Chapter 05 Homework 2 - Long-term assets 14,000 Total...

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Professor Smith ACCT151 2 October 2008 Chapter 5 Homework 2 E18,P2,P4,P6,D7 E18) Beginning Inventory 180,400 + Purchases +1,260,800 -Cost Of Goods Sold -1,200,000 Ending Inventory 241,200 P2) Wal Mart Target 2006: 0.234208 2006: 0.308908 2005: 0.230772 2005: 0.318777 Target appears to be doing better, having higher gross profits in both years. Wal Mart may have higher sales but they also have higher costs because of the large enterprises it takes to run such a large corporation. P4) Budget Stores Income Statement For year ended December 31, 2007 Revenues $15,000 Cost of goods sold 9,400 Gross Profit $ 5,600 Operating expenses 2,000 ` Net Income $ 3,600 Budget Stores Balance Sheet At December 31, 2007 Cash 1,500 Liabilities 7,000 Inventory 4,100 Capital Stock 5,000 Other current assets 2,000 Retained Earnings
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Unformatted text preview: Long-term assets 14,000 Total Liabilities Total Assets 21,600 and Equity 21,600 Budget Stores Income Statement For year ended December 31, 2008 Revenues $20,600 Cost of goods sold 3,600 Gross Profit $ 7,000 Operating expenses 3,000 ` Net Income $ 3,400 No change in 2008 Balance Sheet P6) Apple HP 2006: 0.289827 2006: 0.397238 2005: 0.290144 2005: 0.393859 63.06667 7.554249 Apple seems to be doing better than HP because they are turning over their inventory much much faster than HP. Other things to look at are industry standards, prior performance, balance sheet, income statement. D7) 1. Georgetown Company must the periodical method. 2. 700 units 3. I suggest LIFO because we are in an inflationary market...
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