Accounting questions
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, ZOY1, Fonda incorrectly counted its inventory as $284,150 instead of the correct amount of $272,780. Enter all amounts as positive numbers. a. State the effects of the error on the December 31, 20Y1, balance sheet of Fonda Motorcycle Shop. Balance Sheet Items Overstated/understated Amount Inventory V Current Assets \"\" UUUU Total Assets ({4 Stockholders' Equlty b. State the effects of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 20Y1. Income Statement Items Overstated/understated Amount Cost of Goods Sold V Gross Prot V Net Income V $ c. If uncorrected, what would be the effects of the error on the 20Y2 income statement? Income Statement Items understated/Overstated Amount Cost of Goods Sold V $ Gross Prot V a Net Income V $ Inventory Current Assets was UUUU Total Assets 4444 Stockholders' Equity b. State the effects of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 20Y1. Income Statement Items Overstated/understated Amount Cost of Goods Sold V Gross Prot V $ Net Income ' 3: c. If uncorrected, what would be the effects of the error on the 20Y2 income statement? l Income Statement Items understated/Overstated Amount Cost of Goods Sold V $3 Gross Prot V :] Net Income V $3 d. If uncorrected, what would be the effects of the error on the December 31, 20Y2, balance sheet? 1. The December 31, 20Y2, balance sheet would be correct, since the 20Y1 inventory error reverses itself in 20Y2. 2. In the December 31, 20Y2, balance sheet, inventory would be understated. 3. In the December 31, 20Y2, balance sheet, Inventory would be overstated. 4. In the December 31, 20Y2, balance sheet, retained eamlngs would be understated. v Periodic inventory by three methods The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown below: Number Date Transaction of Units Per Unit Total Jan. 1 Inventory 7,500 $75.00 $562,500 10 Purchase 22,500 85.00 1,912,500 28 Sale 11,250 150.00 1,687,500 30 Sale 3,750 150.00 562,500 Feb. 5 Sale 1,500 150.00 225,000 10 Purchase 54,000 87.50 4,725,000 16 Sale 27,000 160.00 4,320,000 28 Sale 25,500 160.00 4,080,000 Mar. 5 Purchase 45,000 89.50 4,027,500 14 Sale 30,000 160.00 4,800,000 25 Purchase 7,500 90.00 675,000 30 Sale 26,250 160.00 4,200,000 1. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the rst-in, rst-out method and the periodic inventory system. Inventory, March 31 5: Cost of goods sold $:] 2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, rst-out method and the periodic inventory system. 14 Sale 30,000 160.00 4,800,000 25 Purchase 7,500 90.00 675,000 30 Sale 26,250 160.00 4,200,000 1. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the rst-in, rst-out method and the periodic inventory system. Inventory, March 31 5 Cost of goods sold $ 2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, rst-out method and the periodic inventory system. Inventory, March 31 $ Cost of goods sold $ 3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted avemge cost method and the periodic inventory system. Round the weighted average unit cost to the nearest cent. Inventory, March 31 5 Cost of goods sold $ 4. Compare the gross prot and the March 31 inventories, using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales Cost of goods sold Gross prot Inventory, March 31 $
