Week 8: Inventories Discussion Instructions The lower-of-cost-or-net realizable value (LCNRV) approach was developed to avoid reporting inventory at an amount greater than the benefits it can provide. The LCNRV approach records losses in the period the value of the inventory drops below its cost instead of later in the period that the goods are ultimately … Read more
In a perpetual inventory system, the cost of inventory sold is: Ending inventory is equal to the cost of items on hand plus: Under the gross method, purchase discounts taken are: During periods when costs are rising and inventory quantities are stable, cost of goods sold will be: Nueva Company reported … Read more
The following information is available for a company: Beginning inventory $ 45,000 Inventory purchases (on account) 175,000 Freight charges on purchases (paid in cash) 30,000 Inventory returned to suppliers (for credit) 32,000 Ending inventory 50,000 Sales (on account) 270,000 Cost of inventory sold 168,000 Required: Applying both a perpetual and a periodic inventory system, prepare … Read more
Week 7: Inventory Classification and Systems Discussion Instructions Merchandise inventory involves assets held for sale in the ordinary course of business of wholesale and retail companies. Manufacturing inventories are raw materials or WIP that will be used or consumed in the production of finished goods to be sold. Review the annual report that you chose … Read more
The amount of cash reported as a current asset may not include: Top of Form San Mateo Company had the following account balances at December 31, 2024, before recording bad debt expense for the year: Accounts receivable $ 1,400,000 Allowance for uncollectible accounts (credit balance) 22,000 Credit sales for 2024 1,950,000 San Mateo is considering the following … Read more
Ski West, Incorporated, operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $80. Adult customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from December 1 through April 30. Ski West expects its … Read more
Week 5: Revenue Recognition Discussion Instructions When a company sells a product for cash, it generally recognizes the revenue. However, there are situations when it is not always clear when a company should recognize the revenue. How do you handle a car dealership that sells a warranty contract to its customers for $650 that will … Read more
The four people below have the following investments. Invested Amount Interest Rate Compounding Jerry $ 11,900 12% Quarterly Elaine 14,900 10 Semiannually George 21,900 6 Annually Kramer 17,900 8 Annually Required: 1-a. Calculate the future value at the end of five years. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 1-b. Who has the … Read more
Most real-world income statements are presented using which format? Top of Form Freda’s Florist reported the following before-tax income statement items for the year ended December 31, 2024: Operating income $ 268,000 Income on discontinued operations 58,000 All income statement items are subject to a 25% income tax rate. In its 2024 income statement, Freda’s … Read more
The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2024, included the following accounts: Account Title Debits Credits Sales revenue $ 2,640,000 Cost of goods sold $ 1,560,000 Selling and administrative expense 434,000 Interest expense 56,000 Gain on debt securities 96,000 The gain on … Read more