Problem 6-2AA Periodic: Alternative cost flows LO P3

[The following information applies to the questions displayed below.]

Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March.  

For specific identification, the March 9 sale consisted of 50 units from beginning inventory and 460 units from the March 5 purchase; the March 29 sale consisted of 130 units from the March 18 purchase and 210 units from the March 25 purchase.

Required.

1. Compute cost of goods available for sale and the number of units available for sale.

2. Compute the number of units in ending inventory.

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round your average cost per unit to 2 decimal places.)

4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places and final answers to nearest whole dollar.)

Please provide examples of the following:

Chapter 7

1) What makes up “cash and cash equivalents”

2) Journal entry to records sale of a product using the “gross method for accounting for cash discounts”.

3) Journal entry to record receipt of payment when using “gross method of accounting for cash discounts” when payment is within discount terms and also when payment is received after the discount term has expired

4) Journal entry for sales allowances

5) Know increases and decreases in Allowance for Sales Returns under the New Revenue Recognition rules

6) Bad Debts;

a) Estimating allowance for bad debts under both the percentage of sales and the percentage of assets method (ageing of receivables)

b) Determining the ending balance in both Accounts Receivable and Allowance for Doubtful Accounts when given beginning balance in the two accounts and activity for the year.

c) Same as (b) but for Bad Debt Expense

6) Bank Reconciliation – determining correct cash balance

a) Deposits in transit are added to bank statement balance

b) Outstanding checks are deducted from bank statement balance

c) Non-sufficient-fund (NSF) checks are deducted from general ledger balance, both for the amount of the check and any fee charged by the bank

d) Service charges by the bank on bank statement are deducted from general ledger balance

e) Collection by the bank of notes receivable and interest earned by a company that is reported on the bank statement are added to general ledger balance

f) Any errors by the company must be added to or deducted from general ledger balance

Lecondo Company is engaged in the manufacture and sale of fitness apparel. Several years ago it bought a health food business that has incurred losses since its acquisition. In 2018, the company sold the health food business. The results of operations and other activities for 2018 are summarized below.

                   Fitness Apparel        Health foods

Net sales               $17,400,000           $2,600,000

Cost of goods sold              8,100,000              1,700,000

Other operating expenses          4,700,000             1,200,000

Other:

The health food business was sold in September 2018 at a disposal loss of $500,000.

Treasury stock that had been acquired in 2017 for $130,000 was sold in 2018 for $195,000. The difference between cost and reissue price is not taxable.

During 2018, Lecondo sold 10,000 shares of its previously unissued $10 par value common stock to the public at a price of $27 per share.

Interest revenue of $2,000 was earned during 2018.

Cash dividends declared and paid during 2018 amounted to $700,000.

The fitness apparel division sold land at a $98,000 gain during 2018.

All of the foregoing amounts are before considering the effects of income taxes. The income tax rate is 40%.

Required: Calculate the following amounts that would appear on Lecondo’s income statement. Be alert for items that should not be included in the computation of net income.

Gross profit

Operating income

Income from continuing operations before taxes

Income from continuing operations

Net income

Check figures:

b. Operating income, $4,600,000

c. Income from continuing operations (before taxes), $4,700,000

d. Income from continuing operations (after taxes), $2,820,000

e. Net income, $2,340,000

1)Matt and Meg Comer are married and file a joint return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $64,200. Meg works part-time at the same university. She earns $31,200 a year. The couple does not itemize deductions. Other than salary, the Comers’ only other source of income is from the disposition of various capital assets (mostly stocks). (Use the 2016 tax rate schedules.) (Round final answers to the nearest whole dollar amount.)

a. What is the Comers’ tax liability for 2018 if they report the following capital gains and losses for the year?

Short-term capital gains$9,040

Short-term capital losses (2,040)

Long-term capital gains 15,070

Long-term capital losses (6,070)

The answer is not $9,122

b) What is the Comer's tax liability for 2018 if they report the following capital gains and losses for the years?

Short term capital gains $1,500

Short term capital losses 0

Long term capital gains 13,080

Long term capital losses (10,040)

The answer is not $8,370

Listed below are student evaluation ratings of​ courses, where a rating of 5 is for​ "excellent." The ratings were obtained at one university in a state. Construct a confidence interval using a 99​%

confidence level. What does the confidence interval tell about the population of all college students in the​ state?

