E9-4 Dover Company began operations in 2012 and determined its ending inventory at cost and at the lower of cost or market at December 31, 2012 and December 31, 2013 . This information is presented below.
Cost lower of cost or market
12/31/12 $346,000 $322,000
12/31/12 410,000 390,000
a) Prepare the journal entries required at December 31,2012 and December 31,2013 assuming that the inventory is recorded at lower of cost or market and a perpetual inventory system. Assume the cost of goods sold method with no allowance used.
b) Prepare journal entries required at December 31, 2012 and December 31,2013 assuming that the inventory is recorded at lower of cost or market and a perpetual inventory system. Assume the loss method with an allowance used.
c) Which of the 2 methods above provides the higher net income in each year?
Click here for the solution: Dover Company began operations in 2012 and determined its ending inventory at cost and at the lower of cost or market at December 31, 2012 and December 31, 2013
Showing posts with label Lower. Show all posts
Showing posts with label Lower. Show all posts
Monday, August 17, 2015
Saturday, August 15, 2015
LaGreca Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items
E9-6 (Lower-of-Cost-or-Market—Error Effect) LaGreca Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2010, included product X. Relevant per-unit data for product X appear below.
Estimated selling price $50
Cost 40
Replacement cost 38
Estimated selling expense 14
Normal profit 9
There were 1,000 units of product X on hand at December 31, 2010. Product X was incorrectly valued at $38 per unit for reporting purposes. All 1,000 units were sold in 2011.
Instructions
Compute the effect of this error on net income for 2010 and the effect on net income for 2011, and indicate the direction of the misstatement for each year.
Click here for the solution: LaGreca Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items
Estimated selling price $50
Cost 40
Replacement cost 38
Estimated selling expense 14
Normal profit 9
There were 1,000 units of product X on hand at December 31, 2010. Product X was incorrectly valued at $38 per unit for reporting purposes. All 1,000 units were sold in 2011.
Instructions
Compute the effect of this error on net income for 2010 and the effect on net income for 2011, and indicate the direction of the misstatement for each year.
Click here for the solution: LaGreca Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items
Saturday, July 11, 2015
A progressive tax system is one in which higher-income people pay ____ than lower-income people
1) A progressive tax system is one in which higher-income people pay ____ than lower-income people.
2) ____ would be considered taxable income.
3) You have up to three years after mailing your tax return to file an amended tax return (1040X).
a. True
b. False
4) Connie is a 20 year old college student who earned $8,000 and spent it all on her support during the year. Her parents may claim her as a tax dependent as long as
5) You would typically not include ____ in your gross income.
6) A tax audit is a(n)
7) The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.
a. True
b. False
8) Molly and Justin are considering contributing $5,000 to their favorite, tax deductible charity. This contribution will bring their total itemized deductions to $20,000. Assuming they are in the 28% marginal tax bracket, how much will they save in taxes by contributing this $5,000 to charity?
9) A couple will usually incur a lower tax liability if they choose "married, filing jointly" rather than "married, filing a separately."
a. True
b. False
10) Mr. and Mrs. McMurray have three children ages 3, 6, and 12 for which they paid $6,000 in child care expenses this year. Assume the McMurray's tax liability is initially calculated to be $10,000. Then apply a 20% tax credit for child care expenses within limits normally allowed. How much will their final tax liability be?
11) Tax avoidance is legal, tax evasion is illegal.
a. True
b. False
12) Which of the following cannot be adjustment(s) to gross income on the 1040 form?
13) Tax-deferred income is better than tax-free income.
a. True
b. False
14) Russ and Lois got married December 30. Since they were single for most of the year, however, they can legally file as married taxpayers in the year of the wedding.
a. True
b. False
15) Alimony received is included in gross income for the receiver and a tax deduction for the payer.
a. True
b. False
16) For tax purposes, head-of-household refers to
17) Buddy Slaton has only one itemized deduction item, the $3,000 he gave to his church. His standard deduction this year is $5,450, and he is in the 15% marginal tax bracket. How much will his contribution to the church save Buddy in taxes this year?
18) Pete and Pam are married with four dependent children. Pete and Pam can legally file using which of the following filing statuses?
19) If you do not wish to itemize deductions, you can use the
20) ____ income is gross income less tax deductions and payments for insurance and retirement savings.
21) The standard deduction is a blanket deduction that depends on the taxpayers
22) A declaration of estimated taxes is made by filing
23) Itemized non-business expenses do not include
24) You are preparing your own tax return. The least costly source for answering your questions would be
25) You have no employer provided pension plan; your IRA contributions are treated as
26) The total amount that you owe for income tax in one year is your tax
27) Which of the following can be adjustment(s) to gross income on the 1040 form?
28) Ben and Jack both earned $60,000 this year. Ben (age 30) is married with two children, and Jack (age 68) is single with no dependents. Which of the following is true regarding the amount of Social Security taxes they will pay?
