Accounting-financial reports

Accounting-financial reports

Subject: Business    / Accounting
Question
12. Yorkins Inc. was organized on January 1, 2012. On December 31, 2013, the company
lost most of its inventory in a warehouse fire just before the year end count of inventory.
Data from records is disclosed below:
12/31/12
Beginning Inventory
$
0
Purchases
300,000
Purchases returns & allowances
12,000
Sales
305,714
Sales returns & allowances
2,000 12/31/113
$ 60,000
400,000
18,000
495,000
4,000 On January 1, 2013, the company’s pricing policy was changed so that the gross profit
rate would increase by 3%. Salvaged undamaged merchandise was marked to sell at
$ 35,000 while damaged merchandise marked to sell at $ 30,000 had an estimated value
of $ 8,000.
Determine the company’s inventory loss using gross profit method. 13. Calculate what the correct net income should have been using both the long and short
methods to correct inventory errors and the following information.
.
2010
2011
2012
2013
Incorrect net income
32,000
46,000 (20,000)
40,000
Ending inventory understated 8,000 Ending inventory overstated 5,000 9,000
12,000 14. The Wonder Inc manufactures a single product. On December 31, 2009, the company
adopted the dollar value lifo method. The inventory method that date was based on
$ 210,000. Other inventory data follows:
Year-end date
12/31/10
12/31/11
12/31/12
12/31/13 Year-end inventory
240,000
260,000
248,000
238,000 Price Index
1.04
1.05
1.07
1.03 Provide an excel worksheet using the dollar value method for the above information.
15. The Springbreak Company uses the retail inventory method. Information relating to the computation of the inventory at December 31, 2013 follows:
Freight In
Sales
Net markups
Net markdowns
Sales discounts
Sales returns
Purchases discounts
Beginning Inventory
Purchases 9,000
268,800
22,000
30,000
24,000
36,000
42,000
Cost
50,000
$ 240,000 Retail
80,000
$ 396,000 a. Complete using lower the cost or market retail method.
b. Complete using the average cost method. 16. Gross method and Net Method of recording purchases and making invoice
payments.
Baker Inc purchased goods from Hershey Inc. on February 10, 2013 costing
$ 46,000 with the following terms: Cash Discount of 3/10, n30.
a. Record the purchase and payment entry under gross method assuming they
paid on February 15, 2013.
b. Record the purchase and payment entry under net method assuming they
paid on February 15, 2013.
c. Record the payment entry for both gross and net method if they paid on
February 25, 2013.