Question
In: Accounting
The inventories of Berry Company for the years 2016 and 2017 are as follows: Cost Market...
The inventories of Berry Company for the years 2016 and 2017 are as follows:
| Cost | Market | |
|---|---|---|
| January 1, 2016 | $10,000 | $10,000 |
| December 31, 2016 | 13,000 | 11,500 |
| December 31, 2017 | 15,000 | 14,000 |
Berry uses a perpetual inventory system.
| Required: | |||||
| 1. | Assume the inventory that
existed at the end of 2016 was sold in 2017. Prepare the necessary
journal entries at the end of each year to record the correct
inventory valuation if Berry uses the:
|
||||
| 2. | Next Level Explain any differences in inventory valuation and income between the two methods. |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
The inventories of Berry Company for the years 2016 and 2017 are as follows: Cost Market...
The inventories of Berry Company for the years 2016 and 2017 are
as follows:
Cost
Market
January 1, 2016
$10,000
$10,000
December 31, 2016
13,000
11,500
December 31, 2017
15,000
14,000
Berry uses a perpetual inventory system.
Assume Berry uses the direct method.
Prepare the necessary journal entries to record:
1. the correct inventory valuation on December 31, 2016
2. the reduction in inventory when the inventory from December
31, 2016 is sold during 2017
3. the correct inventory valuation...
Question 2 The following are the inventories for the years 2016, 2017, and 2018 for Parry...
Question 2
The following are the inventories for the years 2016, 2017, and
2018 for Parry Company:
Cost
Market
January 1, 2016
$50,000
$50,000
December 31, 2016
64,000
60,000
December 31, 2017
71,000
70,000
December 31, 2018
75,000
78,000
a. Assume Parry uses the allowance method and a perpetual
inventory system.
Prepare the necessary journal entries to record:
1. the correct inventory valuation on December 31, 2016
2. the reduction in inventory when the inventory from December
31, 2016 is...
The inventory records of Frost Company for the years 2016 and 2017 reveal the cost and...
The inventory records of Frost Company for the years 2016 and
2017 reveal the cost and market of the January 1, 2016, inventory
to be $125,000. On December 31, 2016, the cost of inventory was
$130,000, while the market value was only $128,000. The December
31, 2017, market value of inventory was $140,000, and the cost was
only $135,000. Frost uses a perpetual inventory system.
Assume Frost uses the allowance method and a perpetual inventory
system.
Prepare the necessary journal...
The inventory records of Frost Company for the years 2016 and 2017 reveal the cost and...
The inventory records of Frost Company for the years 2016 and
2017 reveal the cost and market of the January 1, 2016, inventory
to be $125,000. On December 31, 2016, the cost of inventory was
$130,000, while the market value was only $128,000. The December
31, 2017, market value of inventory was $140,000, and the cost was
only $135,000. Frost uses a perpetual inventory system.
Required:
1.
Assume the inventory that
existed at the end of 2016 was sold in...
The Income Statement for XYZ Company for 2016 and 2017 is as follows: 2017 Sales $4,000,000...
The Income Statement for XYZ Company for 2016 and 2017 is as
follows:
2017
Sales $4,000,000
Cost of Goods Sold 2,500,000 Gross Profit 1,500,000 Selling
Expense 600,000 Administrative Expense 200,000 Total Operating
Expense 800,000 Income from Operations 700,000 Income Tax Expense
50,000 Net Income 650,000
2016 $3,500,000 2,400,000 1,100,000 700,000 150,000 850,000
250,000 20,000 230,000
Instructions: Using the above comparative horizontal analysis
for ABC Company.
data for Mix-A-Lot Manufacturing Company for the month ended March 31, 2016, are as follows: Inventories...
data for Mix-A-Lot Manufacturing Company for the month ended
March 31, 2016, are as follows: Inventories March 1 March 31
Materials $310,000 $276,600 Work in process 215,200 238,400
Finished goods 162,800 190,100 March 31 Direct labor $565,000
Materials purchased during the month 604,800 Factory overhead
incurred during the month: Indirect labor 60,440 Machinery
depreciation 35,000 Heat, light, and power 13,600 Supplies 8,540
Property taxes 8,860 Miscellaneous costs 16,400 Required:
A. Prepare a cost of goods manufactured statement for March
2016....
Smyrna Company had financial and taxable incomes as follows: 2016 2017
Smyrna Company had financial and taxable incomes as
follows:
2016
2017
2018
Pretax financial income
$150,000
$140,000
$135,000
Taxable income
115,000
140,000
170,000
The tax rate for all three years was 30%.
Required:
a. Prepare the journal entries to record income taxes for all
three years.
b. Explain why the taxes paid in 2018 are different from the tax
return and the amount reported in the financial statements and
provide...
Cullumber Company Oriole Company 2017 2016 2017 2016 Net sales $1,856,000 $596,000 Cost of goods sold...
Cullumber Company Oriole Company 2017 2016 2017 2016 Net sales
$1,856,000 $596,000 Cost of goods sold 1,079,000 298,000 Operating
expenses 263,000 83,000 Interest expense 7,000 2,800 Income tax
expense 75,000 34,000 Current assets 590,015 $565,462 150,838 $
143,835 Plant assets (net) 953,508 905,000 252,908 227,720 Current
liabilities 120,048 137,225 63,980 54,809 Long-term liabilities
206,322 162,900 53,612 45,250 Common stock, $10 par 905,000 905,000
217,200 217,200 Retained earnings 312,153 265,337 68,954 54,296
Compute the 2017 return on assets and the return...
KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2017, 2016, and 2015 2017 2016...
KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
2017
2016
2015
Sales
$
397,455
$
304,483
$
211,300
Cost of goods sold
239,268
192,738
135,232
Gross profit
158,187
111,745
76,068
Selling expenses
56,439
42,019
27,892
Administrative expenses
35,771
26,795
17,538
Total expenses
92,210
68,814
45,430
Income before taxes
65,977
42,931
30,638
Income taxes
12,272
8,801
6,220
Net income
$
53,705
$
34,130
$
24,418
KORBIN COMPANY
Comparative Balance Sheets
December 31, 2017, 2016, and...
Example: Caterpillar (CAT), 10-K, 2016 Inventories Inventories are stated at the lower of cost or...
Example: Caterpillar (CAT), 10-K, 2016
Inventories
Inventories are stated at the
lower of cost or market. Cost is principally determined using the
last in, first-out (LIFO) method. The value of inventories on the
LIFO basis represented about 60 percent of total inventories at
December 31, 2016 and 2015.
If the FIFO (first-in, first-out)
method had been in use, inventories would have been $2,139 million
and $2,498 million higher than reported at December 31, 2016 and
2015, respectively. – Page...
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