Chapter 6 homework

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

This preview shows pages 1–2. Sign up to view the full content.

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.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 04/29/2008 for the course ACCT 151 taught by Professor Largay during the Spring '07 term at Lehigh University .

### Page1 / 2

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online