Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 21, Problem 11RQ
To determine
Identify the misstatements in the valuation of the December 31, 2019, for the deluxe binders assuming FIFO
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Cast Iron Grills, Incorporated, manufactures premium gas barbecue grills. The company reports inventory and cost of goods sold
based on calculations from a LIFO periodic inventory system. Cast Iron's December 31, 2024, fiscal year-end inventory consisted of the
following (listed in chronological order of acquisition):
Units
8,600
5,800
9,600
Unit Cost
$ 900
1,000
1,100
The replacement cost of the grills throughout 2025 was $1,200. Cast Iron sold 45,000 grills during 2025. The company's selling price
is set at 200% of the current replacement cost.
Required:
1. & 2. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2025 under two different assumptions.
First, that Cast Iron purchased 46,000 units and, second, that Cast Iron purchased 24,000 units during the year.
4. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2025 assuming that Cast Iron purchased
46,000 units (as per the first assumption) and 24,000…
The inventory on hand at the end of 2019 for Reddall Company is valued at a cost of $95,000. The following items were not included in this inventory: 1. Purchased goods in transit, under terms FOB shipping point, invoice price $4,200, freight costs $200. 2. Goods out on consignment to Marlman Company, sales price $5,600, shipping costs of $200. 3. Goods sold to Grina Co. under terms FOB destination, invoiced for $1,900 which included $178 freight charges to deliver.
Determine the cost of the ending inventory that Reddall should report on its December 31, 2019, balance sheet, assuming that its selling price is 140% of the cost of the inventory.
Cast Iron Grills, Incorporated, manufactures premium gas barbecue grills. The company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Cast Iron’s December 31, 2024, fiscal year-end inventory consisted of the following (listed in chronological order of acquisition):
Units
Unit Cost
6,200
$ 300
4,600
400
7,200
500
The replacement cost of the grills throughout 2025 was $600. Cast Iron sold 33,000 grills during 2025. The company's selling price is set at 200% of the current replacement cost.
Required:
1. & 2. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2025 under two different assumptions. First, that Cast Iron purchased 34,000 units and, second, that Cast Iron purchased 18,000 units during the year.
4. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2025 assuming that Cast Iron purchased 34,000 units (as per the first assumption) and…
Chapter 21 Solutions
Auditing And Assurance Services
Ch. 21 - Prob. 1RQCh. 21 - Prob. 2RQCh. 21 - Prob. 3RQCh. 21 - Prob. 4RQCh. 21 - Prob. 5RQCh. 21 - Prob. 6RQCh. 21 - Prob. 7RQCh. 21 - Prob. 8RQCh. 21 - Prob. 9RQCh. 21 - Prob. 10RQ
Ch. 21 - Prob. 11RQCh. 21 - Each employee of the Gedding Manufacturing Co., a...Ch. 21 - Prob. 13.1MCQCh. 21 - Prob. 13.2MCQCh. 21 - Prob. 13.3MCQCh. 21 - Prob. 14.1MCQCh. 21 - Prob. 14.2MCQCh. 21 - Prob. 14.3MCQCh. 21 - Prob. 15.1MCQCh. 21 - Prob. 15.2MCQCh. 21 - Prob. 15.3MCQCh. 21 - Prob. 16DQPCh. 21 - Prob. 17DQPCh. 21 - Prob. 18DQPCh. 21 - Prob. 19DQPCh. 21 - Prob. 20DQPCh. 21 - Prob. 21DQPCh. 21 - Prob. 22DQPCh. 21 - Prob. 23DQPCh. 21 - Prob. 24DQPCh. 21 - Prob. 25DQPCh. 21 - Prob. 26DQPCh. 21 - Prob. 27DQPCh. 21 - Prob. 28DQPCh. 21 - Prob. 29DQPCh. 21 - Prob. 30C
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