Questions from Financial Accounting

Q: “A company’s net income appears directly on the income statement and

“A company’s net income appears directly on the income statement and the retained earnings statement, and it is included indirectly in the company’s balance sheet.” Do you agree? Explain.

Q: In its first month of operations, Bethke Company made three purchases

In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at $8. Assuming there are...

Q: Data for Bethke Company are presented in BE6-3. Compute

Data for Bethke Company are presented in BE6-3. Compute the cost of the ending inventory under the average-cost method, assuming there are 360 units on hand. (Round average cost per unit to nearest ce...

Q: The management of Svetlana Corp. is considering the effects of inventory

The management of Svetlana Corp. is considering the effects of inventory-costing methods on its financial statements and its income tax expense. Assuming that the price the company pays for inventory...

Q: In its first month of operation, Hoffman Company purchased 100 units

In its first month of operation, Hoffman Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8. At the end of the month, 180 units remained. Compute the...

Q: Pettit Company reports net income of $90,000 in 2019

Pettit Company reports net income of $90,000 in 2019. However, ending inventory was understated $7,000. What is the correct net income for 2019? What effect, if any, will this error have on total asse...

Q: Central Appliance Center accumulates the following cost and net realizable value data

Central Appliance Center accumulates the following cost and net realizable value data at December 31. Compute the lower-of-cost-or-net realizable value for the company’s total inve...

Q: At December 31, 2019, the following information was available for

At December 31, 2019, the following information was available for A. Kamble Company: ending inventory $40,000, beginning inventory $60,000, cost of goods sold $270,000, and sales revenue $380,000. Cal...

Q: Gregory Department Store uses a perpetual inventory system. Data for product

Gregory Department Store uses a perpetual inventory system. Data for product E2-D2 include the following purchases. On June 1, Gregory sold 26 units, and on August 27, 40 more units. Prepare the per...

Q: Match each situation with the fraud triangle factor—opportunity, financial

Match each situation with the fraud triangle factor—opportunity, financial pressure, or rationalization—that best describes it. (a) An employee’s monthly credit card payments are nearly 75% of his or...