Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Inventory Turnover and Number of Days' Sales in Inventory The following financial statement data for years ending December 31 for Gillisple Company are shown below.

image text in transcribed
image text in transcribed
image text in transcribed
Inventory Turnover and Number of Days' Sales in Inventory The following financial statement data for years ending December 31 for Gillisple Company are shown below. 2016 2015 Cost of merchandise sold $1,611,840 $1,002,655 Inventories: Beginning of year $287,620 $201,480 End of year 413,180 287,620 a. Determine the inventory turnover for 2016 and 2015. Round to one decimal place. Inventory Turnover 2016 2015 b. Determine the number of days' sales in inventory for 2016 and 2015. Assume 365 days a year. Round interim calculations and final answers to one decimal place. Number of Days' Sales in Inventory 2016 days days c. Does the change in inventory turnover and the number of days! Inventory from 2015 to 2016 indicate a favorable or an unfavorable trend? Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 40 units @ $126 Mar. 10 Purchase 50 units @ $136 Aug. 30 Purchase 30 units @ $142 Dec. 12 Purchase 80 units @ $148 There are 40 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar. Cost of Merchandise Inventory and cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold First-in, first-out (FIFO) Last-in, first-out (LIFO) Weighted average cost Effect of Errors in Physical Inventory Hydro White Water Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2014, Hydro White Water incorrectly counted its inventory as $719,680 instead of the correct amount of $741,270. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 2014, balance sheet of Hydro White Water Balance Sheet Items Understated/Overstated Amount Merchandise Inventory Current Assets Total Assets Owner's Equity b. State the effect of the error on the income statemer of Hydro White Water for the year ended December 31, 2014. Income Statement Items d/Understated Cost of Merchandise Sold Gross Profit Net Income c. If uncorrected, what would be the effect of the error on the 2015 income statement? Overstated / Understated Amount Income Statement Items Cost of Merchandise Sold Gross Profit Net Income Previous Next >

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

Auditing A Practical Approach with Data Analytics

Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton

1st edition

1119401747, 978-1119401742

More Books

Students also viewed these Accounting questions

Question

What are some of the innovative methods of teaching brainstorming?

Answered: 1 week ago

Question

How can sensitivity to pain be altered?

Answered: 1 week ago

Question

What would you do?

Answered: 1 week ago