Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 6, Problem 6.8SE
Applying the lower-of-cost-or-market rule
Assume that a Mega Burger restaurant has the following perpetual inventory record for hamburger patties:
At July 31, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $431. Make any
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Assume that a Steer Burger restaurant has the following perpetual inventory record for hamburger patties:
View the perpetual inventory record.
At February 28, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $515. Make any adjusting entry needed to apply the lower-of-cost-or-market rule. Merchandise inventory would be reported on the balance
sheet at what value on February 28?
...
Make any adjusting entry needed to apply the lower-of-cost-or-market rule. (Record debits first, then credits. Exclude explanations from journal entries. If no entry is required select "No entry required" on the first line of the journal entry table.)
Date
Feb. 28
Accounts
Debit
Credit
Perpetual inventory record
-
Cost of Goods
Merchandise
Date
Purchases
Sold
Inventory on Hand
Feb. 9
$
520
520
Feb. 22
230
290
Feb. 28
260
550
Assume that a Rocket Burger restaurant has the following perpetual inventory record for hamburger patties:
(Click the icon to view the perpetual inventory record.)
At July 31, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $520. Make any adjusting entry needed to apply the lower-of-cost-or-market rule. Merchandise inventory would be reported on the balance sheet at
what value on July 31?
Make any adjusting entry needed to apply the lower-of-cost-or-market rule. (Record debits first, then credits. Exclude explanations from journal entries. For situations that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and
leave all other cells blank.)
Date
Jul. 31
Accounts
Debit
Credit
Data table
Date
Jul. 9
Jul. 22
Jul. 31
$
Purchases
440
330
C
Print
Cost of Goods
Sold
$
200
Merchandise
Inventory on Hand
440
240
570
$
Done
K
Assume that a Steer Burger restaurant has the following perpetual inventory record for hamburger patties:
(Click the icon to view the perpetual inventory record.)
At July 31, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $400. Make any adjusting entry needed to apply
the lower-of-cost-or-market rule. Merchandise inventory would be reported on the balance sheet at what value on July 31?
Make any adjusting entry needed to apply the lower-of-cost-or-market rule. (Record debits first, then credits. Exclude explanations from journal entries. For situations that do not require
make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.)
Date
Jul. 31
Accounts
Debit
Credit
Data table
Date
Purchases
Cost of Goods
Sold
Merchandise
Inventory on Hand
Jul. 9
$
500
$
500
Jul. 22
$
280
220
Jul. 31
240
460
Print
Done
Chapter 6 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QCCh. 6 - At December 31, 2016, Stevenson Company overstated...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ
Ch. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - What is the goal of conservatism?Ch. 6 - Prob. 5RQCh. 6 - Under a perpetual inventory system, what are the...Ch. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - What does the lower-of-cost-or-market (LCM) rule...Ch. 6 - What account is debited when recording the...Ch. 6 - What is the effect on cost of goods sold, gross...Ch. 6 - When does an inventory error cancel out, and why?Ch. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15ARQCh. 6 - Prob. 16ARQCh. 6 - Determining inventory accounting principles Ward...Ch. 6 - Determining inventory costing methods Ward Hard...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Comparing Cost of Goods Sold under FIFO, UFO, and...Ch. 6 - Applying the lower-of-cost-or-market rule Assume...Ch. 6 - Determining the effect of an inventory error...Ch. 6 - Computing the rate of inventory turnover and days...Ch. 6 - Use the following information to answer Short...Ch. 6 - Prob. 6.12SECh. 6 - Prob. 6.13SECh. 6 - Using accounting vocabulary Match the accounting...Ch. 6 - Comparing inventory methods Zippy, a regional...Ch. 6 - Prob. 6.16ECh. 6 - Use the following information to answer Exercises...Ch. 6 - Use the following information to answer Exercises...Ch. 6 - Comparing amounts for cost of goods sold, ending...Ch. 6 - Comparing cost of goods sold and gross...Ch. 6 - Prob. 6.21ECh. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Prob. 6.24ECh. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Accounting for inventory using the perpetual...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Prob. 6.30APCh. 6 - Correcting inventory errors over a three-year...Ch. 6 - Accounting for inventory using the periodic...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Prob. 6.34BPCh. 6 - Prob. 6.35BPCh. 6 - Prob. 6.36BPCh. 6 - Prob. 6.37BPCh. 6 - Prob. 6.38CPCh. 6 - Accounting for inventory using the perpetual...Ch. 6 - Suppose you manage Campbell Appliance. The stores...Ch. 6 - Ever since he was a kid, Carl Montague wanted to...Ch. 6 - The notes are an important part of a companys...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2019 (unless otherwise indicated), are as follows: During May, the last month of the fiscal year, the following transactions were completed: Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section and place a check mark () in the Posting Reference column. Journalize the transactions for May, starting on Page 20 of the journal. