# Chapter 6 Homework BRIEF EXERCISE 6-6

Size: px
Start display at page:

Transcription

1 Chapter 6 Homework BRIEF EXERCISE 6-6 Dec. 31 Sales ,000 Merchandise Inventory (December 31)... 90,000 Purchase Returns and Allowances... 11,000 Capital ,000 Dec. 31 Capital ,000 Merchandise Inventory (January 1)... 60,000 Purchases ,000 Freight In... 16,000 BRIEF EXERCISE 6-7 Goods available for sale (GAS): Units Dollars P 300 X \$6 = \$1,800 P 400 X \$7 = 2,800 P 300 X \$8 = 2,400 GAS 1,000 \$7,000 -EI 400 CGS 600 (a) FIFO

2 CGS: 300 x \$6 = \$1, x \$7 = 2, = \$3,900 EI: 300 x \$8 = \$2, x \$7 = = \$3,100 Check: CGS + EI = GAS \$3,900 + \$3,100 = \$7,000 (b) Weighted Average Cost Weighted average unit cost: \$7,000 1,000 = \$7 CGS: 600 x \$7 = \$4,200 EI: 400 x \$7 = \$2,800 Check: CGS + EI = GAS \$4,200 + \$2,800 = \$7,000

3 BRIEF EXERCISE 6-7 (Continued) (c) LIFO CGS: 300 x \$8 = \$2, x \$7 = 2, = \$4,500 EI: 300 x \$6 = \$1, x \$7 = = \$2,500 Check: CGS + EI = GAS \$4,500 + \$2,500 = \$7,000 BRIEF EXERCISE 6-8 (a) LIFO gives the highest inventory valuation when prices are falling. This is because the cost of the units purchased earlier, at a higher cost, are assumed to be still in inventory. (b) FIFO gives the highest cost of goods sold amount. This is because the cost of the units purchased earlier, at a higher cost, are assumed to have been sold first and are allocated to cost of goods sold. (c) In selecting a cost flow method, the company should consider their type of inventory and its actual physical flow. While it is not essential to match the actual physical flow to the assumed cost flow method, it does give the company an indication as to its flow of costs throughout the period. What is important is choosing a method that best matches these costs to the revenue they generate.

4 BRIEF EXERCISE 6-9 BI + CGP = GAS EI = CGS - U\$7,000 = O\$7,000 Sales CGS = NI - O\$7,000 = U\$7,000 The understatement of ending inventory caused cost of goods sold to be overstated \$7,000 and net income to be understated \$7,000. The correct net income for 2002 is \$97,000 (\$90,000 + \$7,000). A = L + OE U\$7,000 = U\$7,000 Total assets and owner s equity in the balance sheet will both be understated by the amount that ending inventory is understated, \$7,000. Remember that if net income is understated, then owner s equity is also understated as net income is a component of owner s equity. Check your work by ensuring that the accounting equation balances. EXERCISE 6-4 Co. 1 Co. 2 Co. 3 Co. 4 BI \$ 250 \$ 120 \$1,000 (j) \$ 2,960 + P \$1,500 \$1,080 (g) \$7,500 \$44,590 - PR&A 40 (d) (k) 260 = NP (a) 1,460 1,020 7,210 44,330 + FI 110 (e) 210 (h) 730 2,240 = CGP + CGP (b) 1,570 (b) 1,570 1,230 1,230 7,940 7,940 (l) 46,570 (l) 46,570 = CGAS 1,820 1,350 (i) 8,940 49,530

5 - EI 310 (f) 100 1,450 6,230 =CGS (c) 1,510 1,250 7,490 43,300 Supporting Detail: (a) \$1,460 (\$1,500 - \$40) (g) \$7,500 (\$290 + \$7,210) (b) \$1,570 (\$1,460 + \$110) (h) \$730 (\$7,940 - \$7,210) (c) \$1,510 (\$1,820 - \$310) (i) \$8,940 (\$1,000 + \$7,940) (d) \$60 (\$1,080 - \$1,020) (j) \$2,960 (\$49,530 - \$46,570 from (l)) (e) \$210 (\$1,230 - \$1,020) (k) \$260 (\$44,590 - \$44,330) (f) \$100 (\$1,350 - \$1,250) (l) \$46,570 (\$44,330 + \$2,240)

6 EXERCISE 6-5 (a) OKANAGAN COMPANY Income Statement For the Year Ended January 31, 2003 Sales revenues Sales... \$312,000 Less: Sales returns and allowances... 13,000 Net sales... \$299, 000 Cost of goods sold Inventory, February 1, \$ 42,000 Purchases... \$200,000 Less: Purchase returns and allowances. 6,000 Net purchases ,000 Add: Freight in... 10,000 Cost of goods purchased ,000 Cost of goods available for sale ,000 Inventory, January 31, ,000 Cost of goods sold ,000 Gross profit ,000 Operating expenses Salary expense... \$ 61,000 Rent expense... 20,000 Insurance expense... 12,000 Freight out... 7,000 Total operating expenses ,000 Net income... \$ 16,000

