XYZ has the following balances as of 12/31/02:
Cash
10,000
Accounts receivable, net of $2,500
allowance for doubtful accounts
45,000
Inventory
70,000
Marketable securities, at fair value, cost of
$11,500
11,500
Fixed assets
500,000
Accumulated depreciation
(200,000)
Accounts payable
30,000
Debt
200,000
Retained earnings
106,500
Common stock
100,000
The following applies to the month ended January 31, 2003 (XYZ uses perpetual
inventory accounting):
1.
Combined
inventory purchases for the month of $450,000, on credit, terms
2/10 net 30, XYZ uses the gross method
2.
Sell goods to customers for $750,000 (no discounts offered).
Perpetual
inventory system indicates that the cost of the goods sold was $500,000.
3.
Combined collections from customers of $560,000 of accounts receivable
during January.
4.
Management concludes that an adjustment to lower the cost of inventory to
market is required; the adjustment required is $20,000.
5.
One of the product lines is showing substantial declines in demand from
customers.
Management performed an undiscounted cash flow analysis and
determined that there is an impairment.
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- Winter '08
- anderson
- Balance Sheet, Generally Accepted Accounting Principles, Accumulated Depreciation accounts, perpetual inventory accounting, Inventory Marketable securities
-
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