Fifo to lifo questions

Assignment Help Accounting Basics
Reference no: EM13113363

Question 1.      Iowa Steakhouse opened a new restaurant on the site of an existing building. It paid the owner $520,000 for the land and building, of which it attributes $104,000 to the land and $416,000 to the building. Iowa incurred legal costs of $25,200 to conduct a title search and prepare the necessary legal documents for the purchase. It then paid $71,800 to renovate the building to make it suitable for Iowa's use. Property and liability insurance on the land and building for the first year was $24,000, of which $8,000 applied to the period during renovation and $16,000 applied to the period after opening. Property taxes on the land and building for the first year totaled $30,000, of which $10,000 applied to the period during renovation and $20,000 applied to the period after opening. Calculate the amounts that Iowa Steakhouse should include in the Land account and in the Building account.

Question 2.      Sears reports in millions of dollars on its balance sheet for year-end Year 6 and Year 5 as follows:

 

Year 6 

Year 5 

Credit Card Receivables

27,371 

24,932 

Less: Allowance for Uncollectibles

(821)

(808)

It reports charge-offs [synonym for write-offs] of accounts receivable during Year 6 of 4.5 percent of its average gross receivables of $26,000 million and that Bad Debt Expense is 3.5 percent of credit card sales. What were Sears' credit card sales for Year 6? (6 points)

Question 3.      For the following six items, assume that Talbot Company, a growing profitable company, has large and growing inventories. Assume that Talbot Company has been using a FIFO cost flow assumption and plans to switch to LIFO for both financial reporting and tax reporting. Assume that Talbot pays all income taxes currently, as accrued, in cash.

 

Required:

Fill in each of the blanks below with one of these: larger, smaller, unchanged, or insufficient (information given to answer question). Several years after the switch from FIFO to LIFO: 

1.

Working capital will be __________.

2.

Accounts payable will be __________.

3.

On the statement of cash flows, cash provided by operating activities will be ________.

4.

Total shareholders' equity will be __________.

5.

Deferred tax balance on the balance sheet will be __________.

6.

Inventory turnover will be __________.

Question 4.      Inventory flows for Toy Elmo Company for the month of January are as follows:

 

# of units

Unit cost

Beginning inventory*

250

$1.00

Purchases:

 

 

January 3

100

1.10

January 15

150

1.15

January 17

300

1.05

Sales:

 

 

January 5

200

 

January 18

100

 

January 24

150

 

 

*Assume the same for FIFO, LIFO, and weighted average cost flow assumptions.

 

Required:

Compute the cost of goods sold and ending inventory for the Toy Elmo Company using cost flow assumption and the following assumptions: 

 

a.

FIFO under a periodic inventory system

b.

LIFO under a periodic inventory system

c.

Weighted average under a periodic inventory system

d.

FIFO under a perpetual inventory system

e.

LIFO under a perpetual inventory system

f.

Weighted average under a perpetual inventory system

 

Reference no: EM13113363

Questions Cloud

Calculate the following variances : Calculate the following variances:  Direct manufacturing labor rate variance,  Direct manufacturing labor usage variance,  Direct materials price variance (how we did it in the chat session),  Direct materials usage variance
Journalize the entry to record the payroll for the week : Journalize the entry to record the payroll for the week of December 10. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
What will jackson’s cash collections from sales : Assume Jackson’s cash sales remain steady at $25,000 each quarter, credit sales are $600,000 in quarter 1, $520,000 in quarter 2, $480,000 in quarter 3, and $650,000 in quarter 4. What will Jackson’s cash collections from sales be for the quarter 3?
How responsibility centers are used for budgeting process : From your text and at least one scholarly source, research information on responsibility centers. Explain how responsibility centers are used for the budgeting process
Fifo to lifo questions : Fill in each of the blanks below with one of these: larger, smaller, unchanged, or insufficient (information given to answer question). Several years after the switch from FIFO to LIFO:
What is the annual lease payment : What was the interest rate used to value the lease? What is the annual lease payment? What was the present value of the lease obligation on January 1, Year 6?
Multiple choice questions : Accounting basics Multiple choice questions.  Make your selection by recording the letter in the answer box provided.
Prepare in journal form : Prepare in journal form, without explanations, the end of month adjusting entries for Flop's Copy Shop for the month of September. Prepare a partial adjusted trial balance for the accounts provided.
Prepare journal entries to record the following transactions : Prepare journal entries to record the following transactions entered, answer the questions in accounting basics.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Journalize the transactions and posting

Journalize the Transactions and Posting  them into ledger and Preparation of Trial Balance.

  Way to explain accounting to a non-accountant

What is the best way to explain accounting to a non-accountant? Analyze the importance of having a good understanding of accounting, and the implications of a lack of understanding have for business?

  Depreciation deductions-accelerated depreciation

In November 2011, Kendall purchases a computer for $4,000. She does not use Sec. 179. She only uses the most accelerated depreciation method possible.

  Computing break-even point and after-tax target profit

Jo Manufacturing Company provides the following data from 2011: 20,000 units were sold for $60 each; total variable expenses were 900,000 and total fixed expenses were $240,000. Jo's income tax rate is 30%.

  Irregular items-horizontal analysis

What are examples of irregular items? How does a change in accounting principles affect the financial statements? Who in the company is responsible for the application of a change in an accounting principle? Why?

  Cash basis-accrual basis of accounting

What is the difference between the cash basis of accounting and the accrual basis of accounting? Which one would you select for a company that has inventory and why?

  Budgeted volume-standard volume-overhead rate

Printers Inc. manufactures and sells a mid-volume color printer (MC) and a high-volume color printer (HC). Each MC requires 100 direct labor hours to manufacture, and each HC requires 150 direct labor hours.

  Determine the quantity of spoiled units

Explain the product and the production process. Describe how you would find out the quantity of spoiled units that are normal versus abnormal. Explain how you would determine the cost of good units, normal spoilage and abnormal spoilage.

  Fasb codification research system

What is the specific citation that provides guidance for determining whether an arrangement involving the sale of inventory is in substance a financing arrangement?

  Bond issuance journal entry

On January 1, 2010, Kentwood Company issued bonds with a face value of $800,000. The bonds carry a stated interest of 7% payable each January 1 and July 1. Prepare the journal entry for the issuance assuming the bonds are issued at 97.

  Journal entries of garg employment agency

On December 31, the adjusted trial balance of Garg Employment Agency shows the following selected data. Prepare the closing entries for the temporary accounts at December 31.

  Health maintenance organization

What would the PMPM cost of the HMO be? What would have to be charged to the patient/employer if the HMO had administrative costs equaling 10 percent of its costs and it wanted a profit margin of 7 percent?

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