales value, the difference is: a. credited to Gain or Loss on Sale of By-Product b. debited to Gain or Loss on Sale of By-Product c. immaterial, so not recorded. d. credited to By-Product Inventory.arrow_forwardWhich of the following statements about FIFO is true? Select one: a. All of the statements are correct b. Cost of goods sold is calculated using the costs of the earliest purchased inventory. c. The value of merchandise inventory is made up of the costs of the most recently purchased inventory. d. Under FIFO, a schedule is used to track the different costs of purchased inventory.arrow_forwardWhich of the following statements is correct in the context of the Income Statement prepared by a Retailer (of Inventory)? Select one: O a. Gross Profit plus Operating Expenses equals Net Profit. O b. Net Sales Revenue minus (Cost of Goods Sold + Operating Expenses) equals Net Profit. O c. Net Sales Revenue minus Operating Expenses equals Gross Profit. O d. Net Sales Revenue minus Cost of Goods Sold equals Net Profit.arrow_forward
- How much is the adjustment to the Cost of Sales account to set up its correct balance?arrow_forward1. Explain the effect of each inventory cost flow method on the company's net income 2. Recommed one method and explain the reasons for your recommendationarrow_forward1. Which of the following accounts is not included in inventory? a. Raw material b. Team c. Finished goods d. Materials 2. Why is inventory included in the net income determination? a. To determine the cost of goods sold b. To determine sales income c. To determine the return of merchandise d. Inventory is not included in the determination of net income 3. Which of the following is a feature of the perpetual inventory system? a. Inventory purchases are debited to the Purchasing account. b. Inventory records are not kept for every item. c. The cost of what is sold is recorded in each sale. d. The cost of goods sold is determined as the quantity of purchases minus the change in inventory.arrow_forward
- Which of the following statements is incorrect? Select one: a. By using the IFRS, goods shipped on consignment from a seller to another company should be included in the inventory of the seller. b. Many argue that LIFO provides a better matching of current costs against revenue from a financial reporting point of view. c. Both IFRS and GAAP account for inventory acquisitions at historical cost and value inventory at the lower-of-cost-or-net-realizable value subsequent to acquisition. d. Both inventory and net income are higher when companies use LIFO in a period of inflation.arrow_forwardWhat needs to be considered when not only counting inventory, but likewise in the final valuation of inventory? Why is the inventory valuation so important for accounting purposes (for example, how would inventory errors affect the balance sheet and income statement - beginning vs. ending inventory). (**Hint - ending inventory for the initial period then becomes beginning inventory in the next reporting period - and both are used in the computation of cost of goods sold, used to compute gross profit in the income statement)arrow_forwardWhich income statement account(s) would be affected by a policy choice at the same time as the inventory balance sheet account. a. Bad debts expense b. Cost of goods sold expense c. Depreciation or amortisation expense d. Sales revenuearrow_forward
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