Problem 6-2A Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5)
[The following information applies to the questions
displayed below.]
Greg’s Bicycle Shop has the following transactions related to its
top-selling Mongoose mountain bike for the month of March.
Greg's Bicycle Shop uses a periodic inventory system.
| Date | Transactions | Units | Unit Cost | Total Cost | ||||||||||||
| March | 1 | Beginning inventory | 20 | $ | 250 | $ | 5,000 | |||||||||
| March | 5 | Sale ($400 each) | 15 | |||||||||||||
| March | 9 | Purchase | 10 | 270 | 2,700 | |||||||||||
| March | 17 | Sale ($450 each) | 8 | |||||||||||||
| March | 22 | Purchase | 10 | 280 | 2,800 | |||||||||||
| March | 27 | Sale ($475 each) | 12 | |||||||||||||
| March | 30 | Purchase | 9 | 300 | 2,700 | |||||||||||
| $ | 13,200 | |||||||||||||||
For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase.
rev: 04_13_2020_QC_CS-208026
2. Using FIFO, calculate ending inventory and
cost of goods sold at March 31.
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Ending Inventory |
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Cost of good sold |
3. Using LIFO, calculate ending inventory and
cost of goods sold at March 31.
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Ending Inventory |
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Cost of good sold |
4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. (Round your intermediate and final answers to 2 decimal places.)
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Ending Inventory |
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Cost of good sold |
5. Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average cost amounts to 2 decimal places.)
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Specific Identification |
FIFO |
LIFO |
Weighted- Average cost |
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Sales Revenue |
$ |
$ |
$ |
$ |
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Gross profit |
$ |
$ |
$ |
$ |
In: Accounting
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Revenue |
216,000 |
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Cost of sales |
91,080 |
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Distribution costs |
21,180 |
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Administrative expenses |
23,760 |
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Interest paid |
2,880 |
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Income tax |
1,800 |
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Property, plant and equipment: |
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Carrying amount at 1 November 20X7 |
270,000 |
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Inventories – 31 October 20X8 |
18,000 |
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Trade receivables |
22,500 |
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Bank |
10,800 |
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Payables |
11,880 |
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Deferred tax – 1 November 20X7 |
12,600 |
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8% Loan note – issued 1 November 20X7, repayable 20Y2 |
72,000 |
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Ordinary $1 share capital |
45,000 |
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Retained earnings – 1 November 20X7 |
100,920 |
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460, 200 |
460,200 |
(i) Revenue includes cash sales of £6 million for goods sold in August 20X8 to Abbeyfax plc, a bank. The goods are marked up at 25% on cost. Abbeyfax has the option to require Nemesis Ltd to repurchase these goods on 1 November 20X8 at their original selling price plus a one-off fee of £180,000. Abbeyfax has not taken delivery of the goods, and has always made Nemesis repurchase goods in the past under similar agreements.
(ii) Included within property, plant and equipment is a building with a carrying amount of £4.5 million. On 1 November 20X7 it was revalued to $6 million. The building had an estimated life of twenty five years when purchased ten years prior to the revaluation date. This has not changed as a result of the revaluation. The directors of Nemesis Ltd wish to incorporate this value into the financial statements for the year ended 31 October 20X8.
All other property, plant and equipment is depreciated at 20% per annum on the reducing balance basis.
(iii) On 1 October 20X8, Nemesis closed down its Merry Go Round division. The results of
the division from 1 November 20X7 to the date of closure are included in the above trial balance figures. These results are as follows:
$000
Revenue 9,800
Cost of sales 6,450
Distribution costs 2,040
Admin expenses 1,980
The net assets of the division were sold at a loss of $3.2 million which is currently included
within cost of sales. The Merry Go Round division satisfies the criteria for a discontinued
operation under IFRS5 Non-current Assets Held for Sale and Discontinued Operations.
(iv) The provision for income tax for the year ended 31 October 20X8 has been estimated at $23.4 million. The only temporary differences for deferred taxation purposes are in respect of accelerated capital allowances, which at 31 October 20X8 were $43.2 million. Income tax is charged at 20%.
(v) The company has a share option scheme in operation. The terms of the options are that option holders are permitted to subscribe for 1 equity share for every option held at a price of £2 per share. At 1 November 20X7, 20 million share options were in issue. On 1 May 20X8, the holders of 10 million options exercised their option to purchase, and 14 million new options were issued on the same terms as the existing options. During the year ended 31 October 20X8, the average market price of an equity shares in Nemesis Ltd was £4.00.
Required:
Prepare a statement of profit or loss and other comprehensive income for the year ended
31 October 20X8 for Nemesis together with a statement of financial position and a statement of changes in equity at that date.
