12. Yorkins Inc. was organized on January 1, 2012. On December 31, 2013, the company lost most of its inventory in a warehouse fire just before the year end count of inventory. Data from records is disclosed below:

12/31/12 12/31/113

Beginning Inventory $ 0 $ 60,000

Purchases 300,000 400,000

Purchases returns & allowances 12,000 18,000

Sales 305,714 495,000

Sales returns & allowances 2,000 4,000

On January 1, 2013, the companys pricing policy was changed so that the gross profit

rate would increase by 3%. Salvaged undamaged merchandise was marked to sell at

$ 35,000 while damaged merchandise marked to sell at $ 30,000 had an estimated value

of $ 8,000.

Determine the companys inventory loss using gross profit method.

13. Calculate what the correct net income should have been using both the long and short methods to correct inventory errors and the following information.

.

2010 2011 2012 2013

Incorrect net income 32,000 46,000 (20,000) 40,000

Ending inventory understated 8,000 5,000 9,000

Ending inventory overstated 12,000

14. The Wonder Inc manufactures a single product. On December 31, 2009, the company

adopted the dollar value lifo method. The inventory method that date was based on

$ 210,000. Other inventory data follows:

Year-end date Year-end inventory Price Index

12/31/10 240,000 1.04

12/31/11 260,000 1.05

12/31/12 248,000 1.07

12/31/13 238,000 1.03

Provide an excel worksheet using the dollar value method for the above information.

15. The Springbreak Company uses the retail inventory method. Information

relating to the computation of the inventory at December 31, 2013 follows:

Freight In 9,000

Sales 268,800

Net markups 22,000

Net markdowns 30,000

Sales discounts 24,000

Sales returns 36,000

Purchases discounts 42,000

Cost Retail

Beginning Inventory 50,000 80,000

Purchases $ 240,000 $ 396,000

Complete using lower the cost or market retail method.

Complete using the average cost method.

16. Gross method and Net Method of recording purchases and making invoice

payments.

Baker Inc purchased goods from Hershey Inc. on February 10, 2013 costing

$ 46,000 with the following terms: Cash Discount of 3/10, n30.

Record the purchase and payment entry under gross method assuming they

paid on February 15, 2013.

Record the purchase and payment entry under net method assuming they

paid on February 15, 2013.

Record the payment entry for both gross and net method if they paid on

February 25, 2013.

12. Yorkins Inc. was organized on January 1, 2012. On December 31, 2013, the company lost most of its inventory in a warehouse fire just before the year end count of inventory. Data from records is disclosed below: 12/31/12 Beginning Inventory $ 0 Purchases 300,000 Purchases returns & allowances 12,000 Sales 305,714 Sales returns & allowances 2,000 12/31/113 $ 60,000 400,000 18,000 495,000 4,000 On January 1, 2013, the company's pricing policy was changed so that the gross profit rate would increase by 3%. Salvaged undamaged merchandise was marked to sell at $ 35,000 while damaged merchandise marked to sell at $ 30,000 had an estimated value of $ 8,000. Determine the company's inventory loss using gross profit method. 13. Calculate what the correct net income should have been using both the long and short methods to correct inventory errors and the following information. . 2010 2011 2012 2013 Incorrect net income 32,000 46,000 (20,000) 40,000 Ending inventory understated 8,000 Ending inventory overstated 5,000 9,000 12,000 14. The Wonder Inc manufactures a single product. On December 31, 2009, the company adopted the dollar value lifo method. The inventory method that date was based on $ 210,000. Other inventory data follows: Year-end date 12/31/10 12/31/11 12/31/12 12/31/13 Year-end inventory 240,000 260,000 248,000 238,000 Price Index 1.04 1.05 1.07 1.03 Provide an excel worksheet using the dollar value method for the above information. 15. The Springbreak Company uses the retail inventory method. Information relating to the computation of the inventory at December 31, 2013 follows: Freight In Sales Net markups Net markdowns Sales discounts Sales returns Purchases discounts Beginning Inventory Purchases 9,000 268,800 22,000 30,000 24,000 36,000 42,000 Cost 50,000 $ 240,000 Retail 80,000 $ 396,000 a. Complete using lower the cost or market retail method. b. Complete using the average cost method. 16. Gross method and Net Method of recording purchases and making invoice payments. Baker Inc purchased goods from Hershey Inc. on February 10, 2013 costing $ 46,000 with the following terms: Cash Discount of 3/10, n30. a. Record the purchase and payment entry under gross method assuming they paid on February 15, 2013. b. Record the purchase and payment entry under net method assuming they paid on February 15, 2013. c. Record the payment entry for both gross and net method if they paid on February 25, 2013