Questions from Financial Reporting

Q: On January 1, 20X1, Manuel Company’s merchandise inventory was $

On January 1, 20X1, Manuel Company’s merchandise inventory was $300,000. During 20X1, Manuel purchased $1,900,000 of merchandise and recorded sales of $2,000,000. The gross profit margin on these sale...

Q: Selected information concerning the operation of Kern Company for the year ended

Selected information concerning the operation of Kern Company for the year ended December 31, 20X1, is available as follows: No work-in-process inventories existed at the beginning or end of 20X1. Re...

Q: Blago Wholesale Company began operations on January 1, 20X1, and

Blago Wholesale Company began operations on January 1, 20X1, and uses the average cost method in costing its inventory. Management is contemplating a change to the FIFO method in 20X2 and is intereste...

Q: KW Steel Corp. uses the LIFO method of inventory valuation.

KW Steel Corp. uses the LIFO method of inventory valuation. Waretown Steel, KW’s major competitor, instead uses the FIFO method. The following are excerpts from each companyâ&#...

Q: Nathan’s Grills, Inc., imports and sells premium-quality gas

Nathan’s Grills, Inc., imports and sells premium-quality gas grills. The company had the following layers in its LIFO inventory at January 1, 20X4, at which time the replacement cost...

Q: Watsontown Yacht Sales has been selling large power cruisers for 25 years

Watsontown Yacht Sales has been selling large power cruisers for 25 years. On January 1, 20X1, the company had $5,950,000 in inventory (based on a FIFO valuation). While the number of yachts in Watson...

Q: The following information related to Exxon Mobil’s inventories is taken from its

The following information related to Exxon Mobil’s inventories is taken from its 2017 annual report. Required: 1. By how much would net income for 2017 have differed had Exxon Mobil...

Q: The following inventory valuation errors have been discovered for Knox Corporation:

The following inventory valuation errors have been discovered for Knox Corporation: •The 20X1 year-end inventory was overstated by $23,000. •The 20X2 year-end inven...

Q: Acute Company manufactures a single product. On December 31, 20X0

Acute Company manufactures a single product. On December 31, 20X0, it adopted the dollar- value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was deter...

Q: On December 31, 20X1, Fern Company adopted the dollar-

On December 31, 20X1, Fern Company adopted the dollar-value LIFO inventory method. All of Fern’s inventories constitute a single pool. The inventory on December 31, 20X1, using the d...