7 EXERCISE 6-5 (Continued) (b) Jan. 31 Sales ,000 Merchandise Inventory (Jan. 31, 2003)... 63,000 Purchase Returns and Allowances... 6,000 Capital , Capital ,000 Merchandise Inventory (Feb. 1, 2002)... 42,000 Purchases ,00 Freight In... 10,000 Salary Expense... 61,000 Rent Expense... 20,000 Insurance Expense... 12,000 Freight Out... 7,000 Sales Returns and Allowances... 13,000 EXERCISE 6-6 (a) FIFO Cost of Goods Sold: (#1012) \$500 + (#1045) \$450 = \$950 (b) It could choose to sell specific units purchased at specific costs if it wished to impact income selectively. If it wished to minimize net income, it would choose to sell the units purchased at higher costs. In this case, the cost of goods sold would be \$950 [(#1012) \$500 + (#1045) \$450]. If it wished to minimize net income, it would choose to sell the units purchased at lower costs. In this case, the cost of goods sold would be \$850 [(#1045) \$450 + (#1056) \$400]. (c) I recommend Discount uses the FIFO method. FIFO provides a more relevant balance sheet valuation for decision making (closer to replacement cost) and reduces the opportunity to manipulate net income.

8 Note to Instructor: This answer may vary depending on the method the student chooses.

9 EXERCISE 6-7 (a) FIFO Cost of Goods Sold: Date Units Unit Cost Total Cost 5/1 5/15 5/24 Ending Inventory: \$ \$ \$670 Date Units Unit Cost Total Cost 5/24 20 \$12 \$240 Proof: CGS + EI = GAS \$670 + \$240 = \$910 (b) WEIGHTED AVERAGE \$ = \$10.11 average unit cost Cost of Goods Sold: 70 x \$10.11 = \$708 (rounded) Ending Inventory: 20 x \$10.11 = \$202 (rounded) Proof: CGS + EI = GAS \$708 + \$202 = \$910

10

11 EXERCISE 6-8 Beginning inventory (200 X \$5)... \$1,000 Purchases: June 12 (300 X \$6)... \$1,800 June 23 (500 X \$7)... 03,500 5,300 Cost of goods available for sale (1,000 units)... 6,300 Less: Ending inventory (180 units) Cost of goods sold (820 units) (a) (1) FIFO Cost of Goods Sold: Date Units Unit Cost Total Cost 6/1 6/12 6/23 Ending Inventory: \$5 6 7 \$1,000 1,800 2,240 \$5,040 Date Units Unit Cost Total Cost 6/ \$7 \$1,260 Proof: CGS + EI = GAS \$5,040 + \$1,260 = \$6,300 (2) LIFO Cost of Goods Sold: Date Units Unit Cost Total Cost 6/23 6/12 6/1 Ending Inventory: \$7 6 5 \$3,500 1, \$5,400 Date Units Unit Cost Total Cost 6/1 180 \$5 \$900

12 Proof: CGS + EI = GAS \$5,400 + \$900 = \$6,300

13 EXERCISE 6-8 (Continued) (b) The FIFO method will produce the higher ending inventory because costs have been rising. Under this method, the earliest costs are assigned to cost of goods sold, and the latest costs remain in ending inventory. For Dene Company, the ending inventory under FIFO is \$1,260 compared to \$900 under LIFO. (c) The LIFO method will produce the higher cost of goods sold for Dene Company. Under LIFO, the most recent costs are charged to cost of goods sold, and the earliest costs are included in the ending inventory. The cost of goods sold is \$5,400 compared to \$5,040 under FIFO. EXERCISE 6-5 (a) OKANAGAN COMPANY Income Statement For the Year Ended January 31, 2003 Sales revenues Sales... \$312,000 Less: Sales returns and allowances... 13,000 Net sales... \$299, 000 Cost of goods sold Inventory, February 1, \$ 42,000 Purchases... \$200,000 Less: Purchase returns and allowances. 6,000 Net purchases ,000 Add: Freight in... 10,000 Cost of goods purchased ,000 Cost of goods available for sale ,000 Inventory, January 31, ,000 Cost of goods sold ,000 Gross profit ,000

14 Operating expenses Salary expense... \$ 61,000 Rent expense... 20,000 Insurance expense... 12,000 Freight out... 7,000 Total operating expenses ,000 Net income... \$ 16,000

15 EXERCISE 6-5 (Continued) (b) Jan. 31 Sales ,000 Merchandise Inventory (Jan. 31, 2003)... 63,000 Purchase Returns and Allowances... 6,000 Capital , Capital ,000 Merchandise Inventory (Feb. 1, 2002)... 42,000 Purchases ,00 Freight In... 10,000 Salary Expense... 61,000 Rent Expense... 20,000 Insurance Expense... 12,000 Freight Out... 7,000 Sales Returns and Allowances... 13,000 EXERCISE 6-6 (a) FIFO Cost of Goods Sold: (#1012) \$500 + (#1045) \$450 = \$950 (b) It could choose to sell specific units purchased at specific costs if it wished to impact income selectively. If it wished to minimize net income, it would choose to sell the units purchased at higher costs. In this case, the cost of goods sold would be \$950 [(#1012) \$500 + (#1045) \$450]. If it wished to minimize net income, it would choose to sell the units purchased at lower costs. In this case, the cost of goods sold would be \$850 [(#1045) \$450 + (#1056) \$400]. (c) I recommend Discount uses the FIFO method. FIFO provides a more relevant balance sheet valuation for decision making (closer to replacement cost) and reduces the opportunity to manipulate net income.

