Chapter 6 homework

Chapter 6 homework - Accounting 151 Section 16 Patrick...

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Accounting 151 Section 16 Patrick Leblond 10/05/06 Chapter 6 Problems E10: a) Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory = 13,568/ ((1,999 + 1,366)/2) = 8.06 Times Days in Inventory = 365/Inventory Turnover Ratio = 365/8.06 = 45.26 days b) Current ratio = current assets/current liabilities = 21,844 / 7,889 = 2.77: 1 Current ratio adjusting for LIFO reserve = (21,844 + 1,002) / 7889 = 2.90: 1 c) Ignoring the LIFO reserve would cause the current ratio to be understated, resulting in Deere looking less attractive to the potential investor. E13: 2008 2007 Beginning Inventory $26,000 $20,000 Cost of Goods Purchased 175,000 164,000 Cost of Goods Available for Sale 201,000 184,000 Ending Inventory 39,000 26,000 Cost of Goods Sold $162,000 $ 158,000 P1A: a) The item should not have been included in ending inventory. The seller is now the owner of the goods and Shilling should record this transaction as a debit to accounts receivable and a credit to sales. b) The item should have been included in ending inventory at a value of $350.
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Chapter 6 homework - Accounting 151 Section 16 Patrick...

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