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Purchases, Inventory and Cost of Goods Sold (COGS)

Computer-Assisted Substantive Tests for Inventory

An auditor is conducting an audit of the financial statements of a wholesale cosmetics distributor with an inventory consisting of thousands of individual items. The distributor keeps its inventory in its own distribution center and two public warehouses. An inventory computer file is maintained on a computer disk and at the end

Cost of debt using the approximation formula

For each of the $1000 par-value bonds in the attached file, assuming annual interest payment and a 40% taxe rate, calculate the after-tax cost to maturity using the approximation formula.

Ming Company's chart of accounts includes the following selected accounts.

This file contains a formatted MS Excel file containing various transactions to the chart of accounts for the Ming Company. Ming Company's chart of accounts includes the following selected accounts. 101 Cash 201 Accounts Payable 120 Merchandise Inventory 306 T. Ming, Drawing 130 Prepaid Insurance 505 Cos

The equation transfer price = variable cost + opportunity cost is

Here is the final half: ............................ 16 The equation transfer price = variable cost + opportunity cost is: a. A formula for market based transfer prices b. A formula for all types of transfer prices c. A formula that is used in all manufacturing firms in the U.S. d. None of the above

Cost classification and cost formula

Chillicothe Meat Company produces one of the best sausage products in southern Ohio. The company's controller used the account-classification method to compile the following information. a. Depreciation schedules revealed that monthly depreciation on buildings and equipment is $19,000. b. Inspection of several invoices from

Accounting - Perpetual Inventory

The following events pertain to XYC for Jan 2007. The company uses the perpetual inventory method. Record the following events in the general journal. 1.) Jan 3rd purchased 40,000 of merchandise inventory from supplier, Kelly Distributors Inc. The terms of the purchase: 2/10, n/30 and FOB shipping point. 2.) Jan 5th paid 90

Advanced Accounting

1. On 1/1/02, Platte acquired 80% of River Co. The purchase resulted in a differential of $120,000, half of which was assigned to a patent and the other half assigned to inventory. The patent is being amortized over a 5 year period. The inventory was sold during 2002 to an unrelated party. During 2002, River sold to Platte in

Understanding the elements of the cost equation

In describing the cost equation, Y = a + bX, "a" is the dependent variable, cost. the independent variable, the level of activity. the total fixed costs. the variable cost per unit of activity.

Financial Accounting Multiple Choice Questions

13. A recommended internal control procedure for taking physical inventories is that the accounting should be done by employees who do not have custodial responsibility for the inventory. This is an example of what type of internal control procedure? a. Establishment of responsibility b. Documentation procedure c. Indep

Calculations Using the High-Low Method

1. High-Low Method; Scattergraph Analysis (LO2, LO3) Zerbel Company, a wholesaler of large, custom-built air conditioning units for Commercial buildings, has noticed considerable fluctuation in its shipping expense from month to month, as shown below: Month Units

EOQ, ROP, Average Inventory, Annual Ordering Cost

Problem 6-20 Note: Please review the PowerPoint Slides using the link below:,11119,2557279-,00.html Barbara Bright is the purchasing agent for West Valve Company. West Valve sells industrial valves and fluid control devices. One of the most popular valves is the Western, which ha

Inventory models: Newsboy problem

Supermarket A dairy product is ordered daily at a particular supermarket. The product, which costs $1.19 per unit, sells for $1.65 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with a mean of 150 a

Accounting Questions (Inventory, AP, Journals)

1) In a Periodic inventory system, would purchase returns and allowances and purchase discounts be considered contra liability accounts. 2) The accounts payable subsidiary ledger controls the accounts payable account in the general ledger. (True or False) 3) If using a perpetual inventory system, what entry to record the p

Lone Star Leather Company - COGS, Costs

Selected data concerning the past year's operations of the Lone Star Leather Company are as follows: Inventories Beginning Ending Raw Material 142,000 162,000 Work in Process 160,000 60,000 Finished Goods 180,000 220,000 Other Data: Direct Materi

Managerial Accounting

E1 The decisions that follow were made by the management of Shanahan Shoe Company. Indicate whether each decision pertains primarily to (a) cash flow management, (b) profitability management, (c) choice of inventory system, or (d) control of merchandise operations. 1. Decided to mark each item of inventory with a magnet tag tha

Retail inventory system

A retail inventory system: a. provides the internal control of a periodic inventory system. b. cannot be used if inventory purchases are made at different costs during the period. c. records inventory purchases by debiting Inventory for the cost of the merchandise and crediting Accounts Payable for the selling

High-low method, level of costs.

The owner/operator of Toledo Taxi Company is interested in determining the cost equation for his one-vehicle taxi service, based on the number of miles driven. To that end he has collected the following volume and cost data. Total Number of Month Operating Costs Miles Driven July $16,000 13,000 August 17,800

Periodic Inventory System

The following items relating to the Mets Co's periodic inventory system, if incorrect, have not been corrected as of 12/31/05: a Goods purchased FOB DESTINATION, with cost of $250,000, are in transit at 12/31/05. A purchase was recorded. These goods were not included in the 12/31/05 inventory count. b Goods sold FOB SHI

Cost accounting

Use the information below to answer questions 22 - 23. Troy Company processes 15,000 litres of direct materials to produce two products, Product X and Product Y. Product X sells for $4 per litre, and Product Y, the main product, sells for $50 per litre. The following information is for August: Beginning

Budgeting: Operating Expenses, Cost of Goods and Net Income

Use the following to answer questions 47-20. Harlow Promotions, Inc. sells T-shirts for concerts. The company has developed the following budget for the coming year based on a sales forecast of 80,000 T-shirts: Sales $1,600,000 Cost of Goods Sold


1. What is the significance of accounting for inventories? What "difference does it make" if the amounts reported are accurate or not?

Inventories valuation

Complete Questions 9-8, 9-9, 9-16 and 9-5A. All work must be shown and the answers must be aligned and formatted as indicated in the questions.