Eddie's Galleria sells billiard tables. The company has the following purchases and sales for 2024. Date...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Eddie's Galleria sells billiard tables. The company has the following purchases and sales for 2024. Date January 1 March 8 August 22 October 29 January 1 to December 31 Transactions Beginning inventory Purchase Purchase Purchase Sales ($700 each) Units 150 Unit Cost Total Cost $ 540 $ 81,000 120 570 68,400 100 600 60,000 80 640 51,200 450 $ 260,600 400 ces Eddie is worried about the company's financial performance. He has noticed an increase in the purchase cost of billiard tables, but at the same time, competition from other billiard table stores and other entertainment choices have prevented him from increasing the sales price. Eddie is worried that if the company's profitability is too low, stockholders will demand he be replaced. Eddie does not want to lose his job. Since 60 of the 400 billiard tables sold have not yet been picked up by the customers as of December 31, 2024, Eddie decides incorrectly to include these tables in ending inventory. He appropriately includes the sale of these 60 tables as part of total revenues in 2024. Required: 1. What amount will Eddie calculate for ending inventory and cost of goods sold using FIFO, assuming he erroneously reports that 110 tables remain in ending inventory? 2. What amount would Eddie calculate for cost of goods sold using FIFO if he correctly reports that only 50 tables remain in ending inventory? 3. & 4. What effect will the inventory error have on reported amounts for (a) ending inventory, (b) retained earnings, (c) cost of goods sold, and (d) net income (ignoring tax effects) in 2024 and in 2025, assuming that ending inventory is correctly counted at the end of 2025? Eddie's Galleria sells billiard tables. The company has the following purchases and sales for 2024. Date January 1 March 8 August 22 October 29 January 1 to December 31 Transactions Beginning inventory Purchase Purchase Purchase Sales ($700 each) Units 150 Unit Cost Total Cost $ 540 $ 81,000 120 570 68,400 100 600 60,000 80 640 51,200 450 $ 260,600 400 ces Eddie is worried about the company's financial performance. He has noticed an increase in the purchase cost of billiard tables, but at the same time, competition from other billiard table stores and other entertainment choices have prevented him from increasing the sales price. Eddie is worried that if the company's profitability is too low, stockholders will demand he be replaced. Eddie does not want to lose his job. Since 60 of the 400 billiard tables sold have not yet been picked up by the customers as of December 31, 2024, Eddie decides incorrectly to include these tables in ending inventory. He appropriately includes the sale of these 60 tables as part of total revenues in 2024. Required: 1. What amount will Eddie calculate for ending inventory and cost of goods sold using FIFO, assuming he erroneously reports that 110 tables remain in ending inventory? 2. What amount would Eddie calculate for cost of goods sold using FIFO if he correctly reports that only 50 tables remain in ending inventory? 3. & 4. What effect will the inventory error have on reported amounts for (a) ending inventory, (b) retained earnings, (c) cost of goods sold, and (d) net income (ignoring tax effects) in 2024 and in 2025, assuming that ending inventory is correctly counted at the end of 2025?
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Eddies Galleria sells billiard tables. The company has the following purchases and sales for 2024. Eddie is worried about the companys financial performance. He has noticed an increase in the...
-
Eddies Galleria sells billiard tables. The company has the following purchases and sales for 2024. Eddie is worried about the companys financial performance. He has noticed an increase in the...
-
Explain how the structure of the balance sheet corresponds to the accounting equation.
-
Describe an algorithm that takes as input a list of n integers and finds the location of the last even integer in the list or returns 0 if there are no even integers in the list.
-
Amber Industries (a sole proprietorship) sold three 1231 assets during 2016. Data on these property dispositions are as follows: a. Determine the amount and the character of the recognized gain or...
-
The electric field produces a potential difference. If you place one electrode \(10 \mathrm{~m}\) below the surface of the water, you will measure the greatest potential difference if you place the...
-
Maria Bockman, Bates & Hill Fabricators' accounts payable manager, has just received the company's direct materials purchases budget for the first quarter (see Exercise 5-15). The company makes all...
-
Assume the year is a leap year. February 12 to October 22 LOADING... Click the icon to view a table of the number of the day of the year for each date. Question content area bottom Part 1 There are...
-
You are working for a security organization and have been asked to perform a pen test on your E-commerce server. Since you will be using Whitebox pen testing, prepare a plan to carry out the required...
-
This expenditure (formerly general government consumption) includes all current government expenditures for purchases of goods and services (including an employee). a. Capital expenditure b....
-
Steam enters a turbine at 6000 kPa and 600C and exits as a saturated vapor at 0.02 MPa, producing power at a rate of 2000 kW. Changes in kinetic and potential energy of the flowing fluid can be...
-
Assume you are looking to invest $10,000 and you have two friends each of which is offering to sell you a 25% stake in his/her business in exchange for your $10,000. 1) List at least 5 questions you...
-
In an electron microscope, a beam of high energy electrons can knock out core electrons from atoms in the sample. The subsequent relaxation of electrons from higher energy shells to the empty orbital...
-
Explain the following statement: 'you must not lose, in order to win in the financial markets'. What does this mean and why might a trader/portfolio manager say this...what concept are they aware of?
-
How does this ministry notify the public when a trademark has been registered in the UAE? What is the purpose of notifying the public? Read the case study Gucci Am., Inc. v. Guess? Inc and answer the...
-
QUESTION 9 HC-O-C-R R-C-O-CH HC-O-P-O-CH-CH-NH3* O || O a. Phosphatidic acid, Serine O b. Lysophosphatidic acid, Serine, Free FA O c. Lysophosphatidylserine, Free FA O d. 2 Free FAs, Serine, Glycerol...
-
Define human communication.
-
______________ refers to the location, time, and occasion where communication occurs.
-
Identify the four steps of the KEYS process.
Study smarter with the SolutionInn App