Required information[The following information applies to the questions displayed below.]Luther has a bird shop that sells canaries. Luther maintains accurate records on the number of birds purchased from itssuppliers and the number sold to customers. The records show the following purchases and sales during 2024.DateJanuary 1April 14August 22October 29TransactionsBeginning inventoryPurchasePurchasePurchase(a) Ending inventory(b) Retained earnings(c) Cost of goods sold(d) Net incomeUnits Unit Cost2772122873082722025$32343638January 1 to December 31Sales ($52 each)Luther uses a periodic inventory system and believes there are 36 birds remaining in ending inventory. However, Lutherneglects to make a final inventory count at the end of the year. An employee accidentally left one of the cages open onenight and 10 birds flew away, leaving only 26 birds in ending inventory. Luther is not aware of the lost canaries.Total Cost$8642,4484,3923,306$11,0104. Assuming that ending inventory is correctly counted at the end of 2025, what effect will the inventory error in 2024 have onreported amounts for (a) ending inventory, (b) retained earnings, (c) cost of goods sold, and (d) net income (ignoring tax effects) in2025?

If we understate the beginning inventory or overstate the closing inventory then the cost of goods…

4. Assuming that ending inventory is correctly counted at the end of 2025, what effect will the inventory error in 2024 have on reported amounts for (a) ending inventory, (b) retained earnings, (c) cost of goods sold, and (d) net income (ignoring tax effects) in 2025? (a) Ending inventory (b) Retained earnings (c) Cost of goods sold (d) Net income 2025

4. Assuming that ending inventory is correctly counted at the end of 2025, what effect will the inventory error in 2024 have on reported amounts for (a) ending inventory, (b) retained earnings, (c) cost of goods sold, and (d) net income (ignoring tax effects) in 2025? (a) Ending inventory (b) Retained earnings (c) Cost of goods sold (d) Net income 2025

