Explore BrainMass


Inventory method

Your office is on the 68th floor of your building. The CEOâ??s office is on the 77th floor. The two of you are waiting for an elevator one morning. The CEO states â??Our prices are rising and I want the lowest net income for tax purposes and the highest ending inventory for external reporting purposes. Which inventory method s

Headstrong Hardware: Estimate the amount of Inventory lost in the fire

Please explain the equation and steps to find the number. Headstrong Hardware lost most of its inventory in an electrical fire that destroyed the company's warehouse and retail store. Fortunately, the accounting records were backed up on the owner's computer in her home office and could, therefore, be recovered. However, Head

Income statements, expenses during year, inventory & merchandise.

A. The income statement for the Racal Soliston Corporation shows prepaid rent of $12,000 at the beginning of the year and $5,000 at the end of the year. If rent expense for the year was $28,000, how much cash was paid out for rent during the year? b. Assume that the cost of goods sold for Royal Scam Company for 2007 wa

One company having stock in another, Earnings, Dividends paid

Please read thoroughly. 13. Kramer Company has a substantial investment in Benz Company. Kramer Company accounts for this investment using the equity method. Kramer Company owns 60% of the Benz Company's stock, which was purchased for $150,000 in January of 2004. Given the following information for the Benz Company, what

Troy Company Monthly Budgets: Inventory, Purchases, Ratios

How do I calculate the budget ending inventory for each month? How do I calculate the ratio of ending inventory? Troy Company prepares monthly budgets. The current budget plans for a September ending inventory of 38,000 units. Company policy is to end each month with merchandise inventory equal to a specified percent of budge

Write down of high-technology company's inventory: Disclosure, SEC interest?

Many high-technology companies, like Nortel Networks, Micron Technology and JDS Uniphase, have written down massive amounts of their inventory. For example, Nortel Networks revalued some of its inventory parts at $0, though the inventory initially cost Nortel $650 million. Companies are required to report whether they write

Inventory measurements for Capstone Company

Capstone Company uses a periodic inventory system. The company's ending inventory on December 31, 2009, its fiscal-year end, based on a physical count, was determined to be $911,007. Capstone's unadjusted trial balance also showed the following account balances: Purchases, $1,732,590; Accounts payable, $586,845; Accounts receiva

How many units to produce

Delsing Plumbing Company has a beginning inventory of 14,000 units, will sell 50,000 units for the month, and desires to reduce ending inventory to 40% of beginning inventory. How many units should Delsing produce?

Ending balance of account

123 Company has year end inventory of $526k on the books. The Company has consigned goods at a nearby warehouse costing $56k, and not on books. $24,575 in inventory was damaged in flood last month. What is ending balance of account?

Inventory Turnover Ratio / Sales Level

1. Bowa Construction's days sales outstanding is 50 days (on a 365-day basis). The company's accounts receivable equal $100 million and its balance sheet shows inventory equal to $125 million. What is the company's inventory turnover ratio? 2. Last year Murphy Transportation had $5 million of sales, and it had $1.7 milli

Perpetual method of tracking inventory

I need help answering the following discussion question: What is the perpetual method of tracking inventory? How is it different from the periodic method? Why would a company choose one method over the other? Which is the best method? Why?

Decision Case: Gap Inc.'s Inventory Note

Decision Case: Read and interpret Gap Inc.'s inventory note The 2008 annual report for Gap Inc. includes the following information in the note that summarizes the accounting policies. Merchandise Inventory Effective January 29, 2006 (the beginning of fiscal 2006) we changed our inventory flow assumption from the first

Periodic inventory system

INVENTORY types of inventory valuation. Elston Company had a beginning inventory of 200 units at a cost of $12 per unit on August 1. During the month, the following purchases and sales were made. Purchases Sales August 4 250 units at $13 August 7 150 units August 15 350 units at $15 August 11 100 units August 28 200

