Week 1 Homework Solutions

Week 1 Homework Solutions - BE82 Description/Account...

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BE8-2 Description/Account Debit Credit Inventory  (150  ×  $34) 5,100            Accounts payable   5,100 (To record inventory purchased.)     Accounts payable  (6  ×  $34) 204             Inventory   204 (To record inventory returned.)     Accounts receivable  (125  ×  $50) 6,250            Sales   6,250 (To record inventory sold.)     Cost of goods sold  (125  ×  $34) 4,250           Inventory   4,250 (To record cost of goods sold.)     BE8-4 Cost of goods sold as reported $1,400,000  Overstatement of 12/31/09 inventory (110,000) Overstatement of 12/31/10 inventory 35,000      Corrected cost of goods sold $1,325,000  12/31/10 retained earnings as reported $5,200,000  Overstatement of 12/31/10 inventory (35,000)     Corrected 12/31/10 retained earnings $5,165,000 BE8-9
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2010 inventory at base amount ($22,140  ÷  1.08) $20,500  2009 inventory at base amount (19,750) Increase in base inventory  $750  2010 inventory under LIFO       Layer one ($19,750  ×  1.00) $19,750     Layer two ($750  ×  1.08) 810   $20,560     2011 inventory at base amount ($25,935  ÷  1.14) $22,750  2010 inventory at base amount (20,500) Increase in base inventory  $2,250  2010 inventory under LIFO       Layer one ($19,750  ×  1.00) $19,750     Layer two ($750  ×  1.08) 810     Layer three ($2,250  ×  1.14) 2,565   $23,125 E8-1 (Inventoriable Costs)   Presented below is a list of items that may or may not be reported as inventory in a company's December 31  balance sheet.  Indicate which of these items would typically be reported as inventory in the financial statements. If an item should  not be reported as inventory, indicate how it should be reported in the financial statements.      Item in Financial Statement Financial Statement 1.
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