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Crane Corporation sells item A as part of its product line. Information as to balances on hand, purchases, and sales of item A are given in the following table for the first six months of 2025. Date January 11 January 24 February 8 March 16 June 11 (a) Purchased 1,320 Ending inventory Quantities 700 Sold 340 560 Balance 440 1.760 1,420 860 1,560 Unit Price of Purchase $4.70 $4.80 $5.20 Compute the ending inventory at June 30 under the perpetual LIFO inventory pricing method.
A local manufacturer, who deals with gasolene products, maintains his inventory record using weighted average method. Assuming that the prices would go up, he purchased gasolene on different dates and stored it, to be sold for a higher price. Below are the transactions that were recorded by him in the month September 2022. 02-Sep Purchased 1,200 ltrs. @1.15 pre ltr. 05-Sep Purchased 1,000 ltrs. @1.20 per ltr. 08-Sep Purchased 1,500 ltrs. @1.15 per ltr. 13-Sep Issued 2,000 ltrs. to production 19-Sep Purchased 1,200 ltrs. @1.25 per ltr. 22-Sep purchases 1,000 ltrs. @1.30 per Itr 25-Sep Issued 2,000 Itrs. To production 28-Sep Purchased 800 Itrs. @1.40 per ltr. 30-Sep Purchased 1,000 ltrs. @1.50 per ltr. Please find the value of his closing inventory and value of the issues using weighted average method.
! Required information [The following information applies to the questions displayed below.] The following is sample list of the Speiran Company's transactions completed during 2019. The company's fiscal year ends on December 31. Jan. 8 Purchased merchandise for resale on account. The invoice amount was $14,720; assume a perpetual inventory system. 17 Paid January 8 invoice. Apr. 1 Borrowed $72,000 from Lowell Bank for general use; signed a 12-month, 8% annual interest-bearing note for the money. May 1 Rented office space in one of Speiran Company's buildings to another company and collected six months' rent in advance amounting to $27,000. Required: 1. Prepare journal entries for each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Your answer is partially correct. Knowledge Check Carla Vista Works' uses a periodic inventory system. Its accounting records show the following as of December 31, 2025. Inventory, Dec. 31, 2025 Purchase Returns and Allowances Inventory, Jan. 1, 2025 Cost of goods purchased $ Cost of goods sold $4,050 $ 730 5.900 Compute cost of goods purchased and cost of goods sold. Freight-In Purchases Purchase Discounts 96330 98450 $1,610 96,600 1,150
! Required information [The following information applies to the questions displayed below.] On July 15, 2024, the Niche Car Company purchased 3,000 tires from the Treadwell Company for $30 each. The terms of the sale were 2/10, n/30. Niche uses a perpetual inventory system and the net method of accounting for purchase discounts. Required: 1. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2024. 2. Prepare the journal entry for the payment, assuming instead that it was made on August 15, 2024. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Date 1 July 15, 2024 Inventory Accounts payable 2 July 23, 2024 Accounts payable Interest expense Cash General Journal Debit 88,200 1,800…
Accounting Abacus Ltd undertook the following transactions during May 2022. May. 1 Purchased $18,480 inventory; terms 1/10, n/30. 8 Returned $1,980 of the inventory purchased on May 1. 16 Sold inventory on credit for $8,745. Cost of the inventory sold was $5,700. Required: a) Prepare the journal entries to record the transactions using periodic inventory system. GST apply, and assuming that all the prices are GST inclusive. b) Prepare the journal entries to record the 8th and 16th transactions using perpetual inventory system. Ignore GST.
Questions # 16-20 are based on the information below: Nadal Athletic has the following transactions related to its inventory for the month of August 2021: Date August 1 August 4 August 11 August 13 August 20 August 26 August 29 Transactions Beginning inventory Sale ($150 each) Purchase Sale ($160 each) Purchase Sale ($170 each) Purchase A. $2,210 B. $2,300 C. $2,650 D. $2,630 16. What is the cost of goods sold using FIFO for August? Units 7 5 A. $1,880 B. $2,210 C. $2,300 D. $2,630 9 7 12 10 12 A. $2,150.50 B. $2,347.50 C. $2,029.50 D. $2,480.50 Cost per Unit $130 120 110 17. What is the ending inventory using LIFO at August 31, 2021? 100 Total Cost $910 1,080 1,320 1,200 $4,510 18. What is the ending inventory using weighted-average cost at August 31, 2021?
Data for the next 6 questions: You are accountant for New Horizon Merchandising Company. New Horizon Merchandising Company buys and sells a product called Zoom. Company uses Perpetual Inventory System with LIFO method for inventory valuation. New Horizon uses Net Method for accounting for its purchases and sales. On January 1, 2019, New Horizon’s merchandise inventory on hand consisted of the following: Zoom: Quantity Cost per Unit 1st Purchase 200 $4 2nd Purchase 110 $5 New Horizon Company purchased 300 units of Zoom at $5.50 each plus $99 sales taxes. Terms were 2/10, n/30, FOB Shipping Point.Shipping cost was $51.Provide the necessary journal entry to record the transaction. Debit Credit Assume New Horizon paid for the above purchase within discount period. Provide the necessary journal entry to record the transaction. Debit Credit Assume New Horizon paid for the…
Sanchez Farm Goods sells hay bales and silage to farmers. They use a LIFO inventory system. For 2022, their inventory was valued at $157,417. On their financial statements, they stated that their inventory valued with the FIFO method would have been $168,592 What is Sanchez's LIFO reserve? O 0.934 O $11,175 O 1071 O-$11,175
Data table New Home Income Statement Year Ended December 31, 2019 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income $ 9,200 78,000 87,200 14,400 $ 162,000 $ 72,800 89,200 56,400 32,800 X
Africa Traders is a registered VAT vendor that buys and sells furniture. The business makes use of the periodic inventory system. Use the following information from the accounting records of Africa Traders to calculate the cost of sales on 28 February 2021: R Inventory (1 March 2020) 205 000 Sales 2 864 800 Purchases 1 564 000 Carriage on purchases 24 600 A physical inventory count on 28 February 2021 indicated that the inventory on hand amounted to R460 000. NB: Instructions 1. Do not type the amount with any spaces as separators for thousands (eg: 12141.72) 2. Use a full stop to indicate any decimals (eg: 1000.01) 3. You must enter cents even if it is 0 (eg .00) 4. Only show the amount, do not show the R (eg: 12141.72) Answer:
Required information [The following information applies to the questions displayed below.] Suppose that David has elected to account for inventories and has adopted the last-in, first-out (LIFO) inventory-flow method for his business inventory of widgets (purchase prices below). Widget Number 1 Number 2 Number 3 Widget Number 4 Number 5 Number 6 Purchase Date August 15 October 30 November 10 Cost of goods sold In late December, David sold one widget, and next year David expects to purchase three more widgets at the following estimated prices: Ending inventory Purchase Date Early spring Summer Fall Direct Cost $ 2,100 2,200 2,300 Other Costs $ 100 150 100 LIFO a. What cost of goods sold and ending inventory would David record if he elects to use the LIFO method this year? Total Cost $2,200 2,350 2,400 Estimated Cost $2,600 2,260 2,400