Inventory Issues: Intermediate Accounting

422. During periods of inflation this cost flow assumption will generally mean less reported profits and less taxable income. FIFO LIFO 423. The cost flow assumption that results in the recent costs being reported on the balance sheet is FIFO LIFO 424. The cost flow assumption where costs are expensed in the r

Inventory Accounts for Unsold Goods

Generally, the amount reported in the Inventory account will be the _________ of the unsold goods owned by the company. cost retail value Under the periodic system for inventory, the buyer will record the purchase of merchandise with a debit to this account. Inventory Purchases Sales Under the perpe

LIFO, FIFO, Average cost; Perioidic and Perpetual Methods

January 1, beginning inventory 45 units at $10 = $450 February 28 purchase 50 units at $11 = $550 June 15 purchase 50 units at $12 = $600 October 1 purchase 50 units at $12 = $600 December 29 purchase 50 units at $13 = $650 December 31, ending inventory 65 units at ?? Sales for entire year $2,680 consisting of 180 units

Intermediate Accounting 2 - Lifo, Fifo, And perpetual system

Ferris company began 2009 with 6000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January 2009 are as follows: Date of Purchase Units Unit Cost Total Cost 10-Jan 5000 $9 45000 18-Jan 6000 10 60000 11000 $19 105000 *includes purc

Financial Accounting (LIFO, FIFO)

Snoslope sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Snoslope's purchases of Xpert snowboards during September. During the same month, 118 Xpert snowboards were sold. Snoslope uses a periodic inventory system. Date Explanation Units Unit Cost Total Cost Sept. 1 In

Financial Accounting (LIFO, FIFO, Average Cost)

You have the following information for McHugh Inc. for the month ended October 31, 2010. McHugh uses a periodic method for inventory. Unit Cost or Date Description Units Selling Price Oct. 1 Beginning inventory 60 $25 Oct. 9 Purchase 120 26 Oct. 11 Sale 100 35 Oct. 17 Purchase 90 27 Oct. 22 Sale 60 40 Oct. 2

Asset sale/inventory profits

Need help answering these questions! 1. A subsidiary sold a depreciable asset to the parent company at a profit in the current period. Will the income assigned to the noncontrolling interest in the consolidated income statement for the current period be more than, less than, or equal to a proportionate share of the reporte

Inventory Cost using Variable & Absorption Costing

The following production data came from the records of LeShaq Athletic Enterprises for the year ended December 31, 2011 matierals 480000 labor 260000 variable factory overhead 44000 fixed factory overhead 36800 During the year 40,000 units where manufactured but only 35,000 units w

Cost of Ending Inventory: Example Problem

A company made the following merchandise purchases and sales during the month of May: May 1 purchase 380 units at $15 each May 5 purchase 270 units at $17 each May 10 sold 400 units at $50 each May 20 purchase 300 units at $22 each May 25 sold 400 units at $50 each There was no beginning inventory. If the com

Receivable Transactions and Differences in Inventory

What are two methods of recording accounts receivable transactions when a cash discount situation is involved? Which is more theoretically correct? Which is used in practice more of the time? Why? What is the difference between a perpetual inventory and a physical inventory? If a company maintains a perpetual inventory,

Wolf Company adopted the dollar-value LIFO method on January 1, 2007...

Can you help me get started on this assignment? A. Wolf Company adopted the dollar-value LIFO method on January 1, 2007, at which time its inventory consisted of 6,000 units of Item A @ $5.00 each and 3,000 units of Item B @ $16.00 each. The inventory at December 31, 2007 consisted of 12,000 units of Item A and 7,000 units of

Harsco: FIFO and LIFO inventory valuations; change in net income

Part of the inventory footnote, taken from Harsco Corp.'s 2006 financial statements, is available below: Other information: Inventories valued on the LIFO basis at December 31, 2006 and 2005 were approximately $36.5 million and $41.8 million, respectively, less than the amounts of such inventories valued at current costs.