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1. Hercula Pool Supplies's merchandise inventory data for the year ended December 31, 2019, follow (Click the icon to view the inventory data.) Read the requirements Requirement 1. Assume that the ending merchandise inventory was accidentally overstated by $2,100. What are the correct amounts for cost of goods sold and gross profit? Cost of goods sold in 2019 would be $ L What is the correct amount of gross profit? Gross profit in 2019 would be $ . Requirement 2. How would the inventory error affect Hercula Pool Supplies's cost of goods sold and gross profit for the year ended December 31, 2020, if the error is not corrected in 2019? Cost of goods sold for 2020 would be (1) by s How would the inventory error affect Hercula Pool Supplies's gross profit for the year ended December 31, 2020, if the error is not corrected in 2019? Gross profit for 2020 would be (2) bys . 1: Data Table $ 70,000 $ Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold 3,900 44,600 48,500 5,800 42.700 $ 27,300 Gross Profit 2: Requirements 1. Assume that the ending merchandise inventory was accidentally overstated by $2,100. What are the correct amounts for cost of goods sold and gross profit? 2. How would the inventory error affect Hercula Pool Supplies's cost of goods sold and gross profit for the year ended December 31, 2020, if the error is not corrected in 2019? overstated understated (2) O O overstated understated 2. Serenity reported the following income statement for the year ended December 31, 2019: Click the icon to view the income statement.) Requirements 1. Compute Serenity's inventory turnover rate for the year. (Round to two decimal places.) 2. Compute Serenity's days' sales in inventory for the year. (Round to two decimal places.) Requirement 1. Computo Serenity's inventory turnover rate for the year. (Round to two decimal places.) Select the labels and enter the amounts to compute the inventory turnover rate. (Round your answer to two decimal places X.XX.) Inventory tumover times Requirement 2. Compute Serenity's days' sales in inventory for the year. (Round to two decimal places.) Select the labels and enter the amounts to compute the days' sales in inventory for the year. (Enter all amounts to two decimal places, X.XX.) = Days' sales in inventory days (3) 3. Data Table Serenity Income Statement Year Ended December 31, 2019 Sales Revenue $ 168,000 Cost of Goods Sold: Beginning Merchandise Inventory S 9 ,600 Net Cost of Purchases 74,000 Cost of Goods Available for Sale 83.600 Less: Ending Merchandise Inventory 13,000 Cost of Goods Sold 70.600 Gross Profit 97,400 Operating Expenses 67.900 Net Income $ 29,500 3. Consider the data of the following companies which use the periodic inventory system: (Click the icon to view the data.) Read the requirements Requirement 1. Supply the missing amounts for each of the following companies Company Ash Beginning Ending Net Sales Merchandise Net Cost of Merchandise Cost of Revenue Inventory Purchases Inventory Goods Sold $ 109,000 $ 20,000 $ 63,000 $ 17,000 $ 25,000 98,000 96,000 90,000 52.000 21,000 64,000 85,000 9,000 4.000 Gross Profit 43,000 49,000 Elm Fir Oak 53,000 Requirement 2. Prepare the income statement for the year ended December 31, 2019, for Ash Company, which uses the periodic inventory system. Include a complete heading and show the full computation of cost of goods sold. Ash's operating expenses for the year were $17,000. Cost of Goods Sold: (8) (10) (11) Net Income 4: Data Table Company Ash Beginning Ending Net Sales Merchandise Net Cost of Merchandise Cost of Revenue Inventory Purchases Inventory Goods Sold $ 109,000 $ 20,000 $ 63,000 $ 17,000 (a) $ (b) 25,000 98,000 (c) 96,000 90,000 (d) 52,000 21.000 64.000 85,000 9,000 4,000 (9) Gross Profit 43,000 49,000 Elm Oak 53,000 5: Requirements 1. Supply the missing amounts in the preceding table. 2. Prepare the income statement for the year ended December 31, 2019, for Ash Company, which uses the periodic inventory system, Include a complete heading, and show the full computation of cost of goods sold. Ash's operating expenses for the year were $17,000. December 31, 2019 O Year Ended December 31, 2019 (1) O Ash Company O Balance Sheet Income Statement O December 31, 2019 Year Ended December 31, 2019 (2) O Ash Company O Balance Sheet O Income Statement December 31, 2019 Year Ended December 31, 2019 (3) O Ash Company O Balance Sheet Income Statement Operating Expenses Total Expenses (4) O O Beginning Merchandise Inventory O Cost of Goods Available for Sale Cost of Goods Sold O Gross Profit Less: Ending Merchandise Inventory ONet Cost of Purchases O Net Sales Revenue Operating Expenses Total Expenses (5) O O Beginning Merchandise Inventory O Cost of Goods Available for Sale O Cost of Goods Sold Gross Profit Less: Ending Merchandise Inventory Net Cost of Purchases O Net Sales Revenue (6) O Operating Expenses Total Expenses Beginning Merchandise Inventory Cost of Goods Available for Sale Cost of Goods Sold O Gross Profit Loss Ending Merchandise Inventory ONet Cost of Purchases O Net Sales Revenue (7) O Gross Profit Less: Ending Merchandise Inventory Net Cost of Purchases O Net Sales Revenue Operating Expenses Total Expenses Beginning Merchandise Inventory O Cost of Goods Available for Sale Cost of Goods Sold Operating Expenses Total Expenses (8) O O Beginning Merchandise Inventory Cost of Goods Available for Sale Cost of Goods Sold Gross Profit O Less: Ending Merchandise Inventory ONet Cost of Purchases Net Sales Revenue company comprende 4. Steel Mall began August with 65 units of iron inventory that cost $30 each. During August