J Cullumber Company has had issues counting its inventory over the last several years. Assuming that the 2022 inventory was correct,the following information was gathered.Year Net Income20232024202520262027Year$124,9002023Prepare a schedule showing the adjusted net income figure for each year after considering the inventory errors. Ignore the effect ofincome taxes.Error in InventoryUnderstated by $16,000Understated by $4,300Correct$186,600$145,900$139,100 Overstated by $13,200$192,300 Overstated by $7.600$Net Income Per Books Add Overstatement Jan. 1$Deduct UnderstatementJan.1$Deduct OverstatementDec. 31 Prepare a schedule showing the adjusted net income figure for each year after considering the inventory errors. Ignore the effect ofincome taxes.Year20232024202520262027$Net Income Per BooksAdd Overstatement Jan. 1$Deduct UnderstatementJan.1$$Deduct Overstatement IDec. 31

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Description: J Cullumber Company has had issues counting its inventory over the last several years. Assuming that the 2022 inventory was correct,the following information was gathered.Year Net Income20232024202520262027Year$124,9002023Prepare a schedule showing t

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Cullumber Company has had issues counting its inventory over the last several years. Assuming that the 2022 inventory was correct. the following information was gathered. Year Net Income 2023 2024 2025 2026 2027 Year $124,900 $186,600 2023 $145,900 Prepare a schedule showing the adjusted net income figure for each year after considering the inventory errors. Ignore the effect of income taxes. Error in Inventory Understated by $16,000 Understated by $4,300 Correct $139,100 Overstated by $13.200 $192,300 Overstated by $7,600 S Net Income Per Books Add Overstatement Jan. 1 Deduct Understatement Jan.1 Deduct Overstatement Dec. 31

Cullumber Company has had issues counting its inventory over the last several years. Assuming that the 2022 inventory was correct. the following information was gathered. Year Net Income 2023 2024 2025 2026 2027 Year $124,900 $186,600 2023 $145,900 Prepare a schedule showing the adjusted net income figure for each year after considering the inventory errors. Ignore the effect of income taxes. Error in Inventory Understated by $16,000 Understated by $4,300 Correct $139,100 Overstated by $13.200 $192,300 Overstated by $7,600 S Net Income Per Books Add Overstatement Jan. 1 Deduct Understatement Jan.1 Deduct Overstatement Dec. 31

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 2TP: Assume your company uses the periodic inventory costing method, and the inventory count left out an...

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If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
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If a group of inventory items costing $3,200 had been double counted during the year-end inventory count, what impact would the error have on the following inventory calculations? Indicate the effect (and amount) as either (a) none, (b) understated $______, or (c) overstated $______. Table 10.2
Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
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Fava Company began operations in 2018 and used the LIFO inventory method for both financial reporting and income taxes. At the beginning of 2019, the anticipated cost trends in the industry had changed, so that it adopted the FIFO method for both financial reporting and income taxes. Fava reported revenues of 300,000 and 270,000 in 2019 and 2018, respectively. Fava reported expenses (excluding income tax expense) of 125,000 and 120,000 in 2019 and 2018, which included cost of goods sold of 55,000 and 45,000, respectively. An analysis indicates that the FIFO cost of goods sold would have been lower by 8,000 in 2018. The tax rate is 21%. Fava has a simple capital structure with 15,000 shares of common stock outstanding during 2018 and 2019. It paid no dividends in either year. Required: 1. Prepare the journal entry to reflect the change. 2. At the end of 2019, prepare the comparative income statements for 2019 and 2018. Notes to the financial statements are not necessary. 3. At the end of 2019, prepare the comparative retained earnings statements for 2019 and 2018.