In: Accounting
The customer billing and collection functions of the ThanksMe Company, a small paint manufacturer, are attended to by a receptionist, an accounts receivable clerk, and a cashier who also serves as a secretary. The company’s paint products are sold to wholesalers and retail stores.
The following describes all the procedures performed by the employees of the ThanksMe Company regarding customer billings and collections:
1. The mail is opened by the receptionist, who gives the customers’ purchase orders to the accounts receivable clerk. Fifteen to twenty orders are received each day. Under instructions to expedite the shipment of orders, the accounts receivable clerk at once prepares a five-copy sales invoice form, which is distributed as follows:
a) Copy 1 is the customer billing copy and is held by the accounts receivable clerk until notice of shipment is received.
b) Copy 2 is the accounts receivable department copy and is held for the ultimate posting of the accounts receivable records.
c) Copies 3 and 4 are sent to the shipping department.
d) Copy 5 is sent to the storeroom as authority for release of the goods to the shipping department.
2. After the paint order has been moved from the storeroom to the shipping department, the shipping department prepares the bill of lading and labels the cartons. Sales Invoice Copy 4 is inserted in the carton as a packing slip. After the trucker has picked up the shipment, the customer’s copy of the bill of lading and Copy 3, on which any undershipments are noted, are returned to the accounts receivable clerk. The company does not back order in the event of undershipments; customers are expected to reorder the merchandise. The company’s copy of the bill of lading is filed by the shipping department.
3. When Copy 3 and the customer’s copy of the bill of lading are received by the accounts receivable clerk, Copies 1 and 2 are completed by numbering them and inserting quantities shipped unit prices, extensions, discounts, and totals. The accounts receivable clerk then mails Copy 1 and the copy of the bill of lading to the customer. Copies 2 and 3 are stapled together.
4. The individual accounts receivable ledger cards are posted by the accounts receivable clerk using a one-write system, whereby the sales register is prepared as a carbon copy of the postings. Postings are made from Copy 2, which is then filed, along with staple-attached Copy 3, in numerical order. Monthly, the general ledger clerk summarizes the sales register for posting to the general ledger accounts.
5. Since the ThanksMe Company is short of cash, the deposit of receipts is also expedited. The receptionist turns over all mail receipts and related correspondence to the accounts receivable clerk, who examines the checks and determines that the accompanying vouchers or correspondence contain enough detail to permit the posting of the accounts. The accounts receivable clerk then endorses the checks and gives them to the cashier, who prepares the daily deposit. No currency is received in the mail, and no paint is sold over the counter at the factory.
6. The accounts receivable clerk uses the vouchers or correspondence that accompanied the checks to post the accounts receivable ledger cards. The one-write system prepares the cash receipts register as a carbon copy of the postings. Monthly, the general ledger clerk summarizes the cash receipts register for posting to the general ledger accounts. The accounts receivable clerk also corresponds with customers about unauthorized deductions for discounts, freight or advertising allowances, returns, and so on and prepares the appropriate credit memos. Disputed items of large amounts are turned over to the sales manager for settlement. Each month the accounts receivable clerk prepares a trial balance of the open accounts receivable and compares the resulting total with the general ledger control account for accounts receivable.
Required:
I) Identify four (4) internal control weaknesses in the ThanksMe Company’s procedures related to customer billings and remittances and the accounting for these transactions.
II) For each weakness, identify one (1) error or irregularity that could result.
III) For each weakness, list one (1) substantive audit procedure for testing the significance of the potential error.
In: Accounting
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost/revenue relationship for the coming year is expected to follow the same pattern as in the prior year income statement for the year ending March 31 is as follows s
Sales (200,000 units @ 2.5 Each) Rs. 5, 00,000
Variable cost 3, 00,000
Contribution margin 2, 00,000
Less Fixed cost 100,000
Profit before tax 100,000
Less tax 35,000
Profit after tax 65,000
Required
The company management feels that it should earn at least Rs.10, 000 pre taxes per annum on the new investment what sales volume is required to enable the company to maintain existing profit.
In: Accounting
| II. Ending June 30 records for June 30 for ABC Company | |||||||
| Revenue | 1,600,000 | ||||||
| Raw Materials Purchased in Month | 150,000 | ||||||
| Direct Labor Cost | 55,000 | ||||||
| Advertising Expense | 25,000 | ||||||
| Rent on Factory | 42,000 | ||||||
| Sales Commissions | 70,000 | ||||||
| Maintenance Expense on factory Equip. | 22,000 | ||||||
| Supplies for the Factory | 3,500 | ||||||
| Depreciation on Factory Equipment | 35,000 | ||||||
| Indirect labor Cost | 50,600 | ||||||
| Utilities Expense for Factory | 12,000 | ||||||
| Depreciation on Sales Office Cars | 22,000 | ||||||
| Raw Matl | WIP | Finished Goods | |||||
| Beginning Inventory | 12,000 | 15,000 | 35,000 | ||||
| Ending Inventory | 8,000 | 20,000 | 40,000 | ||||
| Prepare the Cost of Goods Manufactured and Cost of goods sold for the month below | |||||||
| Create an Income Statement for the month (Simple format, include period costs) | |||||||
In: Accounting
In: Economics
Can annual sports team revenues be used to predict franchise values?
