Setup date description units unit cost goods

Info icon This preview shows pages 8–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Setup: Date Description Units Unit Cost Goods Available Jan 1 Jan 8 Jan 29 Cost of Goods Sold based on ______________________units d. FIFO e. LIFO f. Weighted Average Ending Inventory based on ______________units g. FIFO h. LIFO d. Weighted Average PA8-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System Gladstone Company uses a periodic inventory system. At the end of the annual accounting period, December 31, 2005, the accounting records for the most popular item in inventory showed the following: Transactions Units Unit Cost Goods Available Sold Units Revenue Beginning Inventory, Jan 1, 2005 1800 2.50 Transactions during 2005 Purchases January 30 2,500 3.10 Sale March 14, ($5 each) 1450 Purchase, May 1 1200 4.00 Sale, August 31 ($5 each) 1900 Acc 2013 Exam 2 Boot Camp Page 8 of 10
Image of page 8

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

View Full Document Right Arrow Icon
Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31, 2005, under each of the following inventory costing methods: b. Last-in, first-out. c. First-in, first-out. 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? e. Gross Margin (Profit) $ amount & % Goods available for sale Inventory turnover / days in inventory E6-22 (Adapted ) Inferring Missing Amounts Based on Income Statement Relationships Supply the missing dollar amounts for the 2008 income statement of Lewis Retailers for each of the following independent cases: Cases Sales Revenue Beg. Inventory Purchases Cost of Goods Sold Cost of Ending Inventory Gross Profit A $ 650 $100 $700 $300 B 900 200 800 150 C 150 200 300 400 D 800 600 650 250 E 1,000 50 900 500 Alternative Goods Available for Sale Inventory Turnover Days in Invent. Case A ___________________ ________________ ____________ Case B ___________________ ________________ ____________ Case C ___________________ ________________ ____________ Gross Profit Percentage Case D ___________________ Acc 2013 Exam 2 Boot Camp Page 9 of 10
Image of page 9
E7-2 Inferring Missing Amounts Based on Income Statement Relationships Supply the missing dollar amounts for the 2008 income statement of Lewis Retailers for each of the following independent cases: Case Sales Beg Inv Purchases Goods Available Ending Inv COGS Gross Profit S & A Expenses Net Income A $800 $100 $700 $500 $200 B 900 200 700 150 0 C 150 250 200 400 100 D 800 600 250 250 $100 f. Bad Debt Expense and Ending balance in Allowance 1. % of sales 2. % of Accounts Receivable (Aka –Aging) PA7-1 (Adapted) Kraft Foods Inc. is the second-largest food and beverage company in the world. Assume the company recently reported the following amounts in its unadjusted trial balance as of December 31, 2005 (all amounts in millions): Required: 1.Assume Kraft uses ½ of 1 percent of sales to estimate its bad debt expense for the year. If you also assume that no bad debt expense has been recorded for 2005, what adjusting journal entry would be required at December 31, 2005, for bad debt expense? 2. Assume Kraft uses the aging of accounts receivable method and estimates that 10% of accounts receivable will be uncollectible. Prepare the adjusting journal entry required at December 31, 2005, for recording bad debt expense.
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern