Question: Nicole's business uses the accrual method of accounting and accounts for inventory with specific identification. In year 0, Nicole received a $4,500 payment with an

Nicole's business uses the accrual method of accounting and accounts for inventory with specific identification. In year 0, Nicole received a $4,500 payment with an order for inventory to be delivered to the client early next year. Nicole has the inventory ready for delivery at the end of year 0 (she purchased the inventory in year 0 for $2,300).
a. When does Nicole recognize the $2,200 of gross profit ($4,500 revenue minus $2,300 cost of the inventory) if she uses the full-inclusion method?
b. When does Nicole recognize the $2,200 of gross profit from the inventory sale if she uses the deferral method?
c. How would Nicole account for the inventory-related transactions if she uses the cash method of accounting and her annual sales are usually less than $100,000?
d. How would Nicole account for the inventory-related transactions if she uses the cash method of accounting and her annual sales are usually over $2,000,000 per year?

Step by Step Solution

★★★★★

3.46 Rating (179 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a If Nicole is an accrual method taxpayer using specific identification for the goods she can elect ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1169-L-B-L-I-T-E(1998).docx

120 KBs Word File

Students Have Also Explored These Related Business Law Questions!

Nicoles business uses the accrual method of accounting and accounts for inventory with specific identification. In year 0, Nicole received a $4,500 payment with an order for inventory to be delivered...

Accounting students understand that the accrual method of accounting is superior to the cash method for measuring the income and expenses from an ongoing business for financial reporting purposes....

Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end of 2016. Rivendell converted to an S corporation on January 1, 2017. a. What is Rivendell's net...

10. Corp. A records depreciation for the year in the amount of $2,000. To record the event, Corp. A should ... A Debit Accumulated Depreciation for $2,000 B Debit Equipment Expense for $2,000 Credit...

Note: This problem is for the 2019 tax year. Devon Bishop, age 45, is single. He lives at 1507 Rose Lane, Albuquerque, NM 87131. His Social Security number is 111-11-1117. Devon did not engage in any...

The forms dont have to be all filled out but would really appreciate it since it will help me see exactly how the process works! Thank you, in advance. ProConnect Tax Devon Bishop, age 45, is single....

IM Me with price and any questions SIGNATURE PROJECT ACC432A June 2014 WARDENS' 2013 TAX RETURN CCH BOOKLET TITLED: 2014 Edition Individuals', Corporation, partnership, and Fiduciary Fact Patterns...

I need help on the 1065 partnership return. Its the one with Bilco Products. Thank you for whoever does. :) 2012 Edition Individuals', Corporation, Partnership, and Fiduciary Fact Patterns and Blank...

Tax Return Problems - Corporation Tax Return: Fall 2021 Required: . Complete Bell Construction Solutions Inc.'s (BCS) 2020 Form 1120, Pages 1 - 6, and The Book to Tax Reconciliation using the...

Petersen Ltd has the following land and building in its financial statements as at 30 June 2018: Residential land, at cost 1 000 000 Factory land, at valuation (2016) 900 000 Buildings, at valuation...

Security Data Company has outstanding 50,000 shares of common stock currently selling at $40 per share. The firm most recently had earnings available for common stockholders of $120,000, but it has...

Question 2 2 1 pts A dataloase designer installs MYSQL Community Edtition to create a database. Which account does the designer use to gain full control of MySQL ? Developer System Root Designer

Rates on Two-Year Bonds and One-Year Bonds. Suppose the interest rate on a 2-year bond was higher than the interest rate on a 1-year bond. What does the market believe will happen next year to 1-year...

George and Debbie were legally married on December 31, 2016. Can they file their 2016 income tax return using the status of married filing jointly? Why or why not? What other filing status choices do...

Using the appropriate tax tables or tax rate schedules, determine the tax liability for tax year 2016 in each of the following instances. In each case, assume the taxpayer can take only the standard...

Victoria's 2016 tax return was due on April 15, 2017, but she did not file it until June 12, 2017. Victoria did not file an extension. The tax due on the tax return when filed was $8,500.In 2016,...

Problem : GPA ConverterIn the CSC 2 6 2 Course Outline, there is a Grade Table that shows the conversion from course grades in points to letter grades ( A , A - , B + , etc. ) and from letter grades...

Consider the following two assets: Asset A: expected return is 4% and standard deviation of return is 42% Asset B: expected return is 1.5% and standard deviation of return is 24% The correlation...

Northern Pacific Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by 45% with a $5...