The three methods are used but I believe the best to use would be FIFO method. This gives companies the most true statement of what the cost of goods were in a period. Following GAAP and reporting financial statements using the same inventory method help create strong financial opinion. Having a decrease in inventory
Premium Lease Finance lease Finance
E5-11 a) Compute Payton’s gross profit. GROSS PROFIT = 900‚00 - 540‚000 = $ 360‚000 ______________________________________ b) Compute the gross profit rate. Why is this rate computed by financial statement users? (360‚000/900‚000)/100 = 4/10of 100 = 40% This is known as the GROSS PROFIT MARGIN. ______________________________________ c) What is Payton’s income from operations and net income? 1)Income from Operations = 360‚000 - 230‚000 = $130‚000. 2)Net Income = 130‚000 - 11‚000
Premium Inventory Revenue Generally Accepted Accounting Principles
diluted (the denominator used in calculating diluted earnings per share) in 2008? a. 2‚329 thousand b. 293‚479 thousand c. 295‚808 thousand d. 589‚287 thousand e. None of the above 3. Companies using FIFO are required to disclose what their inventory would have been if the company had used LIFO. Please indicate if the above statement is true of false. a. true b. false 4. The 2008 financial statements of Walgreen’s reported the following information (in millions). Walgreen’s Co. | 2008 |
Premium Inventory Balance sheet Depreciation
ACCT 2300 Final Exam Review Sheet 1. Chapter 1 a. Types of businesses b. Purpose of accounting & Primary users of information c. Purpose of Financial Statements d. Conceptual Framework 2. Chapter 2 a. Objectives of Financial Reporting b. Financial Statements – Know how to calculate each and all the parts in them b.i. Income Statement – Single and Multi-Step Net Sales - COGS Gross Profit Operating Expenses: - General and Administrative Expenses - Selling Expenses
Premium Generally Accepted Accounting Principles
ACCT TEST 1. Which of the following is NOT a characteristic of a corporation? a. Corporations are organized as a separate legal taxable entity. b. Ownership is divided into shares of stock. c. Corporations experience an ease in obtaining large amounts of resources by issuing stock. d. A corporation’s resources are limited to its individual owners’ resources. e. Corporations make up 20% of all businesses. 2. An entity that is organized according to state or federal statutes
Premium Balance sheet Inventory Generally Accepted Accounting Principles
WINDOW DRESSING Window dressing is presenting company accounts in a manner which enhances the financial position of the company. It is a form of creative accounting involving the manipulation of figures to flatter the financial position of the business. It is also defined as: ‘A form of accounting‚ which while complying with all the regulations‚ nevertheless‚ gives a biased impression of the company’s performance.’ Though it is not illegal‚ it is considered by many financial pundits asunethical
Premium Balance sheet Asset Revenue
A figure of cost of goods sold reflecting the cost of the product or good that a company sells to generate revenue‚ appearing on the income statement‚ as an expense. Also‚ referred to as "cost of sales". It is essentially a cost of doing business‚ such as the amount paid to purchase raw materials in order to manufacture them into finished goods. For example‚ if a $10 widget costs $6 to make‚ then the cost of goods sold is $6 per widget. That is‚ the cost of goods sold is equal to the beginning
Premium Inventory
Then we can compare the performance of these two companies in 2013 (as shown below). However‚ we cannot get find enough information to make a comprehensive adjustment on 2012 data (in particular‚ we don’t have the estimation on 2011 inventory using FIFO method). As a result‚ we cannot calculate the growth rate of EPS precisely here. 2.) Assess the financial performance of Nuware versus R.P. Stuart. Nuware and R.P. Stuart are in the same industry and share virtually identical business model
Premium Financial ratios Generally Accepted Accounting Principles Revenue
Contents Page Introduction………….……………………………… 1 Discussion Part (A)….……………………….………2/ Discussion Part (B)…...………………….……….......... Conclusion....................................................................... Bibliography.................................................................... Appendices....................................................................... Introduction According to the Chartered Institute of Management Accountants (CIMA)
Premium Management accounting Costs Variable cost
CHAPTER 1 INTRODUCTION THE PROBLEM AND ITS SCOPE Rationale Zipkin (2000)‚ states that every one of us deals with dozens of inventories daily without thinking too hard about them. At home‚ we stock supplies of foods‚ drinks‚ soap‚ and many other items‚ because they make life easier than it would be otherwise. During times of calamities when there is no electricity and gas for cooking‚ one’s stock of canned goods and other ready to eat foods are of great help. Olivario (1998) said that
Free FIFO and LIFO accounting Inventory Procurement