16 Note to Instructor: This answer may vary depending on the method the student chooses.

17 EXERCISE 6-7 (a) FIFO Cost of Goods Sold: Date Units Unit Cost Total Cost 5/1 5/15 5/24 Ending Inventory: \$ \$ \$670 Date Units Unit Cost Total Cost 5/24 20 \$12 \$240 Proof: CGS + EI = GAS \$670 + \$240 = \$910 (b) WEIGHTED AVERAGE \$ = \$10.11 average unit cost Cost of Goods Sold: 70 x \$10.11 = \$708 (rounded) Ending Inventory: 20 x \$10.11 = \$202 (rounded) Proof: CGS + EI = GAS \$708 + \$202 = \$910

18

19 EXERCISE 6-8 Beginning inventory (200 X \$5)... \$1,000 Purchases: June 12 (300 X \$6)... \$1,800 June 23 (500 X \$7)... 03,500 5,300 Cost of goods available for sale (1,000 units)... 6,300 Less: Ending inventory (180 units) Cost of goods sold (820 units) (a) (1) FIFO Cost of Goods Sold: Date Units Unit Cost Total Cost 6/1 6/12 6/23 Ending Inventory: \$5 6 7 \$1,000 1,800 2,240 \$5,040 Date Units Unit Cost Total Cost 6/ \$7 \$1,260 Proof: CGS + EI = GAS \$5,040 + \$1,260 = \$6,300 (2) LIFO Cost of Goods Sold: Date Units Unit Cost Total Cost 6/23 6/12 6/1 Ending Inventory: \$7 6 5 \$3,500 1, \$5,400 Date Units Unit Cost Total Cost 6/1 180 \$5 \$900

20 Proof: CGS + EI = GAS \$5,400 + \$900 = \$6,300

21 EXERCISE 6-8 (Continued) (b) The FIFO method will produce the higher ending inventory because costs have been rising. Under this method, the earliest costs are assigned to cost of goods sold, and the latest costs remain in ending inventory. For Dene Company, the ending inventory under FIFO is \$1,260 compared to \$900 under LIFO. (c) The LIFO method will produce the higher cost of goods sold for Dene Company. Under LIFO, the most recent costs are charged to cost of goods sold, and the earliest costs are included in the ending inventory. The cost of goods sold is \$5,400 compared to \$5,040 under FIFO.

22 EXERCISE 6-9 (a) Cost of Goods Available for Sale \$6,300 Total Units Available for Sale 1,000 = Weighted Average Unit Cost \$6.30 Ending Inventory: 180 X \$6.30 = \$1,134 Cost of Goods Sold: 820 X \$6.30 = \$5,166 Proof: CGS + EI = GAS \$5,166 + \$1,134 = \$6,300 (b) Ending inventory is lower than FIFO (\$1,260) and higher than LIFO (\$900). In contrast, cost of goods sold is higher than FIFO (\$5,040) and lower than LIFO (\$5,400). When prices are changing, the average cost method will always produce this type of result. That is, average results will fall somewhere between those of FIFO and LIFO. (c) The average cost method uses a weighted average unit cost, not a simple average of unit costs (\$5 + \$6 + \$7 = \$18 3 = \$6).

23 EXERCISE 6-10 (a) Periodic Inventory Method Purchases (100 x \$10)... 1,000 Accounts Payable... 1,000 Accounts Receivable (70 x \$15)... 1,050 Sales... 1,050 Perpetual Inventory Method Merchandise Inventory (100 x \$10)... 1,000 Accounts Payable... 1,000 Accounts Receivable (70 x \$15)... 1,050 Sales... 1,050 Cost of Goods Sold (70 x \$10) Merchandise Inventory (b) 1. FIFO 2. LIFO 3. Specific Identification 4. LIFO

24 EXERCISE 6-11 SELES HARDWARE Income Statement (Partial) Beginning inventory... Cost of goods purchased... Cost of goods available for sale... Corrected ending inventory... Cost of goods sold... a \$30,000 \$5,000 = \$25,000 b \$35,000 + \$4,000 = \$39,000 SOLUTIONS TO PROBLEMS PROBLEM 6-1A \$020, , , ,000 a \$145,000 \$025, , , ,000 b \$161, Title to the goods does not transfer to the customer until March 2. Include the \$800 in ending inventory. 2. Kananaskis owns the goods once they are shipped on February 26. Include inventory of \$ Include \$500 in inventory. 4. Exclude the items from Kananaskis inventory. 5. Title of the goods does not transfer to Kananaskis until March 2. Exclude this amount from the February 28 inventory. 6. The sale will be recorded on February 26. The goods should be excluded from Kananaskis inventory at the end of February.

25 PROBLEM 6-2A ONLY A PARTIAL ANSWER GUIDE ******* for this question. (a) GENERAL JOURNAL J1 Date Account Titles and Explanation Debit Credit Apr. 5 Purchases... 1,600 Accounts Payable... 1,600 7 Freight In Cash Accounts Payable Purchase Returns and Allowances

### 2 Under a perpetual inventory system merchandise is purchased for cash. Which is the correct journal entry to record this purchase?