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). 5. (Optional) Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. Insert the new balance in the owners capital account. 10. Prepare a post-closing trial balance.arrow_forwardOn June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as follows: Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2019. The merchandise inventory as of June 30, 2019, was 508,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was 33,000. 3. Prepare the closing entries for Simkins Company as of June 30, 2019. 4. What would the net income have been if the perpetual inventory system had been used?arrow_forwardRefer to the information for Morgan Inc. above. If Morgan uses a perpetual inventory system, what is the cost of ending inventory under FIFO at April 30? a. $32,500 b. $38,400 c. $63,600 d. $69,500arrow_forward
- Beginning inventory, purchases, and sales for Item Gidget are as follows: Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on September 27 and (b) the inventory on September 30.arrow_forwardOn April 5, a customer returns 20 bicycles with a sales price of $250 per bike to Barrio Bikes. Each bike cost Barrio Bikes $100. The customer had yet to pay on their account. The bikes are in sellable condition. Prepare the journal entry or entries to recognize this return if the company uses A. the perpetual inventory system B. the periodic inventory systemarrow_forwardBeginning inventory, purchases, and sales for Item Foxtrot are as follows: Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on March 27 and (b) the inventory on March 31.arrow_forward
- Assume that a Mega Burger restaurant has the following perpetual inventory record for hamburger patties: E (Click the icon to view the perpetual inventory record.) At December 31, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $376. Make any adjusting entry needed to apply the lower-of-cost-or-market rule. Merchandise inventory would be reported on the balance sheet at what value on December 31? Make any adjusting entry needed to apply the lower-of-cost-or-market rule. (Record debits first, then credits. Exclude explanations from journal entries. For situations that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.) Date Accounts Debit Data Table Dec. 31 Cost of Merchandise Date Purchases Goods Sold Inventory on Hand Dec 9 S 460 460 22 2$ 280 180 Choose from any list or enter any number in the input fields and then click 31…arrow_forwardAssume that a Mega Burger restaurant has the following perpetual inventory record for hamburger patties: Date Purchases Cost of Goods Sold Merchandise Inventory on Hand Jul. 9 $450 $450 Jul. 22 $280 170 Jul. 31 320 490 At July 31, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $440. Make any adjusting entry needed to apply the lower-of-cost-or-market rule. Merchandise inventory would be reported on the balance sheet at what value on July 31? Make any adjusting entry needed to apply the lower-of-cost-or-market rule. (Record debits first, then credits. Exclude explanations from journal entries. For situations that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.) Date Accounts Debit Credit Jul. 31…arrow_forwardAssume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Preparing a multi-step income statement and journalizing closing entries Triton Department Store uses a periodic inventory system. The adjusted trial balance of Triton Department Store at December 31, 2018, follows: Requirements Prepare Triton Department Store’s multi-step income statement for the year ended December 31, 2018. Assume ending Merchandise inventory is $36,300. Journalize Triton Department Store’s closing entries.arrow_forward
- Assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Journalizing purchase and sale transactions Journalize the following transactions that occurred in February 2018 for Oceanic No explanations arc needed. Identify each accounts payable and accounts receivable with the vendor or customer Oceanic estimates sales returns at the end of each month.arrow_forwardS6-8 (similar to) Question Help Assume that a Omega Burger restaurant has the following perpetual inventory record for hamburger patties: (Click the icon to view the perpetual inventory record.) At November 30, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $489. Make any adjusting entry needed to apply the lower-of-cost-or-market rule. Merchandise inventory would be reported on the balance sheet at what value on November 30? Make any adjusting entry needed to apply the lower-of-cost-or-market rule. (Record debits first, then credits. Exclude explanations from journal entries. For situations that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.) Date Accounts Debit Credit i Data Table Nov. 30 Cost of Merchandise Date Purchases Goods Sold Inventory on Hand Nov. 9 $ 490 $ 490 22 $ 270 220 30 220 440 Print Donearrow_forwardAssume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Journalizing purchase and sale transactions—periodic inventory system Journalize the following transactions that occurred in March 2018 for Double Company. Assume Double uses the periodic inventory system. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Double estimates sales returns at the end of each month.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
IAS 29 Financial Reporting in Hyperinflationary Economies: Summary 2021; Author: Silvia of CPDbox;https://www.youtube.com/watch?v=55luVuTYLY8;License: Standard Youtube License