Bosco Company adopted the dollar-value LIFO retail method at the beginning of 2021. Information for 2021 and 2022 is as follows.with certain data intentionally omitted:Required:Determine the missing data. (Round "Cost-to-Retail Percentage" to the nearest whole percent (i.e., 0.1234 should be entered as12%).)InventoryRetailCost to RetailDateCostRetailPrice IndexPercentageInventory, 1/12021Inventory, 12/31/20212022 net purchases22.800 S30.0001.0032.00046.0001.1567,62098.00085,500ces2022 net salesinventory 12/31/20221.30

In this question we have to use the LIFO retail method LIFO means last in first out.

Bosco Company adopted the dollar-value LIFO retail method at the beginning of 2021 Information for 2021 and 20 with certain data intentionally omitted: Required: Determine the missing data (Round "Cost-to-Retail Percentage" to the nearest whole percent (i.e., 0.1234 shoula 12%)

Bosco Company adopted the dollar-value LIFO retail method at the beginning of 2021 Information for 2021 and 20 with certain data intentionally omitted: Required: Determine the missing data (Round "Cost-to-Retail Percentage" to the nearest whole percent (i.e., 0.1234 shoula 12%)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...

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Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
Fava Company began operations in 2018 and used the LIFO inventory method for both financial reporting and income taxes. At the beginning of 2019, the anticipated cost trends in the industry had changed, so that it adopted the FIFO method for both financial reporting and income taxes. Fava reported revenues of 300,000 and 270,000 in 2019 and 2018, respectively. Fava reported expenses (excluding income tax expense) of 125,000 and 120,000 in 2019 and 2018, which included cost of goods sold of 55,000 and 45,000, respectively. An analysis indicates that the FIFO cost of goods sold would have been lower by 8,000 in 2018. The tax rate is 21%. Fava has a simple capital structure with 15,000 shares of common stock outstanding during 2018 and 2019. It paid no dividends in either year. Required: 1. Prepare the journal entry to reflect the change. 2. At the end of 2019, prepare the comparative income statements for 2019 and 2018. Notes to the financial statements are not necessary. 3. At the end of 2019, prepare the comparative retained earnings statements for 2019 and 2018.
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Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
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