KRUG PRACTICE TEST ACCTG 1 - CHAP 5,6 PRACTICE TEST -- The following is a practice test for Accounting 1, Chapters 5 and 6 It is only a representation of wha the test could be like. It is not a guarantee

### Perpetual vs. Periodic Inventory Accounting

Chapter 6 INVENTORY In the balance sheet of merchandising and manufacturing companies, inventory is frequently the most significant current asset. In the income statement, inventory is vital in determining

### Week 9/ 10, Chap7 Accounting 1A, Financial Accounting

Week 9/ 10, Chap7 Accounting 1A, Financial Accounting Reporting and Interpreting Cost of Goods Sold and Inventory Instructor: Michael Booth Understanding the Business Primary Goals of Inventory Management

### Chapter 8 Topic 1. Chapter 8: Topic 1 Valuation of Inventories The Basics. Student Learning Outcomes. Inventories: Financial Analysis

Chapter 8: Topic 1 Valuation of Inventories The Basics Dr. Chula King ACG 3101 Student Learning Outcomes Perpetual versus periodic inventory system Effects of inventory errors Items to include in inventory

### ACCT 652 Accounting. Review of last week. Review of last time (2) 1/25/16. Week 3 Merchandisers and special journals

ACCT 652 Accounting Week 3 Merchandisers and special journals Some slides Times Mirror Higher Education Division, Inc. Used by permission Michael D. Kinsman, Ph.D. Review of last week Some highlights of

### Chapter 6. An advantage of the periodic method is that it is a easy system to maintain.

Chapter 6 Periodic and Perpetual Inventory Systems There are two methods of handling inventories: the periodic inventory system, and the perpetual inventory system With the periodic inventory system, the

### SOLUTIONS. Learning Goal 27

Learning Goal 27: Record, Report, and Control Merchandise Inventory S1 Learning Goal 27 Multiple Choice 1. c FIFO puts the oldest costs into cost of goods sold and in a period of rising prices the oldest

### BUS312A/612A Financial Reporting I. Homework Inventory Chapter 8

BUS312A/612A Financial Reporting I Homework Inventory Chapter 8 Objectives Chapter 8 You should be able to Discuss the relevance of inventory methods Compare the periodic and perpetual inventory systems

### Click to edit Master title style. Inventories

1 7 Inventories 1 2 After studying this chapter, you should be able to: 1. Describe the importance of control over inventory. 2. Describe three inventory cost flow assumptions and how they impact the income

### CHAPTER 9. Inventories ASSIGNMENT CLASSIFICATION TABLE. Brief. B Problems. A Problems. 1. Describe the steps in determining inventory quantities.

CHAPTER 9 Inventories ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems 1. Describe the steps in determining inventory quantities. 4, 5, 6, 7, 8,

### Merchandise Inventory, Cost of Goods Sold, and Gross Profit. Pr. Zoubida SAMLAL

Merchandise Inventory, Cost of Goods Sold, and Gross Profit Pr. Zoubida SAMLAL 1 Accounting for Inventory Inventory (balance sheet) = Number of units of inventory on hand X Cost per unit of inventory Cost

### Accounting 303 Exam 3, Chapters 7-9

Accounting 303 Exam 3, Chapters 7-9 Spring 2012 Name Row I. Multiple Choice Questions. (2 points each, 30 points in total) Read each question carefully and indicate your answer by circling the letter preceding

### Module 3 - Inventory Definitions

Module 3 - Inventory Definitions Inventory goods held for resale COGS expenses incurred to purchase or manufacture the merchandise sold for a period Raw material Work-In-Process Finished Goods Inventory

### Accounting 303 Exam 3, Chapters 7-9 Fall 2011 Section Row

Accounting 303 Name Exam 3, Chapters 7-9 Fall 2011 Section Row I. Multiple Choice Questions. (2 points each, 34 points in total) Read each question carefully and indicate your answer by circling the letter

### With 11,000 employees serving 2 million customers weekly,

Chapter 13 MARK LENNHIAN/AP PHOTO PHOTO: CARY BENBOW LEARNING OBJECTIVES Careful study of this chapter should enable you to: LO1 Explain the impact of merchandise inventory on the financial statements.

### Investments Advance to subsidiary company 81,000

EXERCISE 7-3 (10 15 minutes) Current assets Accounts receivable Customers Accounts (of which accounts in the amount of \$40,000 have been pledged as security for a bank loan) \$79,000 Installment accounts

### Accounting 402 Illustration of a change in inventory method

Page 1 of 6 (revised fall, 2006) The was incorporated in January, 20X5. At the beginning of, the company decided to change to the FIFO method. Frank-Lex had used the LIFO method for financial and tax reporting

### 1. Analyze the following T-account in the ledger of Moxy Pool Supply Company

Name: Date: 1. Analyze the following T-account in the ledger of Moxy Pool Supply Company Mdse. Inventory 5,000 400 If \$5,000 in the Inventory account represents merchandise purchased from a supplier, we

### Valuation of inventories

Valuation of inventories The sale of inventory at a price greater than total cost is the primary source of income for manufacturing and retail businesses. Inventories are asset items held for sale in the

### Inventories: Cost Measurement and Flow Assumptions

CHAPTER Inventories: Cost Measurement and Flow Assumptions OBJECTIVES After careful study of this chapter, you will be able to: 1. Describe how inventory accounts are classified. 2. Explain the uses of

