Business Finance Homework Help

I don’t understand this Accounting question and need help to study.

Q 1

QUESTION 1

On which financial statement would you look to find the total costs of merchandise that remains, and on which financial statement would you look to find the total that has flowed through a company’s accounting system?

Select one:

a. Statement of cash flows and balance sheet

b. Balance sheet and income statement

c. Statement of stockholders’ equity and balance sheet

d. Balance sheet and statement of cash flows

Q 2

QUESTION 2

Assuming rising prices, which method will give the highest dollar value for cost of goods sold on the income statement?

Select one:

a. FIFO

b. Average Cost

c. LIFO

d. All of these give equal values for cost of goods sold

Q 3

QUESTION 3

Which expense recognition system is used to recognize cost of goods sold?

Select one:

a. Direct association

b. Immediate recognition

c. Reserve association

d. Systematic allocation

Q 4

QUESTION 4

The following data refer to Brompton Company’s ending inventory: (see attachment)

What is the total ending inventory balance if the lower of cost or net realizable value rule is applied at the item code level (i.e., to each item of inventory separately)? Note: your answer should be formatted as a whole number without currency symbols or punctuation.

Q 5

QUESTION 5

Assuming sales hold steady, which of the following actions would result in lowering income taxes for a company that uses the LIFO inventory method?

Select one:

a. Buying extra inventory at the end of the year in an inflationary environment

b. Increasing sales prices

c. Allowing the inventory quantity at year end to fall below beginning year levels

d. None of these. All would cause increasing taxes

Q 6

QUESTION 6

If inventory at the end of the year is understated by $60,000, what will this error cause?

Select one:

a. An understatement of net income for the year by $60,000

b. An understatement of cost of goods sold for the year by $60,000

c. An overstatement of gross profit for the year by $60,000

d. An overstatement of inventory for the year by $60,000

Q 7

QUESTION 7

Leland Inc. has 20 units in beginning inventory costing $50 each. It purchased 80 more for $45 each during the month. The company sold 75 units during the month.

Calculate cost of goods sold for the month using FIFO. Note: your answer should be formatted as a whole number without currency symbols or punctuation.

Information

QUESTION FOR 8 AND 9

DVS is a national chain of drug stores. The following are excerpted from DVS’ 2021 financial statements (in millions). DVS has a June 30 year end. (see attachment)

DVS’s inventory footnote follows: Inventories are valued on a lower of last-in, first-out (LIFO) cost or market basis. At June 30, 2021 and 2020, inventories would have been greater by $2,500 million and $2,200 million, respectively, if they had been valued on a lower of first-in, first-out (FIFO) cost or market basis. Inventory includes product cost, inbound freight, warehousing costs and vendor allowances that are not included as a reduction of advertising expense.

Q8

What is the reported gross profit margin (under LIFO) for the year ending June 30, 2021? Note: your answer should be formatted as a percentage rounded to one decimal place (e.g., 40.2%).

Q9

Assuming DVS had followed FIFO, their Cost of Goods Sold for the fiscal year ending June 30, 2021 would have been $109,700. Calculate inventory turnover under FIFO for the fiscal year ending June 30, 2021. Note: your answer should be formatted as a number rounded to the nearest tenth without currency symbols or punctuation (e.g., 10.4).

Q 10

QUESTION 10

Dalon Company imports and sells a product produced in Denmark. In the summer of 2020, the producer’s plant was damaged by flooding, disrupting production and affecting Dalon’s supply of product. Dalon uses the LIFO inventory method. On January 1, 2021, Dalon’s inventory records were as follows: (see attachment)

Through mid-December of 2021, purchases were limited to 40,000 units, because the cost had increased to $100 per unit. Dalon sold 50,000 units during 2021, at a selling price of $200 per unit, which significantly depleted its inventory.

What would Dalon report in their footnotes for the dollar effect of the LIFO liquidation on gross profit for fiscal year ending December 31, 2021? In other words, how much higher is gross profit as a result of the LIFO liquidation? Note: your answer should be formatted as a whole number without currency symbols or punctuation.