3101 Homework Solutions ch0.09

3101 Homework Solutions ch0.09 - Acct 3101 Intermed. Acctg...

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Acct 3101 Intermed. Acctg 1 Homework Solutions Text: Kieso et al. 13 th ed. Chapter 9 EXERCISE 9-2 Item Net Realizable Value (NRV) (Ceiling) NRV Less Normal Profit (Floor) Replacement Cost Designated Market Cost LCM D $90* $70** $120 $90 $75 $75 E 80 60 72 72 80 72 F 60 40 70 60 80 60 G 55 35 30 35 80 35 H 80 60 70 70 50 50 I 60 40 30 40 36 36 *Estimated selling price – Estimated selling expense = $120 – $30 = $90. **Net realizable value – Normal profit margin = $90 – $20 = $70. File: 3101 homework solutions ch.09 Page 1
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EXERCISE 9-17 Ending inventory: (a) Gross profit is 40% of sales Total goods available for sale (at cost). ................ $2,100,000 Sales (at selling price). ........................................... $2,300,000 Less: Gross profit (40% of sales). ........................ 920,000 Sales (at cost). ............................................. 1,380,000 Ending inventory (at cost). ....................... $ 720,000 (b) Gross profit is 60% of cost 60% = 37.5% markup on selling price 100% + 60% Total goods available for sale (at cost). ................ $2,100,000 Sales (at selling price). ........................................... $2,300,000 Less: Gross profit (37.5% of sales). ..................... 862,500 Sales (at cost). ............................................. 1,437,500 Ending inventory (at cost). ....................... $ 662,500 (c) Gross profit is 35% of sales File: 3101 homework solutions ch.09 Page 2
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Total goods available for sale (at cost). ................ $2,100,000 Sales (at selling price). ........................................... $2,300,000 Less: Gross profit (35% of sales). ........................ 805,000 Sales (at cost). ............................................. 1,495,000 Ending inventory (at cost). ....................... $ 605,000 (d) Gross profit is 25% of cost 25% = 20% markup on selling price 100% + 25% Total goods available for sale (at cost). ................ $2,100,000 Sales (at selling price). ........................................... $2,300,000 Less: Gross profit (20% of sales). ......................... 460,000 Sales (at cost). ......................................................... 1,840,000 Ending inventory (at cost). .................................... $ 260,000 File: 3101 homework solutions ch.09 Page 3
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EXERCISE 9-22 (a) Conventional Retail Method
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3101 Homework Solutions ch0.09 - Acct 3101 Intermed. Acctg...

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