### CHAPTER 9 WHAT IS REPORTED AS INVENTORY? WHAT IS INVENTORY? COST OF GOODS SOLD AND INVENTORY

CHAPTER 9 COST OF GOODS AND INVENTORY 1 WHAT IS REPORTED AS INVENTORY? Inventory represents goods that are either manufactured or purchased for resale in the normal course of business Inventory is classified

Financial Accounting John J. Wild Sixth Edition McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 05 Reporting and Analyzing Inventories Conceptual Chapter

### CHAPTER 6. Inventories ASSIGNMENT CLASSIFICATION TABLE. B Problems. A Problems. Brief Exercises Do It! Exercises

CHAPTER 6 Inventories ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Do It! Exercises A Problems B Problems 1. Describe the steps in determining inventory quantities. 1, 2,

### Chapter 5. Accounting for merchandising operations. Appendix 5A: Periodic inventory system

1 Chapter 5 Accounting for merchandising operations Appendix 5A: Periodic inventory system 2 Learning objectives 1. Record purchase and sales transactions under the periodic inventory system 2. Prepare

### EXERCISES. Ex. 6 1. Ex. 6 2

EXERCISES Ex. 6 1 Switching to a perpetual inventory system will strengthen A4A Hardware s internal controls over inventory, since the store managers will be able to keep track of how much of each item

### Accounting 303 Exam 3, Chapters 7-9 Fall 2012 Section Row

Accounting 303 Name Exam 3, Chapters 7-9 Fall 2012 Section Row I. Multiple Choice Questions. (2 points each, 34 points in total) Read each question carefully and indicate your answer by circling the letter

### Ch6. Student: 2. Cost of goods sold is an asset reported in the balance sheet and inventory is an expense reported in the income statement.

Ch6 Student: 1. Inventory is usually reported as a long-term asset in the balance sheet. 2. Cost of goods sold is an asset reported in the balance sheet and inventory is an expense reported in the income

### CHAPTER 8. Valuation of Inventories: A Cost-Basis Approach 1, 2, 3, 4, 5, 6, 8, 9. 2. Perpetual vs. periodic. 2 9, 13, 14, 17

CHAPTER 8 Valuation of Inventories: A Cost-Basis Approach ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Inventory accounts; determining

### INVENTORY VALUATION THE SIGNIFICANCE OF INVENTORY

THE SIGNIFICANCE OF INVENTORY INVENTORY VALUATION In the balance sheet inventory is frequently the most significant current asset. In the income statement, inventory is vital in determining the results

### Accounting 303 Exam 3, Chapters 8-9 Spring 2011 Section Row

Accounting 303 Name Exam 3, Chapters 8-9 Spring 2011 Section Row I. Multiple Choice Questions. (2 points each, 34 points in total) Read each question carefully and indicate your answer by circling the

### Merchandising Operations

5 Merchandising Operations WHAT YOU PROBABLY ALREADY KNOW You want to order a pair of pants from a mail-order catalog. The price listed in the catalog is \$50. There is a 10% off coupon in the catalog for

### Chapter 8. Inventory Chapters. Learning Objectives. Learning Objectives. Inventory. Inventory. Valuation of Inventories: A Cost-Basis Approach

Chapter 8 Valuation of Inventories: A Cost-Basis Approach Chapters Topic of chapters 8 and 9 : Asset on balance sheet Cost of goods sold: Expense on I/S See Safeway, Dr. Pepper, Campbell, Grainger, Amazon,

### 1. \$45000 2. \$108000 3. \$63000 4. \$135000

For the last several years Monte Cristo Corp. has operated with a gross profit rate of 30%. On January 1 of the current year, the company had on hand inventory with a cost of \$150,000. Purchases of merchandise

### Accounting 303 Exam 3, Chapters 7-9 Fall 2013 Section Row

Accounting 303 Name Exam 3, Chapters 7-9 Fall 2013 Section Row I. Multiple Choice Questions. (2 points each, 28 points in total) Read each question carefully and indicate your answer by circling the letter

### Self-test Comprehensive Problems II 综 合 自 测 题 II

Self-test Comprehensive Problems II 综 合 自 测 题 II Part One (30%) 1. Give the Chinese/English of the following terms: (5%) subsidiary ledger 统 制 账 户 purchase requisition 现 金 溢 缺 petty cash fund 永 续 盘 存 制

### Merchandise Accounts. Chapter 7 - Unit 14

Merchandise Accounts Chapter 7 - Unit 14 Merchandising... Merchandising... There are many types of companies out there Merchandising... There are many types of companies out there Service company - sells

### Dutchess Community College ACC 104 Financial Accounting Chapter 6 Quiz Prep

Dutchess Community College ACC 104 Financial Accounting Chapter 6 Quiz Prep Reporting & Analyzing Peter Rivera March 2007 Revised March 26, 2007 Disclaimer This Quiz Prep is provided as an outline of the

### 2. The balance in a deferred revenue account represents an amount that is Earned Collected a. Yes Yes b. Yes No c. No Yes d. No No.

Multiple choice (36%, 2%each): 1. Failure to record the expired amount of prepaid rent expense would not a. understate expense. b. overstate net income. c. overstate owners' equity. d. understate liabilities.

