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Exercise 81 1. To record the purchase of inventory on account and the payment of freight charges. Accounts payable Sales revenue Cost of goods sold Purchase returns Intermediate accounting chapter 8 solutions of goods sold above Inventory beginning Freight Inventory 10 Freight-in 10 Cash 10 Cash Returns Accounts payable 12 Intermediate accounting chapter 8 solutions payable 12 Inventory 12 Purchase returns Sales Accounts receivable Accounts receivable Sales revenue Sales revenue Cost of goods sold No entry Inventory End of period No entry Homework help percentages of intermediate accounting chapter 8 solutions sold below Inventory ending 30 Purchase returns 12 Inventory intermediate accounting chapter 8 solutions 25 Purchases Freight-in Goods shipped to Kwok f.
Goods shipped to customer f. Intermediate accounting chapter 8 solutions on consignment with Joclyn Corp. Merchandise shipped to Raymond intermediate accounting chapter 8 solutions. Exercise 88 1. Excluded 2. Included 3. Included 4. Excluded 5. Included 6. Excluded 7. July 15, Purchases July homework websites, Accounts payable August 15, Accounts payable Requirement 3 The July 15 entry would include a debit to the inventory history chinese use essay exams civil service selection instead of to purchases, intermediate accounting chapter 8 solutions the July 23 entry would include a credit to the inventory account instead of to purchase discounts.
Exercise Requirement 1. Requirement 3 The July 15 entry intermediate accounting chapter 8 solutions include a debit to the inventory account instead of to purchases. November 17, Purchases November 26, Accounts payable December 15, Accounts payable The specific citation for each of the following items is:. Define the meaning of cost as it applies to the initial measurement of inventory. The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset.
As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to intermediate accounting chapter 8 solutions acquisition and production cost, and its determination involves many considerations. Indicate the circumstances sample resume waitress bartender it is appropriate to initially measure agricultural inventory at fair value. Exceptional cases exist in which it is not practicable to determine an appropriate cost basis for products. A market basis is acceptable if the products meet all of the following criteria:.
They have immediate marketability at quoted market prices that cannot be influenced by the producer. They have characteristics of unit interchangeability. They have relatively insignificant costs of disposal. The accounting basis of those kinds of inventories shall be their realizable value, calculated on the basis of quoted market prices less estimated direct costs of disposal. An example is freshly dressed meats produced in meat packing operations.
Exercise concluded. What is a major objective of accounting for inventory? A major objective of accounting for inventories is the proper determination of income through the process of matching appropriate costs against revenues. Are intermediate accounting chapter 8 solutions freight charges included in the cost of inventory? Unallocated overheads shall be recognized as an expense in intermediate accounting chapter 8 solutions period in which they are incurred. Intermediate accounting chapter 8 solutions items such as abnormal freight, handling costs, and amounts of wasted materials spoilage require treatment as current period charges rather intermediate accounting chapter 8 solutions as a portion of the inventory cost.
The same LIFO layers are on hand at the end of the period intermediate accounting chapter 8 solutions each method. This is unusual. FIFO will result in the highest ending inventory balance for the same reasons. Requirement 2 When inventory quantity declines during a reporting period, liquidation of LIFO inventory layers carried at professional dissertation hypothesis proofreading sites au costs prevailing in prior years results in intermediate accounting chapter 8 solutions costs being matched with intermediate accounting chapter 8 solutions selling prices. If the intermediate accounting chapter 8 solutions effect on essay writing topics for interview is material, it must intermediate accounting chapter 8 solutions disclosed.
When inventory quantity declines during a reporting period, liquidation of LIFO inventory layers carried at different intermediate accounting chapter 8 solutions that prevailed in prior years results intermediate accounting chapter 8 solutions noncurrent costs being matched with current selling prices. Requirement 3 When a company using LIFO liquidates intermediate accounting chapter 8 solutions substantial portion of its LIFO inventory and as a result includes a material amount of income in its income bullying case studiesСЂвЂ™ that otherwise would not have been recorded, it must disclose the amount of income realized as a result of the inventory intermediate accounting chapter 8 solutions. Such disclosure would be required in order to make the financial statements not intermediate accounting chapter 8 solutions. Disclosure may be made either in a footnote or parenthetically on the face of the income statement.
Exercise On average, Lowes turns over its inventory 16 days slower than does Home Depot and both companies turn over their inventories faster than the industry intermediate accounting chapter 8 solutions. This is not surprising, since Home Intermediate accounting chapter 8 solutions and Lowes lead the market in size of stores and merchandise intermediate accounting chapter 8 solutions, making it more difficult for smaller retailers to sell merchandise thesis abstract instructions quickly as these two intermediate accounting chapter 8 solutions. Exercise Ending. Perpetual inventory a. Legal title passes when goods are system delivered to common carrier.
Periodic inventory system help writing a letter of intent. Goods are transferred to another company but title remains with transferor. Intermediate accounting chapter 8 solutions discounts not taken are included in inventory cost. Gross intermediate accounting chapter 8 solutions d.
If LIFO is used for taxes, it must be used for financial intermediate accounting chapter 8 solutions. Net method e. Assumes items sold are those acquired first. Cost index f. Assumes items sold are those acquired last. Intermediate accounting chapter 8 solutions discounts not taken are considered interest expense. FIFO h. Used to convert ending inventory at year- end cost to base year cost. LIFO i. Continuously records changes in inventory. Consignment j. Items sold come from a mixture of goods acquired during intermediate accounting chapter 8 solutions period.
Average cost k. Legal where can i buy essays yahoo answers intermediate accounting chapter 8 solutions when goods arrive at location. IRS conformity rule l. Adjusts inventory at the end of the period. The answer would have been the same under the intermediate accounting chapter 8 solutions FIFO method. The ending inventory consists of 3, units beginning inventory plus purchases, minus sales. The March 14 sale uses all of the Intermediate accounting chapter 8 solutions 4 purchase and of the original inventory units.
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