# Shared Flashcard Set

## Details

Chapter 06 H.W.
Accounting 01
10
Accounting
12/03/2015

Term
 Periodic Inventory by Three Methods:   The units of an item available for sale during the year were as follows:   Jan. 1       Inventory    18 units at \$1,440 Feb. 17     Purchase     36 units at \$1,656 July 21      Purchase     42 units at \$1,872 Nov. 23     Purchase     24 units at \$1,980   There are 32 untis of the item in the physical inventory at December 31. The periodic inventory system is used.    a. Determine the inventory cost by the FIFO method.   b. Determine the invnetory cost by the LIFO method.   c. Determine the invnetory cost by the weigthed average cost method.
Definition
 a.\$62,496 FIFO: (24 x \$1,980) + ((32 - 24) x \$1,872) = \$62,496   b. \$49,104 LIFO: (18 x \$1,440) + ((32 - 18) x \$1,656) =\$49,104   c. \$56,448 WEIGHTED AVERAGE COST:  Jan. 1       Inventory    18 units at \$1,440 Feb. 17     Purchase     36 units at \$1,656 July 21      Purchase     42 units at \$1,872 Nov. 23     Purchase     24 units at \$1,980                 Totals         120          \$211,680    \$211,680 / 120 = \$1,764 x 32 units = \$56,448
Term
 Review Chapter 06 H.W. Pages 1- 2
Definition
Term
 In regards to the Inventory at the Lower of Cost or Market, choose the lower cost.   True    False
Definition
 True
Term
 In 2014, Yellow River Supply Co. incorrectly counted its inventory as \$324,650 instead of the correct amount of \$338,500.   State the effect of the error on the:   a. Cost of Merchandise Sold. b. Gross Profit c. Net Income   If uncorrected, what would be the effect of teh eror on the 2015 income statement?   d. Cost of Merchandise Sold e. Gross Profit f. Net Income
Definition
 a. Overstated b. Understated c. Understated d. Understated e. Overstated f. Overstated
Term
 Consider the following data:                                                    Apple           Dell Cost of goods sold                       \$39,541,000  \$682,368 Inventory, end of year                   1,051,000    179,730 Inventory, beginning of the year      455,000      163,956   Determine the inventory turnover for (a.) Apple and (b.) Dell. Round to one decimal place.
Definition
 a. 52.2 \$39,541,000 / ((1,051,000 + 455,000) / 2) = 52.2   b. 4 \$682,368 / ((179,730 + 163,956) / 2) = 4     *Side Note:  Inventory Turnover = Cost of Goods Sold / ((Begining Inventory + Ending Inventory) / 2)
Term
 Consider the Following Data:                                                  Cost            Retail Merchandise Inventory, June 1    165,000       275,000 Purchases in June (net)              2,361,500    3,800,000 Merchandise Available for Sale    2,526,500    4,075,000 Sales                                                        3,550,000   Determine the following: a. ratio of cost to retail price b. Merchandise inventory, June 30, at retail price c. Merchandise inventory, June 30, at estimated cost
Definition
 a. 62 % b. \$525,000 c. \$325,500                                                  Cost            Retail  Merchandise Inventory, June 1    165,000       275,000 Purchases in June (net)              2,361,500    3,800,000 Merchandise Available for Sale    2,526,500    4,075,000 Ratio of cost to retail Price: (2,526,000 / 4,075,000) 62%  Sales                                                        3,550,000 Merchandise Inventory, June 30, at retail price   (4,075,000 - 3,550,000) \$525,000 Merchandise Inventory, June 30, at estimated cost (525,000 x .62) \$325,500
Term
 Cost of Merchandise Sold (Equation)
Definition
 Net Sales  - (Net Sales x Estimated Gross Profit Rate)
Term
 Estimated Ending Merchandise Inventory (Equation)
Definition
 Merchandise Available for Sale - Cost of Merchandise Sold
Term
 Given the data from Chapter 06 H.W. page 11, determine: a. Total Sales b.Total Cost of Merhandise Sold c. Gross Profit from Sales
Definition
 a. \$483,800 (Sum of all SALES from Non-LIFO)   b. \$293,000 (Sum of all SALES from LIFO)   c.\$189,900 \$483,800 - \$293,000 = 189,900
Term
 Review Chapter 06 H.W. Pages 13-14
Definition
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