What is the correct answer to the question? Provide solution. PROBLEM 3-22Correcting Physical Inventory CountIn your audit of the RABBIT, INC., you find that a physical inventory count on December 31, 2018, showedmerchandise costing P463,000 was on hand at that date. Your examination reveals the following items were allexcluded from the inventory per count.1. Merchandise of P20,000 which is held on consignment.2. Goods costing P39,500 that were shipped FOB shipping point on December 31, 2018. These goods weredelivered to the customer on January 6, 2019.3. Goods costing P 16,800 that were shipped FOB destination to a customer on December 29, 2018. The customerreceived these goods on January 2, 2019.4. Merchandise costing P 76,150 shipped by a seller FOB destination on December 28, 2018, and received byRabbit, Inc. on January 3, 2019.5. Goods costing P 16,500 shipped by a vendor FOB seller on December 31, 2018, and received by Rabbit, Inc. onJanuary 4, 2019.What is the amount that should appear on Rabbit, Inc.'s statement of financial position as inventory at December 31,2018?

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Description: What is the correct answer to the question? Provide solution. PROBLEM 3-22Correcting Physical Inventory CountIn your audit of the RABBIT, INC., you find that a physical inventory count on December 31, 2018, showedmerchandise costing P463,000 was on h

The ending inventory consists of the goods that belongs to the suppliers. The goods that are sold…

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ROBLEM 3-22 Correcting Physical Inventory Count your audit of the RABBIT, INC., you find that a physical inventory count on December 31, 2018, showed herchandise costing P463,000 was on hand at that date. Your examination reveals the following items were all xcluded from the inventory per count. Merchandise of P20,000 which is held on consignment. Goods costing P39,500 that were shipped FOB shipping point on December 31, 2018. These goods were elivered to the customer on January 6, 2019. Goods costing P 16,800 that were shipped FOB destination to a customer on December 29, 2018. The customer eceived these goods on January 2, 2019. Merchandise costing P 76,150 shipped by a seller FOB destination on December 28, 2018, and received by abbit, Inc. on January 3, 2019. Goods costing P 16,500 shipped by a vendor FOB seller on December 31, 2018, and received by Rabbit, Inc. on anuary 4, 2019. What is the amount that should appear on Rabbit, Inc.'s statement of financial position as inventory at December 31, 018?

ROBLEM 3-22 Correcting Physical Inventory Count your audit of the RABBIT, INC., you find that a physical inventory count on December 31, 2018, showed herchandise costing P463,000 was on hand at that date. Your examination reveals the following items were all xcluded from the inventory per count. Merchandise of P20,000 which is held on consignment. Goods costing P39,500 that were shipped FOB shipping point on December 31, 2018. These goods were elivered to the customer on January 6, 2019. Goods costing P 16,800 that were shipped FOB destination to a customer on December 29, 2018. The customer eceived these goods on January 2, 2019. Merchandise costing P 76,150 shipped by a seller FOB destination on December 28, 2018, and received by abbit, Inc. on January 3, 2019. Goods costing P 16,500 shipped by a vendor FOB seller on December 31, 2018, and received by Rabbit, Inc. on anuary 4, 2019. What is the amount that should appear on Rabbit, Inc.'s statement of financial position as inventory at December 31, 018?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 62E

