What should be the carrying value of Sullivan’s inventory if the company prepares its financial statements according to International Financial Reporting Standards?
| Cinnamon Buns Co. (CBC) started 2011 with $52,000 of merchandise on hand. During 2011, $280,000 in merchandise was purchased on account with credit terms of 2/10 n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system.
Assuming CBC uses the gross method to record purchases, ending inventory would be |
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18. The following information pertains to Jacobsen Co.’s accounts receivable at December 31, 2011:
During 2011, Jacobsen wrote off $18,000 in receivables and recovered $6,000 that had been written off in prior years. Jacobsen’s December 31, 2010, allowance for uncollectible accounts was $40,000. Under the aging method, what amount of allowance for uncollectible accounts should Jacobsen report at December 31, 2011? |
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19. Sullivan Corporation has determined its year-end inventory on a FIFO basis to be $500,000. Information pertaining to that inventory is as follows:
What should be the carrying value of Sullivan’s inventory if the company prepares its financial statements according to International Financial Reporting Standards? |
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| 20. Cinnamon Buns Co. (CBC) started 2011 with $52,000 of merchandise on hand. During 2011, $280,000 in merchandise was purchased on account with credit terms of 2/10 n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system.
What is cost of goods available for sale, assuming CBC uses the gross method? |
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| 21. Northwest Fur Co. started 2011 with $94,000 of merchandise inventory on hand. During 2011, $400,000 in merchandise was purchased on account with credit terms of 1/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $7,500. Merchandise with an invoice amount of $5,000 was returned for credit. Cost of goods sold for the year was $380,000. Northwest uses a perpetual inventory system.
What is ending inventory assuming Northwest uses the gross method to record purchases? |
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22. Nu Company reported the following pretax data for its first year of operations.
What is Nu’s net income if it elects FIFO? |
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23. Clarabell, Inc., uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
To the nearest thousand, estimated ending inventory using the conventional retail method is |
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24. Nueva Company reported the following pretax data for its first year of operations.
What is Nueva’s net income if it elects LIFO? |
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| 25. Bond Company adopted the dollar-value LIFO inventory method on January 1, 2011. In applying the LIFO method, Bond uses internal cost indexes and the multiple-pools approach. The following data were available for Inventory Pool No. 3 for the two years following the adoption of LIFO:
Under the dollar-value LIFO method the inventory at December 31, 2012, should be |
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