When preparing its quarterly financial statements, Patterson Co. uses the gross margin method to estimate ending...

    

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When preparing its quarterly financial statements, Patterson Co. uses the gross margin method to estimate ending inventory. The following information is available for the 1 st quarter of 2020: Beginning Inventory $300,000 $800,000 Purchases Sales $1,500,000 Estimated gross margin percentage 40% What was Patterson's estimated inventory on March 31, 2020? Ⓒ$200,000 $500,000 $900,000 $600,000 An error that results in overstating ending inventory would have what effect on the company's financial statements in the current year? Ending inventory will be overstated, COGS will be understated and net income, retained earnings and equity will be overstated. Ending inventory will be overstated, COGS will be overstated and net income, retained earnings and equity will be overstated. Ending inventory will be overstated, COGS will be understated and net income, retained earnings and equity will be understated. Ending inventory will be overstated, COGS will be overstated and net income, retained earnings and equity will be understated. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below: Skis Boots Apparel Supplies $200,000 $130,000 $80,000 150,000 100,000 60,000 130,000 120,000 50,000 10% Selling price Cost Replacement cost Sales commission $160,000 140,000 120,000 $180,000. 10% 10% 10% In applying the lower of cost and net realizable value rule, the inventory of skis would be valued at: $200,000. $150,000. $130,000. Cantor Corporation acquired a manufacturing facility on four acres of land for a lump-sum price of $10,000,000. The building included used but functional equipment. According to independent appraisals, the fair values were $6,750,000, $4,500,000, and $3,750,000 for the building, land, and equipment, respectively. The initial values of the building, land, and equipment would be: Building Land. Equipment Option a. Option b. Option c. None of the above Option a Option b Option c None of the above. $6,750,000 $5,000,000 $4,500,000 $4,500,000 $3,000,000 $3,000,000 $3,750,000 $2,000,000 $2,500,000 When preparing its quarterly financial statements, Patterson Co. uses the gross margin method to estimate ending inventory. The following information is available for the 1 st quarter of 2020: Beginning Inventory $300,000 $800,000 Purchases Sales $1,500,000 Estimated gross margin percentage 40% What was Patterson's estimated inventory on March 31, 2020? Ⓒ$200,000 $500,000 $900,000 $600,000 An error that results in overstating ending inventory would have what effect on the company's financial statements in the current year? Ending inventory will be overstated, COGS will be understated and net income, retained earnings and equity will be overstated. Ending inventory will be overstated, COGS will be overstated and net income, retained earnings and equity will be overstated. Ending inventory will be overstated, COGS will be understated and net income, retained earnings and equity will be understated. Ending inventory will be overstated, COGS will be overstated and net income, retained earnings and equity will be understated. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below: Skis Boots Apparel Supplies $200,000 $130,000 $80,000 150,000 100,000 60,000 130,000 120,000 50,000 10% Selling price Cost Replacement cost Sales commission $160,000 140,000 120,000 $180,000. 10% 10% 10% In applying the lower of cost and net realizable value rule, the inventory of skis would be valued at: $200,000. $150,000. $130,000. Cantor Corporation acquired a manufacturing facility on four acres of land for a lump-sum price of $10,000,000. The building included used but functional equipment. According to independent appraisals, the fair values were $6,750,000, $4,500,000, and $3,750,000 for the building, land, and equipment, respectively. The initial values of the building, land, and equipment would be: Building Land. Equipment Option a. Option b. Option c. None of the above Option a Option b Option c None of the above. $6,750,000 $5,000,000 $4,500,000 $4,500,000 $3,000,000 $3,000,000 $3,750,000 $2,000,000 $2,500,000

Answer rating: 100% (QA)

1 Cost of Goods sold Sales Gross Profit 1500000 1500000 40 900000 Ending Inventory Beginning Invento... View the full answer