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
The real risk-free rate is 3%. Inflation is usual to be 3% this year, 4% next year, and then 5% afterthat. The maturity risk premium is estimated to be 0.0007 x (t - 1), where t =

a company is evaluating a project requiring capital expenditure of 620,000. estimated life of project is four years and no salvage value. estimated net income and net cash flow fro

redemption of debentures by sinking fund method

Efficiency Ratios - These ratios include Receivables Turnover, Inventory Turnover, Asset Turnover and Net Working Capital Turnover ratios. Efficiency ratios demonstrate the utili

The functional currency method (formerly temporal method) Under this method, the branch is considered to be an extension of the head office and this is reflected by the trading

Q. What is Contractor Ledger? Accounts relating to contractors should be kept as personal accounts in contractor's ledger and a separate folio should be opened in the Contracto

GHH, Inc. has two classes of stock authorized: $100,000 par preferred and $1.00 par value common. As the begining of 20C, 200 shares of preffered stock and 300,000 shares of common

The following items are found in the trial balance of M/s Sharada Enterprise on 31st December, 2000. 10 marks Summer 2013 Sundry Debtors Rs.160000 Bad Debts written off Rs 9000 Dis

Since 1968, Dracula Limited has traded in Doncaster, South Yorkshire as a manufacturer of fancy-dress and theatrical costumes. It produces a wide range of general theatrical costum

I need help with my homework