### Financial Statement Preparation Webinar. Presented by Nick Chapman VEI Program Coordinator New York City

Financial Statement Preparation Webinar Presented by Nick Chapman VEI Program Coordinator New York City 122 Amsterdam Ave. New York, NY 10023 Phone: 212-769-2710 www.veinternational.org Objectives: Review

### Dutchess Community College ACC 104 Financial Accounting Quiz Prep Chapter 5

Dutchess Community College ACC 104 Financial Accounting Quiz Prep Chapter 5 Merchandising Operations Peter Rivera October 2009 Disclaimer This Quiz Prep is provided as an outline of the key concepts from

### In the event of a tie, the score on the last ten questions will be used as a tie-breaker.

NEW YORK STATE ASSOCIATION FUTURE BUSINESS LEADERS OF AMERICA SPRING DISTRICT MEETING ACCOUNTING II 2010 TEST DIRECTIONS 1. Complete the information requested on the answer sheet. PRINT your name on the

### Chapter 6. Inventories

1 Chapter 6 Inventories 2 Learning objectives 1. Define and identify the items included in inventory at the reporting date 2. Determine the s to be included in the value of inventory 3. Describe the four

### 4/10/2012. Inventories and Cost of Goods Sold. Learning Objectives (LO) Learning Objectives (LO) LO 1 Gross Profit and Cost of Goods Sold

Learning Objectives (LO) Inventories and Cost of Goods Sold CHAPTER 7 After studying this chapter, you should be able to 1. Link inventory valuation to gross profit 2. Use both perpetual and periodic inventory

### The Measurement of the Business Income. 1 by recording revenues when earned and expenses when incurred. 2 by adjusting accounts

Recap from Week 3 The Measurement of the Business Income The primary objective of accounting is measuring the net income of the businesses according to the generally accepted accounting principles. Net

### Financial Accounting Study Guide Fall 2013 CH1 & 2 PART VI RATIOS

Financial Accounting Study Guide Fall 2013 CH1 & 2 PART VI RATIOS Name: Selected information from the financial statements of Miller Company for the year ended December 31, 2012, appears below: 2012 Current

### Vol. 1, Chapter 3 - Accounting Adjustments

Vol. 1, Chapter 3 - Accounting Adjustments Problem 1 1. (\$20,000 2,000) 48 = \$375 per month 2. Jan. 31 Depreciation Expense \$375 Accumulated Depreciation Van \$375 To record depreciation expense for January

### Chapter 5 Merchandising Operations

Chapter 5 Merchandising Operations Financial Statements of a Service Company and a Merchandiser: - Service Companies: Revenues earned through performance of services. Examples: Dentists, Accounting Firms,

### Learning Goal 26. bal. 62,300 3,000

S1 Learning Goal 26 Multiple Choice 1. c Remember that any entry to the Accounts Receivable account also requires an entry to a subsidiary account. 2. b 3. d Only the direct write-off method debits an

### Accounts Receivable 7200 Sales 7200 (No entry )

INVENTORY. Inventory: It is defined as tangible personal property: 1. Held for sale in the ordinary course of business. 2. In the process of production for such sale. 3. To be used currently in the production

### CHAPTER 8 VALUATION OF INVENTORIES: A COST BASIS APPROACH. MULTIPLE CHOICE Conceptual

CHAPTER 8 VALUATION OF INVENTORIES: A COST BASIS APPROACH Answer No. Description MULTIPLE CHOICE Conceptual d 1. Entries under perpetual inventory system. b 2. Classification of goods in transit. a 3.

### Inventories: Measurement

RECORDING AND MEASURING INVENTORY TYPES OF INVENTORY There are two types of inventories depending on the kind of business operation. Merchandise Inventory A merchandising concern buys and resells inventory

### ADVANCED ACCOUNTING (02) REGIONAL 2006

13 Pages Contestant Number Time Rank ADVANCED ACCOUNTING (02) REGIONAL 2006 Objective Questions (30 @ 2 points each) Job 1 Income Statement Job 2 Statement of Retained Earnings Job 3 Balance Sheet (60

### For more course tutorials visit www.uoptutorial.com

ACC 290 Final Exam Guide (New) Click Here to Buy the Tutorial http://www.uoptutorial.com/index.php?route=product/ product&path=737&product_id=11101 For more course tutorials visit www.uoptutorial.com ACC

### Jackson Company recorded the following cash transactions for the year:

ACC 290 Final Exam Guide (New) Click Here to Buy the Tutorial http://www.uoptutorial.com/index.php?route=product/product&path=7 37&product_id=11101 For more course tutorials visit www.uoptutorial.com ACC

### CHAPTER 6 INVENTORIES SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM S TAXONOMY. True-False Statements. Multiple Choice Questions

CHAPTER 6 INVENTORIES SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM S TAXONOMY Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT True-False Statements 1. 1 C 8. 2 C 15. 3 K 2. 1 C 9. 2 C 16.

