Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1/ Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below: Cost Retail

1/ Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:

Cost Retail
Beginning inventory $ 48,000 $ 65,000
Net purchases 156,000 219,000
Net markups 20,000
Net markdowns 37,000
Net sales 222,000

The conventional cost-to-retail percentage (rounded) is:

Multiple Choice

  • 71.8%.

  • 84.3%.

  • 76.4%.

  • 67.1%.

2/As of December 31, 2018, Amy Jo's Appliances had unadjusted account balances in accounts receivable of $305,000 and $930 in the allowance for uncollectible accounts, following 2018 write-offs of $6,390 in bad debts. An analysis of Amy Jo's December 31, 2018, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2018 should be:

Multiple Choice

  • $6,390.

  • $6,100.

  • $5,170.

  • None of these answer choices are correct.

3/ Nu Company reported the following pretax data for its first year of operations.

Net sales 2,970
Cost of goods available for sale 2,380
Operating expenses 800
Effective tax rate 30 %
Ending inventories:
If LIFO is elected 940
If FIFO is elected 1,080

What is Nu's gross profit ratio if it elects LIFO? (Round your answer to the nearest whole percentage.)

Multiple Choice

  • 61%.

  • 21%.

  • 52%.

  • 56%.

4/ Bond Company adopted the dollar-value LIFO inventory method on January 1, 2018. 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:

Ending Inventory
Year At Current Cost At Base Year Cost Cost Index
1/1/2018 $ 306,000 $ 306,000 1.00
12/31/2018 339,560 326,500 1.04
12/31/2019 433,100 355,000 1.22

Under the dollar-value LIFO method, the inventory at December 31, 2019, should be

Multiple Choice

  • $362,090.

  • $355,000.

  • $355,820.

  • None of these answer choices are correct.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Harold M. Sollenberger, Arnold Schneider, Lane K. Anderson

9th Edition

0538842822, 978-0538842822

More Books

Students also viewed these Accounting questions

Question

What resources will these tactics require?

Answered: 1 week ago

Question

What level of impact will this tactic make on the key public?

Answered: 1 week ago

Question

Have you used powerful language in your message?

Answered: 1 week ago