Team Revenue ($mil) Value ($mil)
Team 1 552 2815
Team 2 677 3436
Team 3 372 1329
Team 4 625 3198
Team 5 557 1847
Team 6 313 691
Team 7 339 856
Team 8 354 849
Team 9 396 867
Team 10 219 483
Team 11 257 581
Team 12 225 514
Team 13 516 415
Team 14 203 348
Team 15 154 328
Team 16 176 327
Team 17 161 308
Team 18 333 599
Team 19 413 864
Team 20 156 296
A. Predict the mean value of a soccer franchise that generates $250 million of annual revenue.
B. Compute the coefficient of determination, r2, and interpret its meaning.
C. At the 0.05 level of significance, is there evidence of a linear relationship between the annual revenues generated and the value of a soccer franchise?
- the test statistic is ?
D. Construct a 95% confidence interval estimate of the mean value of all soccer franchises that generate $250 million of annual revenue.
E. Construct a 95% prediction interval of the value of an individual soccer franchise that generates $250 million of annual revenue.
In: Statistics and Probability
P4.1B: Karlin Company Information for 2020.
Retained earnings , January 1, 2020 2,250,000
Sales revenue 53,000,000
Cost of goods sold 33,000,000
Interest revenue 120,000
Selling and administrative expenses 8,900,000
Write-off of goodwill 2,100,000
Income taxes for 2020 3,650,000
Loss on the sale of investments 53,000
Loss due to hurricane damage 1,100,000
Gain on the disposition of the retail division (net of tax) 23,000
Loss on operations of the retail division (net of tax) 231,000
Dividends declared on common stock 350,000
Dividends declared on preferred stock 125,000
INSTRUCTIONS:1. Prepare a multiple-step income statement 2. Prepare a separate Retained Earnings StatementOn September 15, Karlin sold the retail operations to Shark CorpAssume that 60,000 shares of common stock are outstanding.
In: Accounting
Lifetime Escapes generates average revenue of $7 970 per person on its 7-day package tours to wildlife parks in Zimbabwe. The variable costs per person are as follows:
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Airfare |
$1600 |
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Hotel accommodations |
3000 |
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Meals |
500 |
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Ground transportation |
400 |
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Park tickets and other costs |
500 |
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Total |
$6000 |
Annual fixed costs total $400 000.
Required:
question is correct could you please solve ASAP
In: Accounting
16-20
Any balance in an unearned revenue account is reported as a(n)
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current liability |
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long-term debt |
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revenue |
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unearned liability |
If stock is issued for less than par value, the account
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Paid-In Capital in Excess of Par Value is credited. |
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Paid-In Capital in Excess of Par Value is debited if a debit balance exists in the account |
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Paid-In Capital in Excess of Par Value is debited if a credit balance exists in the account. |
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Retained Earnings is credited |
On October 1, Jerry's Carpet Service borrows $250,000 from First National Bank on a 3-month, $250,000, 8% note. The entry by Jerry's Carpet Service to record payment of the note and accrued interest on January 1 is
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Notes Payable debit 255,000 Cash credit 255,000 |
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Notes Payable debit 250,000 Interest Payable debit 5,000 Cash credit 255,000 |
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Notes Payable debit 250,000 Interest Payable debit 20,000 Cash credit 270,000 |
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Notes Payable debit 250,000 Interest Expense debit 5,000 Cash credit 255,000 |
On January 31, Exploration Co. reaquired 22,500 shares of its common stock at $31 per share. On April 20, the company sold 12,800 of the reacquired shares at $40 per share. On October 4, the company sold the remaining shares at $28 per share. What is the journal entry for October 4?
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Debit cash 270,400; Debit Paid in capital treasury stock $29,100; Credit treasury stock 299,500. |
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Debit cash 271,600; Debit Paid in capital treasury stock $29,100; Credit treasury stock 300,700. |
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Debit cash 512,000; Credit Paid in capital treasury stock $396,800; Credit treasury stock $115,200. |
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Debit cash 697,500; Credit Paid in capital treasury stock $115,200; Credit treasury stock $582,300. |
A stock split is a process by which a corporation reduces the par or stated value of its common stock and issues a proprotionate numer of additional shares.
True
False
In: Accounting