### Accounting Lesson to Prepare for UIL Accounting Contest

Accounting Lesson to Prepare for UIL Accounting Contest Lesson Plan Title: The Accounting Equation for the Corporation Goal of Lesson: To analyze the components of the accounting equation from the beginning

### Merchandise Inventory

6 Merchandise Inventory WHAT YOU PROBABLY ALREADY KNOW Assume that you want to invest in the stock market. You purchase 100 shares of a stock mutual fund in January at \$24/share, another 100 shares in

EXERCISES Ex. 3 1 1. Prepaid expense 2. Accrued revenue 3. Unearned revenue 4. Accrued expense 5. Unearned revenue 6. Prepaid expense 7. Accrued expense 8. Accrued expense Ex. 3 2 Account Accounts Receivable...

### Page 1 of 6 Ehab Abdou (97672930)

Inventory Issues: 1- Recording inventory There are two systems (methods) used in recording Inventory Perpetual Inventory system نظام الجرد المستمر 1- Beginning Inventory 100 Units at \$6 per unit No Entry

### CHAPTER 5 ACCOUNTING FOR MERCHANDISING BUSINESSES

1. Merchandising businesses acquire merchandise for resale to customers. It is the selling of merchandise, instead of a service, that makes the activities of a merchandising business different from the

### Accounting 300A 23-A Inventory Valuation Methods Page 1 of 13

Accounting 300A 23-A Inventory Valuation Methods Page 1 of 13 I. Review of Key Concepts and Terms: INVENTORIES: ALTERNATIVES FOR INVENTORY VALUATION A. Inventory is defined by ARB-43 as items of tangible

### Accounting II Second Semester Final

Name: Class: Date: Accounting II Second Semester Final Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Profit is the difference between:

### Inventory - A current asset whose ending balance should report the cost of a merchandiser's products waiting to be sold.

Accounting Fundamentals Lesson 6 6.0 Inventory & Cost of Sales Inventory - A current asset whose ending balance should report the cost of a merchandiser's products waiting to be sold. The inventory of

### Chapter 5 In-Class Exercise Merchandising

Chapter 5 In-Class Exercise Merchandising 1. The following events pertain to Downtown Toy Shop for October 2016. The company uses the perpetual inventory method. Record the following transactions in general

### Class Demonstration Problems on Inventory Errors:

Class Demonstration Problems on Inventory Errors: 1. Bekins Inc. began operations on January 1, 1995. The following data pertains to the company s first two years in business: Reported Amount Correct Amount

### Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information.

0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting

### Gold Run Snowmobile. Adjusting Entries and Closing Entries For The Quarter Ended December 31. Final Project Evaluation. 5 th Edition.

Gold Run Snowmobile 5 th Edition Adjusting Entries and Closing Entries For The Quarter Ended December 31 and the Final Project Evaluation Page 1 ADJUSTING ENTRIES FOR THE QUARTER Using a copy of the December

### Chapter 2: Debits and Credits. 2012 Educating Bookkeepers for Business, Inc.

Chapter 2: Debits and Credits Think through and record transactions (write sentences) using T-accounts and journal entries. Debits and Credits Every transaction (sentence in the story of what happened

### Lesson 5: Inventory. 5.1 Introduction. 5.2 Manufacturer or Retailer?

Lesson 5: Inventory 5.1 Introduction Whether it is a brick and mortar or digital store, for many businesses, inventory management is a key cog of their operations. Managing inventory is an important key

### Exercises - Chapter 9

Exercises - Chapter 9 Complete the following exercises. Assume that all these exercises use the perpetual inventory system. Exercise #1 1. hip top Shirt retailers bought \$15,000 worth of shirts from Super

### ANSWERS TO QUESTIONS FOR GROUP LEARNING

Accounting for a 5 Merchandising Business ANSWERS TO QUESTIONS FOR GROUP LEARNING Q5-1 A merchandising business has a major revenue reduction called cost of goods sold. The computation of cost of goods

### * * * Chapter 15 Accounting & Financial Statements. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall

Chapter 15 Accounting & Financial Statements Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Bookkeeping vs. Accounting Bookkeeping Accounting The recording of business transactions.

### Learning Module 3 Journal Entries

Learning Module 3 Journal Entries The Accounting Equation Balance Sheet Income Statement = + + - Assets Liabilities Owners' Equity Revenue Expenses Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Recording journal

### MIDTERM EXAMINATION. Afaaq_tariq@yahoo.com. Fall 2009

MIDTERM EXAMINATION Afaaq_tariq@yahoo.com Fall 2009 FIN621- Financial Statement Analysis Asslam O Alikum FIN621- Financial Statement Analysis (Session 3) solved by Afaaq n Shani Bhai with reference n numerical

### CHAPTER 5 ACCOUNTING FOR MERCHANDISING OPERATIONS

CHAPTER 5 ACCOUNTING FOR MERCHANDISING OPERATIONS LEARNING OBJECTIVES 1. IDENTIFY THE DIFFERENCES BETWEEN SERVICE AND MERCHANDISING COMPANIES. 2. EXPLAIN THE RECORDING OF PURCHASES UNDER A PERPETUAL INVENTORY

### CHAPTER 22. Accounting Changes and Error Analysis 4, 6, 7, 8, 9, 12, 13, 15

CHAPTER 22 Accounting Changes and Error Analysis ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Differences between change in principle, change in estimate, change in entity, errors. Questions 4,

### WHAT ARE INVENTORY SYSTEMS?

WHAT ARE INVENTORY SYSTEMS? CHRISTINE NYANDAT, 25 Oct, 2013 Definition: An inventory control system is a set of hardware and software based tools that automate the process of tracking inventory. The kinds

