Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Save mapter 5,6&70 Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company used the FIFO Inventory costing method, but it failed

image text in transcribed
image text in transcribed
Save mapter 5,6&70 Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company used the FIFO Inventory costing method, but it failed to apply the LC&NRV to the ending Inventory. The preliminary income statement is as follows: $22e, cee Sales Revenue Cost of Goods Sold Beginning Inventory Purchases $ 23, eee 123, Goods Available for Sale Ending Inventory (FIFO cost) 146,000 27,95e Cost of Goods Sold 118, se Gross Profit Operating Expenses 101,950 47,00 Income from Operations Income Tax Expense (30%) 54,950 16,485 Net Income $ 38,465 Assume that you have been asked to restate the financial statements to incorporate the LC&NRV. You have developed the following data relating to the ending inventory Purchase Cast Current Replacement Cost per Unit (Net Realizable Value) A B Quantity 1,560 Per Unit $2.00 5.00 3.00 5.50 Total $ 3,320 4,55e 10,95e 9,13e 3.650 2.ee 1.ee 3.ee 1,662 $27,950 Required: 1-a. Restate the income statement to reflect the LC&NRV rule of the ending Inventory. SPRINGER ANDERSON GYMNASTICS Income Statement (LCANRV basis) For the Year Ended December 31 Sales revenue Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross prott 24 Chapter 5, 6 & 7 0 $ 27,95e 4 Required: 1-e. Restate the income statement to reflect the LC&NRV rule of the ending Inventory. SPRINGER ANDERSON GYMNASTICS Income Statement (LC NRV basis) For the Year Ended December 31 02:30:07 eBook eferences Sales revenue Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Operating expenses Income from operations Income tax expense Net income 0 5 1-b. Apply the lower of cost and net realizable value on an item-by-item basis and show computations. em LCANRV Valuation D S 2. Not available in connect 3. Not available in connect

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_2

Step: 3

blur-text-image_3

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

ISO 13485 Auditing Journal Notes Checklists Observations Evidence Log

Authors: Just Visualize It, The Quality Guy

1st Edition

B08W7SNPGP, 979-8706121884

More Books

Students also viewed these Accounting questions