Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change. a. Average receivables go up b. Credit payment time for customers are increased c. Inventory turnover goes from 3 times to 7 times d. Payables turno
The following information was available from the inventory records of Neer Company for January: Units Unit Cost Total cost Balance at January 1 3,000 $9.77 $29,310 Purchases January 6 2,000 $10.30 $20,600 January 26 2,700 $10.71 $28,917 Sales January 7 .(2,500) Janua
Using the lower of cost or market approach applied on an individual item basis, compute the inventory valuation that should be reported for each product on December 31, 2007. The accounting book is Intermediate Accounting by Weygandt and Kiesko, it is the newest edition. See attached file for full problem description.
Fisk Corporation is trying to improve its inventory control system and has installed an on-line computer at its retail stores. Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $12.0 per unit. What is the economic ordering quantity? How many orders will be placed durin
Earl Co. was formed on January 2, 2004, to sell a single product. Over a two-year period, Earl's acquisition costs have increased steadily. Physical quantities held in inventory were equal to three months' sales at December 31, 2004, and zero at December 31, 2005. Assuming the periodic inventory system, the inventory cost metho
During periods of rising prices, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory cost flow methods? FIFO LIFO a. Yes No b. Yes Yes c. No Yes d. No No
The following information was derived from the 2004 accounting records of Kelly: Kelly's Goods Kelly's Central Warehouse Held by Consignees Beginning inventory $260,000 $ 28,000 Purchases 950,000 140,000 Freight-in 20,000 Transportation to consignees 10,000 Freight-out 60,000 16,000 Ending inventory 290,000
Amos Corp. began operations on Dec 1, 2006. the only inventory transaction in 2006 was the purchase of inventory on Dec 10, 2006, at cost of $20 per unit. None of this inventory was sold in 2006. Relevant information is as follows. Ending inventory units Dec 31, 2006 100 Dec 31,
(All sales and purchases are on credit.) Indicate in each of the spaces provided the effect of the described errors on the various elements of a company's financial statements. Use the following codes: O = amount is overstated; U = amount is understated; NE = no effect. Assume a periodic inventory system. Accounts Acco
Inventory Control Models 1. Rascal's Inc. stocks beef jerky, an item that has a normally distributed demand during the reorder period with a mean of 7 dozen boxes and a standard deviation of three dozen boxes. If it is desirable to experience a stockout only 10 percent of the time, what is the appropriate safety stock? 2
Selected year-end data for the ABC Company are presented below: Current liabilities $600,000 Acid-test ratio 2.5 to 1 Current ratio 3.0 to 1 Cost of goods sold $500,000 The company has no prepaid expenses and inventories remained unchanged during the year. Based on these data, the company's inventory turnove
Following are budgeted data Jan Feb March sales in units 15000 20000 18000 production units 18000 19000 16000 One pound of material is required for eac
The following information has been given for two clothing stores. Plaids & Stripes and Audrey's Apparel expect that August and September will be the busiest months for their children's clothing departments. 1. Using the information given, which store generated the most total profit from inventory sales? 2. Calculate the ret
Why is inventory necessary? What risk is incurred with inventory? Why is it important to turn the inventory as soon as possible? How could a company improve its inventory turns?
BE9-2 Robin Corporation has the following four items in its inventory: Item Cost Replacement Cost Net Realizable Value NRV less Norm Profit Margin Jokers 2,000 1,900 2,100
29. Juanita Corporation uses a Job-Order cost system and applies overhead on the basis of direct labor cost. At the end of October, Juanita had one job still in process. The job cost sheet for this job contained the following information: Direct Material $480 Direct Labor $150 Manufacturing Overhead $600 An addit
See attached file for full problem description. Building Supplies Pte Ltd is a supplier of cements to the building and construction industry. The following transactions were recorded for the month of Aug 2006. a) Calculate the ending inventory and the gross profit for the month of August under each of the three inventory c
On March 31, the Maple Shop had no alarm clocks on hand. During the next four months it first purchased 50 clocks for $13 each, and then 75 more for $12 each. During these four months, 100 alarm clocks were sold. What will the July 31 alarm clock inventory amount and the four months' cost of goods be if the Maple Shop uses
On March 31st, the Maple Shop had no alarm clocks on hand. During the next four months, it first purchased 50 clocks for $14 each, and then 75 more for $12 each. During these four months, 100 alarm clocks were sold. What will the July 31 alarm clock inventory amount and the four months' cost of goods be if the Maple Shop us
1) In ____ the inventory and cost of goods sold accounts are kept up to date throughout the accounting period . A) perpetual inventory system (B) periodic inventory system (C) manufacturing inventory system (D) physical inventory sheet 2) A company that sells a low volume of high cost merchandise is more likely to use a ___
Sherpers sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Sherpers's purchases of Xpert snowboards during September. During the same month, 124 Xpert snowboards were sold. Sherpers uses a periodic inventory system. Date Explanation Units Unit Cost
A retail company begins operations late in 2000 by purchasing $600,000 of merchandise. There are no sales in 2000. During 2001 additional merchandise of $3,000,000 is purchased. Operating expenses (excluding management bonuses) are $400,000, and sales are $6,000,000. The management compensation agreement provides for incentive b
What types of companies use periodic inventory? What types of companies use perpetual inventory? What are the similarities and differences between periodic and perpetual inventory systems? How does each method impact the inventory and cost of sales calculations?
3. The company is considering the previous policy on inventory. Management estimates the carrying cost of inventory to be $65.00 per unit. However, the sales department is complaining that the company is losing money by having inadequate inventory levels. They have provided you with the following information. Safety stock
See attached file for full problem description. Compute the following for 2004, without considering the LIFO reserve Liquidity 1. Days' sales in invetory 2. Merchandise inventory turnover 3. inventory turnover in days 4. operating cycle 5. working capital 6. current ratio 7. acid test ratio 8. cash ratio Debt 1.
Please calculate the following ratios for the financial statements attached Debt to Equity Debt to total assets interest coverage receivable turnover inventory turnover total asset turnover net profit margin return on investment return on equity
A auto company has been ordering parts of its production process in lots of 10,000 units. Each order ciss the firm $50 to place. Holding cost per unit is $3. the auto company uses 200,000 units every 250 days. A. Calculate the EOQ B. What is the difference in inventory costs between the EOQ and the current order company
Do you think it is necessary to have as many different valuation and flow assumptions as we have? Why or why not?
The A&M Hobby Shop carries a line of radio controlled model racing cars. Demand for the cars is assumed to be constant at rate of 40 cars per month. The cars cost $60 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%. a. Determine the economic order
The Integrated Products Corporation (IPC) is developing ordering policies for materials that it stocks for resale to its customers. One of the items is a TS500 component. a. IPC purchases the TS500 for $24.95 per unit. The forecast of the customer demand for this component is 10,000 units annually. IPC estimates that each