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
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

Sales volume reaches the maximum capacity of the new machine in Year 4. The positive NPV point to that the investment in Machine Two is financially acceptable althoug

Application of discharge Application may be made at any time after adjudication, but cannot be heard until the conclusion of the public examination. Notice of the hearing must

what is the different between prorfit and margin prorfi

Q. Define Risk-adjusted discount rates? One technique in this heading is the assignment of investment projects to one of a set of risk classes all of which has a different disc

ACCOUNTS UNDER TRUSTEE (a) Authorised investments The investments which trustees are permitted to hold may be specifically stated in the will or deed constituting the se

Question 1 The following information should be used for questions #1 through #7: Jersies, Inc financial statement data.   2009 2010

A new shopping mall is considering setting up an information desk staffed by one (1) employee. Based upon information obtained from similar information desks, it is believed that p

MarmadukeMuffett once had a girlfriend who ran an antiques business in London'sKings Road. Ever since then, he has been hooked on the furniture trade and now runsMarmaduke'sMarvell

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4