Problem 1 A subsidiary of J & J Products is in the process of preparing interim...

Problem 1
A subsidiary of J & J Products is in the process of preparing interim financial statements. Since they take physical inventory on an annual basis they use the Conventional Retail Inventory Method to estimate inventory. Fortunately, J & J Products keeps very detailed inventory records at both cost and retail. The following information for containers, as of the end of the third quarter, 2015, is provided.

	COST	RETAIL
BEGINNING INVENTORY	90,000	167,000
PURCHASES	250,000	435,000
PURCHASE RETURNS	8,000
MARKUPS		10,000
MARKUPS CANCELLATIONS		25,000
MARKDOWNS		5,000
EMPLOYEE DISCOUNTS		9,000
SALES		400,000

Using the conventional retail inventory method calculate ending inventory at cost (for the third quarter of 2015).

Please show all calculations in detail. thanks!!!

Solutions

Expert Solution

calculation of ending inventory at cost
particulars	Cost	retail
Beginning inventory	$ 90,000.00	$ 1,67,000.00
purchases	$ 2,50,000.00	$ 4,35,000.00
purchase return	$ 8,000.00
total	$ 3,32,000.00	$ 6,02,000.00
markups		$ 10,000.00
markup cancellation		$ 25,000.00
net markups (10000-25000)		$ -15,000.00
markdown		$ 5,000.00
employeess discount		$ 9,000.00
sales		$ 4,00,000.00
inventoey in retail( total-markdwon-enployees discount-sales)		$ 1,73,000.00
cost to retail ratio = 332000/602000= 0.55
closing inventory at cost = 0.55*173000= 95150

ekkarill92 answered 9 months ago

Next > < Previous

Related Solutions

Problem 4 Acme, Inc., a subsidiary of J & J, during 2015, began and completed a...

Problem 4 Acme, Inc., a subsidiary of J & J, during 2015, began and completed a small warehouse. Construction on the warehouse began January 2, of 2015. Expenditures were made as follows: January 2, $1,000,000, March 1, $900,000, July 1, $400,000 and Oct. 1, $800,000. J & J financed the project by issuing $1,000,000 in stock at the beginning of 2015 and borrowed $1,200,000 from The Last National Bank at an interest rate of 8%. In addition, Acme had the...

Acme, Inc., a subsidiary of J & J, during 2015, began and completed a small warehouse....

Acme, Inc., a subsidiary of J & J, during 2015, began and completed a small warehouse. Construction on the warehouse began January 2, of 2015. Expenditures were made as follows: January 2, $1,000,000, March 1, $900,000, July 1, $400,000 and Oct. 1, $800,000. J & J financed the project by issuing $1,000,000 in stock at the beginning of 2015 and borrowed $1,200,000 from The Last National Bank at an interest rate of 8%. In addition, Acme had the following debt:...

Ivanhoe Corporation, a publicly traded company, is preparing the interim financial data which it will issue...

Ivanhoe Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its stockholders and the Securities and Exchange Commission (SEC) at the end of the first quarter of the 2017–2018 fiscal year. Ivanhoe’s financial accounting department has compiled the following summarized revenue and expense data for the first quarter of the year. Sales revenue $56,000,000 Cost of goods sold 35,200,000 Variable selling expenses 870,000 Fixed selling expenses 2,720,000 Included in the fixed selling expenses...

Continuing Payroll Problem, 4B: Chapter 4 This problem continues the process of preparing the Olney Company's...

Continuing Payroll Problem, 4B: Chapter 4 This problem continues the process of preparing the Olney Company's Employee Payroll Register for the pay period ending January 8th, 20--. In previous chapters, gross wages were computed for each employee and using this data, FICA withholding and employer FICA liability was computed. This information is shown in the Employee Payroll Register. Requirement: Refer to the SIMPLE Plan Contributions table and enter each employee's SIMPLE plan deduction. Determine and record the federal income taxes...

Problem 1 J & J is considering replacing some of their older computers. Give the potential...

Problem 1 J & J is considering replacing some of their older computers. Give the potential entries given the following scenarios. Assume all scenarios are independent (B is not independent from A) and have no commercial substance. a. Fourteen new computers - $140,000, additional $2,000 for freight and 6% tax on $140,000. Estimated useful life is 5 years with 5% salvage value. They are treated as a single unit for financial reporting purposes. No trade-ins. b. Ten existing computers will...

Chapter 15 Problem 1 1. Pretty Lady Cosmetic Products has an average production process time of...

Chapter 15 Problem 1 1. Pretty Lady Cosmetic Products has an average production process time of 40 days. Finished goods are kept on hand for an average of 15 days before they are sold. Accounts receivable are outstanding an average of 35 days, and the firm receives 40 days of credit on its purchases from suppliers. Estimate the average length of the firm’s short-term operating cycle. How often would the cycle tur over in a year? Assume net sales of...

You are an audit senior of J&J CPAs LL.P. and are in the process of reviewing...

You are an audit senior of J&J CPAs LL.P. and are in the process of reviewing the inventory system documentation for your audit client, Emilia Technology (Emilia) which manufactures computer equipment. The company’s factory and warehouse are based on one large site, and their year end is 30 June 2017. Emilia is planning to undertake a full inventory count at the year end of its raw materials, work in progress and finished goods and you will be attending this count....

1. The controller of the Red Wing Corporation is in the process of preparing the company’s...

1. The controller of the Red Wing Corporation is in the process of preparing the company’s 2021 financial statements. She is trying to determine the correct balance of cash and cash equivalents to be reported as a current asset in the balance sheet. The following items are being considered: Balances in the company’s accounts at the First National Bank; checking $15,000, savings $23,600. Undeposited customer checks of $6,700. Currency and coins on hand of $730. Savings account at the East...

Find the inverse of the following 4x4 matrix: 1-j j 1+j 2 -j 4 2-j 3 1-j...

Find the inverse of the following 4x4 matrix: 1-j j 1+j 2 -j 4 2-j 3 1-j 2+j j 3-j 2 3 3+j 1

1. When preparing a consolidated balance sheet: A.neither investment in subsidiary nor the subsidiary's shareholders' equity...

1. When preparing a consolidated balance sheet: A.neither investment in subsidiary nor the subsidiary's shareholders' equity will be presented B.the shareholders' equity of the parent will be eliminated but investment in subsidiary will be presented C.investment in subsidiary will be presented but the shareholders' equity of the subsidiary will be eliminated D.both investment in subsidiary and the shareholders' equity of the parent will be eliminated 2.Goodwill is a(n) ________ on the ________. A.longminus−term investment; consolidated balance sheet B.current asset; subsidiary's...

Subjects