4.0​, 3.0​,4.1​,4.8​, 3.0​ ,4.3​ ,3.7​ ,4.9​, 4.2​, 4.2​ ,4.1​ ,3.9 ​,3.4 ​,4.0​, 4.0

What is the confidence interval for the population mean μ​?

_____<μ<____?

​(Round to two decimal places as​ needed.)

What does the confidence interval tell about the population of all college students in the​ state? Select the correct choice below​ and, if​ necessary, fill in the answer​ box(es) to complete your choice.

A.We are 99​% confident that the interval from____ to____ actually contains the true mean evaluation rating.

​(Round to one decimal place as​ needed.)

B.We are confident that 99​% of all students gave evaluation ratings between _____ and______?

​(Round to one decimal place as​ needed.)

C.The results tell nothing about the population of all college students in the​ state, since the sample is from only one university.

Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $68,000. Meg works part time at the same university. She earns $35,500 a year. The couple does not itemize deductions. Other than salary, the Comers’ only other source of income is from the disposition of various capital assets (mostly stocks). (Use the tax rate schedules,Dividends and Capital Gains Tax Rates.) (Round your final answers to the nearest whole dollar amount.)

a. What is the Comers’ tax liability for 2020 if they report the following capital gains and losses for the year?

Short-term capital gains $ 11,500

Short-term capital losses (4,500)

Long-term capital gains 17,500

Long-term capital losses (8,500)

b. What is the Comers’ tax liability for 2020 if they report the following capital gains and losses for the year?

a) The 10 members of the committee have to choose one president and two vice presidents (these have to be three different people). In how many ways can they choose these officers? (Note: here is no distinction between the two vice presidents; there is not a “first” VP and a “second” VP).

b) Three couples go to a movie theater. They sit in consecutive seats such that each couple is seating together, that is each person is seating next to his/her partner. If there are 6 seats available, in how many ways can they sit?

c) A university wants to assign a three digit number to each classroom of a new building. They can use the digits {1,2,3,4,5} but they cannot use any digit more than once. How many classroom numbers can they assign if the numbers have to be less than 250?

d) The University wants to select 4 students for a feedback survey. They want all four students from either Prof. X’s section or Prof. Y’s section. Prof. X has 40 students in his class and Prof. Y has 30 students in his class. How many selections are possible?

The manager of a gasoline supply corporation wants to estimate the actual amount of gasoline contained in standard 42-gallon barrels purchased from a nationally known manufacturer. The manufacturer’s specifications state that the amount of gasoline is normally distributed with a standard deviation of 0.65 gallon. A random sample of 25 barrels is selected, and the sample mean amount of gasoline per 42-gallon barrel is 42.15 gallons. Construct a 90% confidence interval estimate for the population mean amount of gasoline contained in a standard 42-gallon barrel.

Select one:

a. 42 ± 1.645 (0.65) / 5

b. 42.15 ± 1.7109 (0.65) / 25

c. 42 ± 1.7109 (0.65) / 25

d. 42.15 ± 1.645 (0.65) / 5

According to the regulation of a certain university, an undergraduate student may take a course more than once and only the course grade of the last attempt will appear on the student’s transcript. Assuming that a student took the course “University Mathematics” several times and the probability of him passing the course each time is 0.45. What is the probability that he passed the course at least two times out of five attempts?

Select one:

a. 0.7941

b. 0.3369

c. 0.7438

d. 0.6631

Matt and Meg Comer are married. They do not have any children. Matt works as a history professor at a local university and earns a salary of $64,000. Meg works part-time at the same university. She earns $21,000 a year. The couple does not itemize deductions. Other than salary, the Comers’ only other source of income is from the disposition of various capital assets (mostly stocks). Assume they file a joint return. (Use the tax rate schedules.) (Round final answers to the nearest whole dollar amount.)

a. What is the Comers’ tax liability for 2017 if they report the following capital gains and losses for the year?

Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $66,450. Meg works part-time at the same university. She earns $31,950 a year. The couple does not itemize deductions. Other than salary, the Comers’ only other source of income is from the disposition of various capital assets (mostly stocks). (Use the tax rate schedules ,Dividends and Capital Gains Tax Rates.) (Round final answers to the nearest whole dollar amount.)

a. What is the Comers’ tax liability for 2018 if they report the following capital gains and losses for the year?