On January 1, 2021, Displays Incorporated had the following account balances: Accounts Cash Accounts receivable Supplies Inventory Land Accounts payable Notes payable (68, due next year) Common stock Retained earnings Totals Debit Credit $ 40,000 37,000 43,000 88,000 245,000 $ 54,000 38,000 204,000 157,000 $ 453,000 $453,000 From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account for $348,000. b. Sold Inventory on account for $660,000. The cost of the inventory sold was $328,000. c. Received $592,000 from customers on accounts receivable. d. Paid freight on inventory received, $42,000. e. Paid $338,000 to inventory suppliers on accounts payable of $345,000. The difference reflects purchase discounts of $7,000 1. Paid rent for the current year, $60,000. The payment was recorded to Rent Expense. g. Pald salaries for the current year, $168,000. The payment was recorded to Salaries Expense. a. Supplies on hand at the end of the year are $7,000. b. Accrued interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $36,000. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No in the first account field.) View transaction list Journal entry worksheet LOS LO Using the information from the requirements above, complete the 'Analysis'. place.) Analyze the following for Displays Incorporated: (a) Suppose Displays Incorporated decided to maintain its internal records using FIFO but to use LIFO for external reporting. Assuming the ending balance of inventory under LIFO would have been $118,000, calculate the LIFO reserve. LIFO reserve is: (b) Assume Displays Incorporated $88,000 beginning balance of inventory comes from the base year with a cost index of 1.00. The cost index at the end of 2021 of 1.1. Calculate the amount the company would report for inventory using dollar-value LIFO. Ending inventory using dollar-value LIFO: (C) Indicate whether each of the amounts below would be higher or lower when reporting inventory using LIFO (or dollar-value LIFO) instead of FIFO in periods of rising inventory costs and stable inventory quantities, 1. Inventory turnover ratio 2. Average days in inventory 3. Gross profit ratio On January 1, 2021, Displays Incorporated had the following account balances: Accounts Cash Accounts receivable Supplies Inventory Land Accounts payable Notes payable (68, due next year) Common stock Retained earnings Totals Debit Credit $ 40,000 37,000 43,000 88,000 245,000 $ 54,000 38,000 204,000 157,000 $ 453,000 $453,000 From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account for $348,000. b. Sold Inventory on account for $660,000. The cost of the inventory sold was $328,000. c. Received $592,000 from customers on accounts receivable. d. Paid freight on inventory received, $42,000. e. Paid $338,000 to inventory suppliers on accounts payable of $345,000. The difference reflects purchase discounts of $7,000 1. Paid rent for the current year, $60,000. The payment was recorded to Rent Expense. g. Pald salaries for the current year, $168,000. The payment was recorded to Salaries Expense. a. Supplies on hand at the end of the year are $7,000. b. Accrued interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $36,000. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No in the first account field.) View transaction list Journal entry worksheet LOS LO Using the information from the requirements above, complete the 'Analysis'. place.) Analyze the following for Displays Incorporated: (a) Suppose Displays Incorporated decided to maintain its internal records using FIFO but to use LIFO for external reporting. Assuming the ending balance of inventory under LIFO would have been $118,000, calculate the LIFO reserve. LIFO reserve is: (b) Assume Displays Incorporated $88,000 beginning balance of inventory comes from the base year with a cost index of 1.00. The cost index at the end of 2021 of 1.1. Calculate the amount the company would report for inventory using dollar-value LIFO. Ending inventory using dollar-value LIFO: (C) Indicate whether each of the amounts below would be higher or lower when reporting inventory using LIFO (or dollar-value LIFO) instead of FIFO in periods of rising inventory costs and stable inventory quantities, 1. Inventory turnover ratio 2. Average days in inventory 3. Gross profit ratio