29) The tax rate on capital gains for most people is
30) Murray (age 68, single) just sold his home of 35 years so that he could relocate nearer his grandchildren. He realized a $400,000 capital gain on the home. How much of this gain will Murray have to pay taxes on?
Click here for the solution: TV commercials, newspaper and magazine ads, the tools that carry and deliver the “image” of a marketed product or service, are known as its
2) ____ would be considered taxable income.
3) You have up to three years after mailing your tax return to file an amended tax return (1040X).
a. True
b. False
4) Connie is a 20 year old college student who earned $8,000 and spent it all on her support during the year. Her parents may claim her as a tax dependent as long as
5) You would typically not include ____ in your gross income.
6) A tax audit is a(n)
7) The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.
a. True
b. False
8) Molly and Justin are considering contributing $5,000 to their favorite, tax deductible charity. This contribution will bring their total itemized deductions to $20,000. Assuming they are in the 28% marginal tax bracket, how much will they save in taxes by contributing this $5,000 to charity?
9) A couple will usually incur a lower tax liability if they choose "married, filing jointly" rather than "married, filing a separately."
a. True
b. False
10) Mr. and Mrs. McMurray have three children ages 3, 6, and 12 for which they paid $6,000 in child care expenses this year. Assume the McMurray's tax liability is initially calculated to be $10,000. Then apply a 20% tax credit for child care expenses within limits normally allowed. How much will their final tax liability be?
11) Tax avoidance is legal, tax evasion is illegal.
a. True
b. False
12) Which of the following cannot be adjustment(s) to gross income on the 1040 form?
13) Tax-deferred income is better than tax-free income.
a. True
b. False
14) Russ and Lois got married December 30. Since they were single for most of the year, however, they can legally file as married taxpayers in the year of the wedding.
a. True
b. False
15) Alimony received is included in gross income for the receiver and a tax deduction for the payer.
a. True
b. False
16) For tax purposes, head-of-household refers to
17) Buddy Slaton has only one itemized deduction item, the $3,000 he gave to his church. His standard deduction this year is $5,450, and he is in the 15% marginal tax bracket. How much will his contribution to the church save Buddy in taxes this year?
18) Pete and Pam are married with four dependent children. Pete and Pam can legally file using which of the following filing statuses?
19) If you do not wish to itemize deductions, you can use the
20) ____ income is gross income less tax deductions and payments for insurance and retirement savings.
21) The standard deduction is a blanket deduction that depends on the taxpayers
22) A declaration of estimated taxes is made by filing
23) Itemized non-business expenses do not include
24) You are preparing your own tax return. The least costly source for answering your questions would be
25) You have no employer provided pension plan; your IRA contributions are treated as
26) The total amount that you owe for income tax in one year is your tax
27) Which of the following can be adjustment(s) to gross income on the 1040 form?
28) Ben and Jack both earned $60,000 this year. Ben (age 30) is married with two children, and Jack (age 68) is single with no dependents. Which of the following is true regarding the amount of Social Security taxes they will pay?
29) The tax rate on capital gains for most people is
30) Murray (age 68, single) just sold his home of 35 years so that he could relocate nearer his grandchildren. He realized a $400,000 capital gain on the home. How much of this gain will Murray have to pay taxes on?
Click here for the solution: TV commercials, newspaper and magazine ads, the tools that carry and deliver the “image” of a marketed product or service, are known as its
Saturday, May 9, 2015
ACC 225 Week Six (Week 6) Solution
ACC 225 Week Six (Week 6) Solution
CheckPoint: Computing Inventory Balances and Lower of Cost or Market
• Resource: Fundamental Accounting Principles, pp. 247-249
• Due Date: Day 4 [Individual] forum
• Complete Quick Study question QS 6-1 on p. 247 and Exercises 6-1 and 6-5 on pp. 248 and 249.
Assignment: Estimating Inventory and Preparing Multiple-Step and Single-Step Income Statements
• Resource: Fundamental Accounting Principles, pp. 251 and 256
• Due Date: Day 7 [Individual] forum
• Complete Problems 5-4A on p. 212, 6-1A on p. 251, and 6-6B and 6-7B on p. 256.
• Post your answers as an attachment.
Click here for the solution: ACC 225 Week Six (Week 6) Solution
CheckPoint: Computing Inventory Balances and Lower of Cost or Market
• Resource: Fundamental Accounting Principles, pp. 247-249
• Due Date: Day 4 [Individual] forum
• Complete Quick Study question QS 6-1 on p. 247 and Exercises 6-1 and 6-5 on pp. 248 and 249.
Assignment: Estimating Inventory and Preparing Multiple-Step and Single-Step Income Statements
• Resource: Fundamental Accounting Principles, pp. 251 and 256
• Due Date: Day 7 [Individual] forum
• Complete Problems 5-4A on p. 212, 6-1A on p. 251, and 6-6B and 6-7B on p. 256.
• Post your answers as an attachment.
Click here for the solution: ACC 225 Week Six (Week 6) Solution
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