would be: dr. Cost of Goods Sold cr. Merchandise inventory. 3) LIFO Method An example of an industry that uses LIFO is the mining industries. Assuming they have a pit‚ they are filling it up with coal they dig up. The first coal they sell will be from the top (last coal put in the pit)‚ and last one sold will be the ones in the bottom (first coal put in the pit)‚ therefore LIFO. There are many other industries with a similar setting where the last one put in would be
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Case Questions: Sears‚ Roebuck and Co. vs. Wal-Mart Stores‚ Inc. Answers must be posted to Compass. You may work in groups of no more than four people. Be sure to remember to submit ALL names and UINs on the assignment. 1. How do the retailing strategies of Sears and Wal-Mart differ? How does each firm operate their business/attempt to create value? The major difference in these two companies’ retailing strategies‚ according to their filings in 2014‚ lies in the ways they expand their sales
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Ch18 Revenue Recognition (when it is realized or realizable‚ when it is earned) Revenue Recognition at point of sale: (1) Sales with Discounts (2) Sales with Right of Return: Three alternative revenue recognition methods‚ and recognize revenue only if all of six condition (3) Sales with buybacks (4) Bill and Hold Sales: buyer is not yet ready to take delivery but does take title and accept billing. Revenue is reported at the time title passes if (a) the risks of ownership have passed; (b) the
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1.When a specific account receivable is written off‚ the entry A) increases net income. B) decreases net income. C) can either decrease or increase net income. D) has no effect on net income.2.Echo Company’s 2011 beginning and ending accounts receivable balances were $72‚500 and $41‚250 respectively. During 2011‚ the company’s sales (all on credit) amounted to $857‚250. Per Echo’s 2011 cash flow statement‚ $873‚500 was collected from customers while $18‚750 related to uncollectible accounts was
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on hand. If the company uses FIFO‚ what is the value of the ending inventory? a. $800 b. $832 c. $848 d. $868 6. _____ Effie Company uses a periodic inventory system. Details for the inventory account for the month of January‚ 2014 are as follows: Units Per unit price Total Balance‚ 1/1/14 200 $5.00 $1‚000 Purchase‚ 1/15/14 100 5.30 530 Purchase‚ 1/28/14 100 5.50 550 An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses LIFO‚ what is the value of the ending
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COMPREHENSIVE PROBLEM (Chapters 6‚ 7‚ and 8) Case A Req. 1 (in millions) Allowance for uncollectible accounts (XA‚ +A) 1 ............. Accounts receivable (A)............................................ Req. 2 Cash collections for 2008 2 were $5‚711 million. Allowance for Uncollectible Accounts 20 Beg. 5 Bad debt Write-offs ? expense 13 End. 12 12 Accounts Receivable Beg. 558 Sales 5‚710 ? Collections ? Write-offs End. 545 - = Net Realizable Value 538 532 1 Beg. allowance
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Reserve for possible losses on purchase commitments d. Excess of replacement cost over LIFO cost of basic inventory temporarily liquidated Answer d 5. Which of the following statements is not valid as it applies to inventory costing methods? a. If inventory quantities are to be maintained‚ part of the earnings must be invested (plowed back) in inventories when FIFO is used during a period of rising prices. b. LIFO tends to smooth out the net income pattern‚ since it matches current cost of goods
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1.0 Introduction Ryan C. Fuhrmann explains that an investing activity usually refers to cash spent on investments in capital assets such as plant and equipment‚ which is collectively referred to as capital expenditure‚ or capex Its mean that investing activities refer to Assets are resources controlled by company for the purposed of generating profit. The assets can classified into two (2) types- current and noncurrent: (1) Current asset (short term) is resources or claims to resources (balance
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Standards Based Decision Making Team C June 24‚ 2012 ETH 376 Professor Standards Based Decision Making Green and Associates is the CPA firm retained by the ABC Corporation to handle their external auditing duties. The auditing team at Green and Associates took time to review aspects of ABC’s finances and had some questions regarding their client’s monthly statements that made them a little uneasy. Items such as their inventory valuation methods not to mention‚ Green’s new
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THE UNIVERSITY OF HONG KONG School of Economics and Finance FINA1001: Financial Statement Analysis Second Semester 2009-2010 Dr. Kam-Ming Wan Midterm Examination (90 minutes) April 1‚ 2010 10:40a.m.(12:10p.m. Candidates may use any self-contained‚ silent‚ battery-operated and pocket-sized calculator. The calculator should have numeral-display facilities only and should be used only for the purposes of calculation. It is the candidate’s responsibility to ensure
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