Direct reduction of purchase cost

Assignment Help Accounting Basics
Reference no: EM131114420

1. Accounting Treatment of Purchase Discounts Shawnee Corp., a household appliances dealer, purchases its inventories from various suppliers. Shawnee has consistently stated its inventories at the lower of cost (FIFO) or market. Shawnee is considering alternate methods of accounting for the cash discounts it takes when paying its suppliers promptly. From a theoretical standpoint, discuss the acceptability of each of the following methods.

(a) Financial income when payments are made.

(b) Reduction of cost of goods sold for the period when payments are made.

(c) Direct reduction of purchase cost.(AICPA adapted) 

Reference no: EM131114420

Questions Cloud

The article stated that the firms were switching to lifo : Explain to Ms. Yoakam the conditions that must exist for Estefan Co. to receive tax benefits from a switch to the LIFO method.
Determine how much annual after tax profits : The transfer price per unit is currently $2,000, but it can be set at any level between $2,000 and $2,400. Derive A formula to determine the effective marginal tax rate for Affiliate B, and A formula to determine how much annual after-tax profits can..
Calculate the increase in annual after tax profits : Affiliate X sells 10,000 units to Affiliate Y per year. The marginal tax rates for X and Y are 20 percent and 30 percent, respectively. The transfer price per unit is currently set at $1,000, but it can be set as high as $1,250. Calculate the increas..
Do not discuss procedures for computing inventory cost : Discuss the ways and conditions under which the FIFO and LIFO inventory costing methods produce different inventory valuations. Do not discuss procedures for computing inventory cost.(AICPA adapted)
Direct reduction of purchase cost : Reduction of cost of goods sold for the period when payments are made.
Inventoriable costs george solti the controller : A certain portion of a company's "inventory" is composed of obsolete items. Should obsolete items that are not currently consumed in the production of "goods or services to be available for sale" be classified as part of inventory?
Show the value added at each stage in the production : Fill in the following table to show the value added at each stage in the production process and the incremental and total VAT. The Norwegian VAT rate is 25percent.
What are products on consignment : If Strider Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?
Does your client have a liability that should be recorded : Prepare journal entries, if required, to reflect any accounting adjustment required. Assume a perpetual inventory system is used by your client.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Explain how the internet has aided criminal activity

The rapid growth of technology has aided Criminal activity in many ways. The internet allows communication between individuals without having to be near one another. It helps aide persons with interest of taking major companies under attack. With ..

  Question about mergers and acquisitions

The question belongs to Accounting and it discusses about a multiple choice question about mergers and acquisitions

  There are many inventory items past experience has shown

there are many inventory items. past experience has shown numerous errors both understatements and overstatements in

  Determine whether a company has an ethical obligation

Determine whether a company has an ethical obligation to share with external clients that key information about them is being stored in the cloud. Speculate how external clients would react if they were told in advance or it was kept from them and..

  Maximum regular cost recovery deduction

Omar acquires used 7-year personal property for $100,000 to use in his business in February 2010. Omar does not elect §179 expensing or additional first-year depreciation, but does take the maximum regular cost recovery deduction. As a result, Oma..

  Determine the cost of goods available for sale

Determine the ending inventory and the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (Round average unit cost to three deci..

  What is the firms net working capital using market values

the company had cash and marketable securities worth 1235455 accounts payables worth 4159357 inventory of 7121599

  Would you recommend that your company comply with the

in 2010 colorado became the first state to require nondomiciliary businesses without sales tax nexus to report all the

  If the production of 2000 units which were selling at 40

if the production of 2000 units which were selling at 40 possessing the variable cost 24 and fixed cost 20000.

  If you were to get a physical from your doctor and he or

if you were to get a physical from your doctor and he or she ony took your blood pressure prior to stating that you are

  Difference the direct and indirect presentation of cash flow

differences between the direct and indirect presentation of cash flows

  When computing the amount of tax to be withheld from an

when computing the amount of tax to be withheld from an employees salary can tax credits under the ordinance to which

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd