Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Textbook Question
Chapter 8, Problem 4R
A physical count of merchandise inventory on December 31, 2013, revealed inventory costing $22,000. In the space below, list at least two possible reasons for this balance to be different from the estimate computed in requirement 3.
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Refer to the "Compare" page. Calculate the sum of cost of goods sold and ending inventory balances under each of the four inventory cost flow assumptions. Explain the results.
3. COGS plus ending inventory
FIFO
Spec. Ident.
Wtd. Avg.
LIFO
COGS
Ending Inv.
Total
Northgate Products Corp. sells gadgets and uses the perpetual inventory system. During the month of January 2019, the number of gadgets purchased and sold was as follows:
Purchased
Sold
Balance in inventory
Date
Units
Unit cost
Total $
Units
Unit cost
Total $
Units
Unit cost
Total $
Jan. 1
200
$2
3
400
$3
8
400
$5
10
700
*
15
300
$7
20
300
**
27
400
$7
Units were sold for the following amount:…
Salt Lake Pool Supplies' merchandise inventory data for the year ended December 31, 2026, follow:
View the inventory data.
Read the requirements.
Requirement 1. Assume that the ending merchandise inventory was accidentally overstated by $2,400. What are the correct amounts for cost of goods sold and gross profit for year ended December 31, 2026?
Cost of goods sold in 2026 would be
Requirements
1. Assume that the ending merchandise inventory was accidentally overstated
by $2,400. What are the correct amounts for cost of goods sold and gross
profit for year ended December 31, 2026?
2. How would the inventory error affect Salt Lake Pool Supplies' cost of goods
sold and gross profit for the year ended December 31, 2027, if the error is not
corrected in 2026?
Print
Done
Inventory data
Salt Lake Pool Supplies
Income Statement (Partial)
Year Ended December 31, 2026
Net Sales Revenue
60,000
Cost of Goods Sold:
Beginning Merchandise Inventory
4,200
26,600
Plus: Net Cost of Inventory Purchased…
wer the following independent questions and show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is
2. Assume that the company uses the average cost method. The value of the ending inventory on Decemb
$.
3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is
Chapter 8 Solutions
Excel Applications for Accounting Principles
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- Beginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of the merchandise sold on October 29, and (c) the inventory on October 31.arrow_forwardBeginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of goods sold on October 29, and (c) the inventory on October 31.arrow_forwardThe beginning inventory for Funky Party Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A. Instructions 1. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. 2. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. 3. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the nearest cent. 4. Compare the gross profit and the March 31, 2016, inventories, using the following column headings:arrow_forward
- On December 31, 2013, the year-to-date account balances of selected accounts were as follows: Estimated ending merchandise inventory at December 31, 2013, is __________.arrow_forwardBeginning inventory, purchases, and sales for Meta-B1 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the July 23 purchase, (b) the cost of the merchandise sold on July 26, and (c) the inventory on July 31.arrow_forwardBeginning inventory, purchases, and sales for 30xT are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the May 23 purchase, (b) the cost of the merchandise sold on May 26, and (c) the inventory on May 31.arrow_forward
- Identify the errors in the following schedule of the cost of merchandise sold for the year ended May 31, 2018:arrow_forwardIf a group of inventory items costing $3,200 had been double counted during the year-end inventory count, what impact would the error have on the following inventory calculations? Indicate the effect (and amount) as either (a) none, (b) understated $______, or (c) overstated $______. Table 10.2arrow_forwardThe following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2019: a. Prepare the cost of merchandise sold section of the income statement for the year ended April 30, 2019, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 2019. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?arrow_forward
- Beginning inventory, purchases, and sales for Item Zebra 9x are as follows: Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on April 27 and (b) the inventory on April 30.arrow_forwardData on the physical inventory of Ashwood Products Company as of December 31 follow: Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Instructions Determine the inventory at cost as well as at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: 1. Draw a line through the quantity and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the Lower of C or M column. The first item on the inventory sheet has been completed as an example.arrow_forwardBeginning inventory, purchases, and sales for Item ProX2 are as follows: Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on January 25 and (b) the inventory on January 31.arrow_forward
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