following inventory transactions Click the icon to view the transactions.) Read the requirements Requirement 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Unit Total Cost of Goods Sold Unit Total Quantity Cost Cost Inventory on Hand Unit Total Quantity Cost Cost Date Quantity y Cost Cost Totals Requirement 2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Unit Total Cost of Goods Sold Units Total Quantity Cost Cost Inventory on Hand Unit Total Quantity Cost Cost Date Quantity Cost Cost Aug. Totals Requirement 3. Prepare a perpetual inventory record for the merchandise inventory using the weighted-average inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. Purchases Cost of Goods Sold Inventory on Hand Unit Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Aug Totals Requirement 4. Determine the company's cost of goods sold for August using FIFO.LIFO, and weighted average inventory costing methods. The cost of goods sold amount for August using FIFO inventory costing is $ . The cost of goods sold amount for August using LIFO inventory costing is s The cost of goods sold amount for August using weighted-average inventory costing is $ Requirement 5. Compute gross profit for August using FIFO.LIFO, and weighted-average inventory costing methods. Sales Revenue - Cost of Goods Sold - Gross profit FIFO LIFO Weighted average 4. Steel Mill began August with 65 units of iron inventory that cost $30 each. During August, the company completed the following inventory transactions: Click the icon to view the transactions.) Read the requirements Requirement 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Unit Cost Total Cost Total Cost of Goods Sold Unit Total Quantity Cost Cost Inventory on Hand Unit Quantity Cost Date Quantity Aug. 11 Totals Requirement 2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Inventory on Hand Purchases Unit Cost Cost of Goods Sold Units Total Quantity Cost Cost Total Cost Total Unit Cost Quantity Cost Date Quantity Aug. 11 Totals Requirement 3. Prepare a perpetual inventory record for the merchandise inventory using the weighted-average inventory costing method Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. Purchases Unit Cost Total Cost Cost of Goods Sold Unit Total Quantity Cost Cost Inventory on Hand Unit Total Quantity Cost Cost Quantity Date Aug. 1 Totals Requirement 4. Determine the company's cost of goods sold for August using FIFO, LIFO, and weighted average inventory costing methods. The cost of goods sold amount for August using FIFO inventory costing is $ The cost of goods sold amount for August using LIFO inventory costing is $ L The cost of goods sold amount for August using weighted average inventory costing is $ Requirement 5. Compute gross profit for August using FIFO, LIFO, and weighted-average inventory costing methods. Sales Revenue - Cost of Goods Sold - Gross profit FIFO LIFO Weighted-average Requirement 6. If the business wanted to maximize gross profit, which method would it select? If the business wanted to maximize gross profit, it would select the (1) method 6: Data Table Units Unit Cost Unit Sales Price 81 B5 $ 50 Aug. 3 Sale 8 Purchase 21 Sale 30 Purchase 75 7: Requirements 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. 2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method. 3. Prepare a perpetual inventory record for the merchandise inventory using the weighted average inventory costing method. 4. Determine the company's cost of goods sold for August using FIFO, LIFO, and weighted average inventory costing methods. 5. Compute gross profit for August using FIFO, LIFO, and weighted-average inventory costing methods 6. If the business wanted to maximize gross profit, which method would it select? (1) O FIFO OLIFO weighted average (3) O Other Expense No Entry Required Purchase Disrunte 10/12/2019 Chapter 6 Homework-Nickisha Lue 5. Some of L and K Electronics's merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $20,000 below the business's cost of the goods, which was $105 000. Before any adjustments at the end of the period, the company's Cost of Goods Sold account has a balance of $370.000 Read the requirements Requirement 1. Journalize any required entries (Record debits first, then credits. Select the explanation on the last line of the journal entry table. 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.) The required journal entry would be Date Accounts and Explanation Debit Credit Dec. 31 Requirement 2. At what amount should the company report merchandise inventory on the balance sheet? L and K should report merchandise inventory on the balance sheet at $ Requirement 3. At what amount should the company report cost of goods sold on the income statement? L and K should report cost of goods sold on the income statement at $ Requirement 4. Which accounting principle or concept is most relevant to this situation? directs (6) _ is the reason to account for merchandise inventory at (7) accountants to decrease the accounting value of an asset it appears unrealistically high 8: Requirements 1. Journalize any required entries. 2. At what amount should the company report merchandise inventory on the balance sheet? 3. At what amount should the company report cost of goods sold on the income statement? 4. Which accounting principle or concept is most relevant to this situation? (1) O No Entry Required O Cost of Goods Sold Merchandise Inventory O Other Expense O Purchase Discounts Sales Revenue Supplies (2) O No Entry Required Cost of Goods Sold Merchandise Inventory Other Expense Purchase Discounts Sales Revenue Supplies

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