chapter 9 hw

chapter 9 hw - Bonner's Husquvarna Specialty LawnCare...

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12/31/2006 allowance to reduce inventory to market 12000 loss recovery 12000 to adjust allowance account to a zero balance LCM is applied on the basis of total inventory You requested the supporting documentation for this entry. You received: 12/31/2006 balance in the allowance account before adjustment 12,000 credit item qty cost total cost market nrv nrv - pm weed eaters 125 60 7500 65 90 65 65 8125 chain saws 250 75 18750 80 200 80 80 20000 snowblowers 320 90 28800 125 180 90 125 40000 55050 68125 LCM total basis therefore we need no allowance You are suspicious because Bonner's had a marginal year during 2006. Net income for the year was $8,500. You discover that prior to 2006, LCM had been completed on an item by item basis. After a little investigation you complete the following chart: item qty cost total cost market nrv nrv - pm weed eaters 125 60 7500 50 90 55 55 6875 chain saws 250 75 18750 70 100 65 65 16250 snowblowers 320 90 28800 70 110 55 55 17600 55050 40725 required: What correcting entry do you need to make? What is the corrected net income assuming the tax rate was 15%? What journal entry do you need to mak Sep-07 retained earnings 14325 allowance to reduce inv to LCM
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This note was uploaded on 06/09/2008 for the course FIN 308 taught by Professor Spivey during the Spring '08 term at Clemson.

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chapter 9 hw - Bonner's Husquvarna Specialty LawnCare...

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