### Chapter 6. Learning Objectives. Account for inventory by the FIFO, LIFO and average cost methods. Objective 1. Retail Inventory

PowerPoint to accompany Chapter 6 Retail Inventory Learning Objectives 1. Account for inventory by the FIFO, LIFO and average cost methods. 2. Compare the effects of FIFO, LIFO and average cost. 3. Apply

### Accounting for Changes and Errors

CHAPTER Accounting for Changes and Errors OBJECTIVES After careful study of this chapter, you will be able to: 1. Identify the types of accounting changes. 2. Explain the methods of disclosing an accounting

### PROBLEMS: SET C P6-1C Giles Manufacturing uses a periodic inventory system and has the following transactions for the month of June 2012:

Calculate ending inventory cost of goods sold for four inventory methods (LO 3) PROBLEMS: SET C P6-1C Giles Manufacturing uses a periodic inventory system and has the following transactions for the month

### CHAPTER 6 ACQUISITIONS AND PAYMENT: INVENTORY AND LIABILITIES

CHAPTER 6 ACQUISITIONS AND PAYMENT: INVENTORY AND LIABILITIES Acquiring Merchandise for Sale Purchases (pp. 214-16) Purchase Discounts When a company takes advantage of a purchase discount, it reduces

### The Statement of Cash Flows Direct Method

23 The Statement of Cash Flows Direct Method DEMONSTRATION PROBLEM The financial statements of Bolero Corporation follow. Copyright Houghton Mifflin Company. All rights reserved. 1 Bolero Corporation Income

### ACCOUNTING 105 CONCEPTS REVIEW

ACCOUNTING 105 CONCEPTS REVIEW A note from the tutors: This handout is designed to help you review important information as you study for your cumulative final exam. While it does cover many important

### Dr. M.D. Chase Accounting Principles Examination 2J Page 1

Accounting Principles Examination 2J Page 1 Code 1 1. The term "net sales" refers to gross sales revenue reduced by sales discounts and transportation-in. 2. The cost of goods available for sale in a given

### Ending inventory: Ending Inventory = Goods available for sale Cost of goods sold Ending Inventory = \$16,392 - \$13,379 Ending Inventory = \$3,013

BE7 1 CHAPTER 7 MERCHANDISE INVENTORY BRIEF EXERCISES The inventory purchases made by Hewlett-Packard during 2008 can be calculated as follows: Beginning inventory \$ 8.0 billion + Purchases X Cost of Goods

### Chapter 5 Accounting for Merchandising Operations

Chapter 5 Accounting for Merchandising Operations Purchase Transactions Purchaser records goods at cost. When goods are returned, purchaser reduces Inventory. On September 5, De La Hoya Company buys merchandise

### T16-1 REVIEW EXERCISES CHAPTER 16 SECTION I

T16-1 REVIEW EXERCISES CHAPTER 16 SECTION I 1. Calculate the total number of units available for sale and the cost of goods available for sale from the following inventory of oil filters for Action Auto

### Score: Pass/Fail. Purchase Returns and Allowances. Sales Returns and Allowances. Journal entries The accounting equation Treasury Stock

Walsh College Fundamental Financial Accounting Student Name: Practice Evaluation Exam Phone/Email: Date: This evaluation exam will be used to determine your knowledge of Financial Accounting and to assist

### ACC 211/212: Double Entry Logs

ACC 211/212: Double Entry Logs Journal Entries: o Credits are always indented (account name and value). o The sum of debits will always equal the sum of credits. o The month name is required only for the

### Section A Fundamentals of Accountancy,Chapter 4 CA (Dr.) Akash Gupta FCA, M.COM, PHD

Section A Fundamentals of Accountancy,Chapter 4 CA (Dr.) Akash Gupta FCA, M.COM, PHD Meaning of Inventory Types of Inventories Inventory valuation Basis of Inventory Valuation Valuation Inventory Techniques

### CHAPTER 9. Inventories: Additional Valuation Issues. 3. Purchase commitments. 9 5, 6 9, 10 9

CHAPTER 9 Inventories: Additional Valuation Issues ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Lower of cost or market. 1, 2,

### Inventory and Cost of Goods Sold

9 Inventory and Cost of Goods Sold Overview Chapter 9 is quite long and covers a number of issues involving both inventory and cost of goods sold. Hopefully, you learned something about inventory methods

### Principles of Financial Accounting ACC-101-TE. TECEP Test Description

Principles of Financial Accounting ACC-101-TE TECEP Test Description This TECEP is an introduction to the field of financial accounting. It covers the accounting cycle, merchandising concerns, and financial

### Multiple-Choice Questions

True-False 1 Periodic inventory systems provide a greater degree of management control over inventory. 2 In the perpetual inventory system inventory losses must be recoded in the accounts. 3 In a periodic

### ADVANCED ACCOUNTING (02) KEY. Regional 2012. Multiple Choice (15 @ 2 points each) Short Answer (10 @ 6 points each)

ADVANCED ACCOUNTING (02) KEY Regional 2012 Multiple Choice (15 @ 2 points each) Short Answer (10 @ 6 points each) (30 pts.) (60 pts.) Production Problem 1: Check Register Problem 2: Inventory Valuation