Determine the lifo cost, Financial Accounting

Determine the LIFO cost

Toys "R" Us purchases inventory in crates of merchandise; each unit of inventory is a crate of toys. The fiscal year of Toys "R" Us ends each January 31. Assume you are dealing with a single Toys "R" Us store in San Antonio, Texas, and that the store experienced the following: The San Antonio store began fiscal year 2005 with an inventory of 20,000 units that cost a total of $1,200,000. During the year, the store purchased merchandise on account as follows:

April (30,000 units @ cost of $65)   ..................  $ 1,950,000

August (50,000 units @ cost of $65) .................   3,250,000

November (90,000 units @ cost of $70) ............   6,300,000

Total purchases ................................................  $11,500,000  

Cash payments on account totalled $11,390,000. During fiscal year 2005, the store sold 180,000 units of merchandise for $16,400,000, of which $5,300,000 was for cash and the balance was on account. Toys "R" Us uses the LIFO method for inventories. Operating expenses for the year were $4,000,000. The store paid 80% in cash and accrued the rest. The store accrued income tax at the rate of 40%.

Required

1. Make summary journal entries to record the store's transactions for the year ended January 31, 2005. Toys "R" Us uses a perpetual inventory system.

2. Determine the LIFO cost of the store's ending inventory at January 31, 2005. Use a T-account.

3. Prepare the stores income statement for the year ended January 31, 2005. Show totals for the gross profit, income before tax, and net income.

Posted Date: 2/15/2013 12:19:11 AM | Location : United States







Related Discussions:- Determine the lifo cost, Assignment Help, Ask Question on Determine the lifo cost, Get Answer, Expert's Help, Determine the lifo cost Discussions

Write discussion on Determine the lifo cost
Your posts are moderated
Related Questions
Igor and Angela were married in 2005, separated in 2011, and divorced recently. At the time of marriage, each had some investments and personal assets. They both worked during the

Assume that we are in December 2009 and try to make forecasts of the five year interest rate at the end of January 2010. For this question , you just need to fill out the blank s

INTER-COMPANY TRANSACTIONS AND BALANCES As the associate company is not consolidated, care should be taken when there are trading transactions and inter-company balances between

I would like you to take the second set of data from session 8 (the one you worked with in the first participation exercise) and do the following: 1.  Determine the number of gr

THE PETITION Petition by debtor : If the debtor presents his own petition, a receiving order is made at once without a court hearing and an adjudication order may also be ma

Read Appendix B, "Sample Brief Memorandum," that starts on page 193 of the textbook. In 2-3 pages (12 point font, double spaced), critique the memorandum based on what we've learne

Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company's profits are driven by the amount of work Tom does. If he works 40

Financials Investments, a group of financial advisors and retirement planners, has been requested to provide advice on how to invest $200,000 for one of its clients. The client has

Brazil Corporation was organized on January 1, 1999. It is authorized to issue 20,000 shares of 6%, $50 par value preferred stock, and 500,000 shares of common stock with a par val

Question 1: (a) "MTEF is about resource control, resource allocation and resource utilization." You are required to identify and discuss the different stages of MTEF. (N