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( Appendix 6B) Inventory Costing Methods Grencia Company uses a periodic inventory system. For 2018 and 2019, Grencia has the following data (assume all purchases and sales are for cash): Required: 1. Compute cost of goods sold, the cost of ending inventory, and gross margin for each year using FIFO. 2. Compute cost of goods sold, the cost of ending inventory, and gross margin for each year using LIFO. 3. Compute cost of goods sold, the cost of ending inventory, and gross margin for each year using the average cost method. ( Note: Use four decimal places for per unit calculations and round all other numbers to the nearest dollar.) 4. CONCEPTUAL CONNECTION Which method would result in the lowest amount paid for taxes? 5. CONCEPTUAL CONNECTION Which method produces the most realistic amount for income? For inventory? Explain your answer. 6. CONCEPTUAL CONNECTION What is the effect of purchases made later in the year on the gross margin when LIFO is employed? When FIFO is employed? Be sure to explain why any differences occur. 7. CONCEPTUAL CONNECTION If you worked Problem 6-68B, compare your answers. What are the differences? Be sure to explain why any differences occurred.
Errors As controller of Lerner Company, which uses a periodic inventory system, you discover the following errors in the current year: 1. Merchandise with a cost of 17,500 was properly included in the final inventory, but the purchase was not recorded until the following year. 2. Merchandise purchases are in transit under terms of FOB shipping point. They have been excluded from the inventory, but the purchase was recorded in the current year on the receipt of the invoice of 4,300. 3. Goods out on consignment have been excluded from inventory. 4. Merchandise purchases under terms FOB shipping point have been omitted from the purchases account and the ending inventory. The purchases were recorded in the following year. 5. Goods held on consignment from Talbert Supply Co. were included in the inventory. Required: For each error, indicate the effect on the ending inventory and the net income for the current year and on the net income for the following year.
PROBLEM 21: A physical inventory taken on December 31, 2021 resulted in an ending inventoryof P1,440,000. San Salvador Company suspects some inventory may have been takenbyemployees. To estimate the cost of missing inventory, the following were gathered: Inventory, December 31, 2020 P 1,280,000 Purchases during 2021 5,640,000 Cash sales during 2021 1,400,000 Shipment received on December 26, 2021, included in physical inventory but not recorded as purchases 40,000 Deposits made with suppliers, entered as purchases. Goods were not received in 2021 80,000 Collections on accounts receivable, 2021 7,200,000 Accounts receivable, January 1, 2021 1,000,000 Accounts receivable, December 31, 2021 1,200,000 Gross profit percentage on sales 40% 27. At December 31, 2021, what is the estimated cost of missing inventory?
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PROBLEM 6: XXX Company is preparing its 2021 financial statements. Prior to any adjustments, inventory is valued at P1,605,000. The following information has been found relating to certaininventory transactions from your cut-off test: A. Goods valued at P110,000 are on consignment with a customer. These goods werenot included in the ending inventory figure. B.Goods costing P87,000 were received from a vendor on January 5, 2022. The relatedinvoice was received and recorded on January 12, 2022. The goods were shippedonDecember 31, 2021, terms FOB shipping point. C. Goods costing P85,000, sold for P102,000, were shipped on December 31, 2021, andwere delivered to the customer on January 2, 2022. The terms of the invoice wereFOBshipping point. The goods were included in the ending inventory for 2021 and thesalewas recorded in 2022. D. A P35,000 shipment of goods to a customer on December 31, terms FOB destinationwas not included in the year-end inventory. The goods cost P26,000…
Exercise 3: Calculating inventory by two methods – periodic system A Best Yet Electronic Centre began December with 140 units of inventory that cost $75 each. During December, the store made the following purchases: Dec. 03 217 @ $79 12 95 @ $82 18 210 @ $83 24 248 @ $87 The store uses the periodic inventory system, and the physical count at 31 December indicates that 229 units of inventory are on hand. Requirements: 1. Determine the ending inventory and cost of goods sold amounts for the December financial statements under the average-cost and FIFO methods. Round average cost per unit to the nearest cent and all other amounts to the nearest dollar. 2. Sales revenue for December totalled $90,000. Calculate Best Yet's gross profit for December under each method. 3. Which method will result in the lowest income taxes for Best Yet? Why? Which method will result in the highest net profit for Best Yet? Why?
Question 21: A company that uses the perpetual inventory system sold goods to a customer cash on September 10 for $20. The company has the following inventory information: January 1 Beginning Inventory, 15 units at $9 each -June 10 Purchase, 17 units at $10 each September 10 Sale, 8 units The company uses the LIFO method of inventory costing. Calculate the cost of goods sold for the sale on September 10. a) $48 b) $160 c) $88 d) $170 e) $80
Inventory Errors 1. On December 31, ABC Company counted and recorded $500,000 of inventory. This count did not include $80,000 of goods in transit, shipped to ABC Company on December 29, FOB shipping point. ABC Company recorded the purchase correctly on December 29 when the goods were shipped. A. Determine the correct December 31 inventory balance. B. Identify any accounts that are in error, and state the amount and direction (overstatement or understatement) of the error. Explain for each answer please, I don't understand.
Question 4: Assume that Swann Company uses a periodic inventory system and has these account balances: Purchases $630,000; Purchase Returns and Allowances $25,000; Purchase Discounts $11,0003; and Freight-In $19,000; beginning inventory of $45,000; ending inventory of $55,000; and net sales of $750,000. Instructions: Determine the a) cost of goods sold and b)Gross profit ( show computations)
Question 1 Comvita follows the period inventory accounting. During the reporting period ended 31st December 2018, Comvita have sold 250, 000 units of Manuka honey with a sales price of $100. Analyse how inventory valuation methods impact on financial statement analysis of Comvita. The Comvita management has asked you to recommend from three inventory valuation methodse. FIFO, LIFO and weighted average for their cost of goods sold. The management have provided you with the following data,-(LO2) Inventory at 1 Jan 2018 is 90,000 units @ $ 50 Inventory at 30 March 2018 is 110,000 units @ 52 Inventory at 1st July 2018 is 55,000 units @ 60 Inventory at 1st October is 65,000 @ 70 (LO2. Apply accounting tools and techniques to analyse and resolve complex situations within an organisation). Note: Your recommendation should be supported with the evaluation of cost of goods sold calculation for each inventory methods .
QUESTION 3: A company with an accounting date of 31 October carried out a physical check of inventory on 4 November 20X3, leading to an inventory value at cost at this date of $483,700. Between 1 November 20X3 and 4 November 20X3 the following transactions took place: 1 Goods costing $38,400 were received from suppliers. 2 Goods that had cost $14,800 were sold for $20,000. 3 A customer returned, in good condition, some goods which had been sold to him in October for $600 and which had cost $400. 4 The company returned goods that had cost $1,800 in October to the supplier, and received a credit note for them. What figure should appear in the company's financial statements at 31 October 20X3 for closing inventory, based on this information
The following information relates to inventory for Curious George Incorporated: Date March 1 March 7 March 12 O $70 Transaction $110 $105 $2,630 Units Unit cost Beginning Inventory 20 Purchase 15 Purchase 15 $2 $3 A physical inventory count revealed 20 units remained on hand at March 31. At what amount would Careless George report cost of goods sold using the average cost flow assumption with a periodic inventory system? $6