Gross Margin • Gross Margin percentage of Sales • Income Before Taxes • Income Tax Expense • Pre-tax return on sales‚ and pre-tax return on assets Using LIFO vs. FIFO affects the ability to directly compare results because of the impact on gross margin and profit. Assuming merchandise costs are rising over time‚ accounting under LIFO will understate the net income (profit) for the current period by assigning the revenue to the highest cost merchandise. Assuming two companies had similar
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IAS 2 Inventories This version includes amendments resulting from new and amended IFRSs issued up to 31 March 2004. The section “Changes in this Edition” at the front of this volume provides the application dates of these new and amended IFRSs and also identifies those current IFRSs that are not included in this volume. International Accounting Standard 2 Inventories (IAS 2) is set out in paragraphs 1-42 and the Appendix. All the paragraphs have equal authority but retain the IASC format of the
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Accounting 350‚ Fall 2009 Quiz‚ Chpts 7‚8 & 9 – Night Class |1. |Kaniper Company has the following items at year-end: | | |Cash in bank | | |$20‚000 | |
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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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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 inventory? a. $800 b. $832 c. $848 d. $868 ACCT220 Fun Quiz Six Chapter Six Continued: Page 3 of 4 7. _____ Eneri Company’s inventory records show the following data: Units Unit Cost Inventory‚ January
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numbers. a. Whole Foods Market values their inventories at the lower of cost or market. They use the last-in‚ first-out (“LIFO”) method to determine the cost. It was used for approximately 93.6% and 94.0% of inventories in fiscal years 2009 and 2008‚ respectively. b. Cost of sales for the year under FIFO would have been: * COGS (FIFO) = COGS (LIFO) – change in LIFO reserve 5‚277‚310 – (27‚100‚000 – 32‚700‚000) 5‚277‚310 + 5‚600‚000 COGS (FIFO) = 10‚877‚310 c. Inventory Turnover
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ACCT 340 – Fall 2013 Exam 2 Review Problems: Chapters 5‚7‚8‚9 Chapter 5: 1. On February 1‚ 2007‚ Nance Contractors agreed to construct a building at a contract price of $6‚000‚000. Nance estimated total construction costs would be $4‚000‚000 and the project would be finished in 2009. Information relating to the costs and billings for this contract is as follows: 2007 2008 2009 Costs incurred in current year $1‚500‚000 $1‚140‚000 $1‚960‚000 Estimated costs to complete 2
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Executive Summary Latina Bella grew 151% in last year to $800‚000 in revenue‚ and still has more demand than it can fill. The Company requires capital to fuel unmet demand for its line of Hispanic cosmetics. Latina Bella was designed as a solution to the growing need for an ethnic cosmetics line. Novus Beauty‚ dba Latina Bella‚ developed innovative cosmetics tailored specifically to Hispanic women. Keeping in mind that their color shade requires special base formulations‚ and their culture desires
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Merchandise Inventory 1‚000 Cr Accounts Payable 1‚000 • 1/25/20X3 Sales on Account: 300 units @ $8.50 = $2‚550 Dr Accounts Receivable 2‚550 Cr Sales 2‚550 Dr Cost of Goods Sold 1‚300 (200 x $4) + (100 x $5) Dr Merchandise Inventory 1‚300 LIFO • 1/2/20X3 Purchases on account: 500 units @ $6 = $3‚000 Dr Merchandis Inventory 2‚000 Cr Accounts Payable 2‚000 • 1/15/20X3 Sales on account: 300 units @ $8.50 = $2‚550 Dr Accounts Receivable 2‚550 Cr Sales 2‚550 Dr Cost of Goods Sold 1‚200
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Home Work 1. In 2005 IBM had a return on equity of 26.7 percent‚ whereas Hewlett-Packard’s return was only 6.4 percent. Use the decomposed ROI framework to provide possible reasons for this difference based on the data below: IBM HP NOPAT/Sales 9.0% 2.7% Sales/Net Assets 2.16 2.73 Effective After-Tax Interest Rate 2.4% 1.1% Net Financial Leverage 0.42 -0.16 Answer: IBM Analysis Return on Operation Asset = NOPAT/sales * Sales/net assets = 9
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