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Cost of Goods sold at the Pioneer Company for Year 3 and Year 4were as follows:

Year 3 Year 4
Beginning inventory $ 135,000 $ 145,000
Purchases 350,000 425,000
Cost of goods available for sale 485,000 570,000
Ending inventory 145,000 150,000
Cost of goods sold $ 340,000 $ 420,000



Pioneer Company made two errors: 1) ending inventory reported atthe end of Year 3 was understated by $15,000 and 2) endinginventory at the end of Year 4 was overstated by $6,000. Whatshould the correct cost of goods amount for Year 4?

a

$414,000

b

$426,000

c

$429,000

d

$441,000

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Casey Durgan
Casey DurganLv2
29 Sep 2019

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Related questions

1. How should the balances of Progress Billings and Constructionin Progress be shown at reporting dates prior to completion of along-term contract

a. Progress billings as income, construciton in progress asinventory

b. Net , as income from construction if credit balance, and lossfrom construction if debit balance

c. Progress Billings as deferred income, Construction inProgress as a current asset

d. Net, as a current asset if debit balance and currentliability if credit balance

3. the competed-contract method of accounting for long-termconstruction-type contracts is preferable when

a. a contractor is involved in numerous projects

b. the contracts are of a relatively long duration

c. estimates of costs to complete and extent of progress towardcompletion are reasonably dependable

d. there are inherent uncertainties in the contract beyondnormal business risks

4. C & J Construction has consistently used the percentageof completion method of recognizing income. Last year C & Jstarted work on a $4,500,000 constuction contract, which wascompleted this year, the accounting records desclosed the followingdata for the last year

Progress billings - $1,650,000

Costs incurred - 1,350,000

Collections - 1,050,000

Estimated cost to complete - 2,700,000

How much income should C & J have recognized on thiscontract last year?

a. 105,000

b. 150,000

c. 300,000

d. 350,000

6. The use of the gross profit assumes

a. the amount of gross profit is the same as in prior years

b. sales and cost of goods sold have not changed from previousyears

c. inventory values have not increased from previous years

d. the relationship between selling price and cost of goods soldis similar to prior years

7. the gross profit method of inventory valuation is not validwhen

a. there is substantial increase in the quantity of inventoryduring the year

b. there is substantial increase in the cost of inventory duringthe year

c. the gross margin percentage changes significantly during theyear

d. all ending inventory is destroyed by dire before it can becounted

8. When the current year's ending inventory amount isoverstated,

a. the current year's cost of goods sold is overstated

b. the current year's total assets are understated

c. the current year's net income is overstated

d. the next year's income is overstated

9. If the ending inventory balance is understated, net income ofthe same period

a. will be overstated

b. will be understated

c. will be unaffected

d. cannot be determined from the above information

10. An overstatement of ending inventory in Period 1 wouldresult in income of Period 2 being

a. overstated

b. understated

c. correctly stated

d. the answer cannot be determined from the informationgiven

11. what is the maximum amount at which inventory can be valuedwhen the goods have experienced a permanent decline in value

a. historical cost

b. sales price

c. net realizable value

d. net realizable value reduced by a normal profit margin

12. Net realizable value can be defined as

a. selling price

b. selling price less costs to complete and sell

c. selling price plus costs to complete and sell

d. acquisition cost plus costs to complete and sell

13. Miller company needs an estimate of its ending inventorybalance. The following information is available

Cost Retail

sales revenue - 180,000

beginning inventory - 35,000 62,000

net purchases - 100,000 135,000

gross margin percentage - 30%

Given this information, when using the gross margin estimationmethod, ending inventory is approx

a. 1,000

b. 9,000

c. 19,000

d. 11,650

14. Which of the following would not be reported asinventory?

a. land acquired for resale by a real estate firm

b. stocks and bonds held for resale by a brokerage firm

c. partially completed goods held by a manufacturing company

d. machinery acquired by a manufacturing company for use in theproduction process

15. Cost of goods sold is equal to

a. the cost of inventory on hand at the end of a period plus netpurchases minus the cost of inventory on hand at the beginning

b. the cost of inventory on hand at the beginning of a periodminus net purchases plus the cost of inventory on hand at the endof a period

c. the cost of inventory on hand at the beginning of a periodplus net sales minus the cost of inventory on hand at the end of aperiod

d. the cost of inventory on hand at the beginning of a periodplus net purchases minus the cost of inventory on hand at the endof a period

17. In a period of falling prices, the use of which of thefolliwng inventory cost flow methods would typically result inhighest cost of goods sold?

a. FIFO

b. LIFO

c. Weighted average cost

d. Specific identification

18. In a period of rising prices, the inventory cost allocationmethod that tends to result in the lowest reported net incomeis

a. LIFO

b. FIFO

c. Moving average

d. Weighted average

19. The LIFO inventory cost flow method may be applied to whichof the following inventory systems?

Periodic Perpetual

a. no no

b. no yes

c. yes yes

d. yes no

Kriveloff Company is in the processof closing its books at the end of 2017. The company's preliminaryincome statement for 2017 and its reported income statement for2016 are given below.

2017 2016

SalesRevenues $900,000 $880,000

Costof GoodsSold (450,000) (425,000)

GrossProfit 450,000 455,000

Depreciation (115,000) (115,000)

OtherExpenses (108,000) (102,000)

NetIncome $227,000 $238,000

Kriveloff's recordsreveal the following information:

(1) Kriveloff failed toaccrue $7,000 of supplies expense at the end of2016. The supplies expense was recorded as paid in2017.

(2) On 1/1/15, Kriveloffpurchased a machine for $120,000. Although the machinewas expected to have a five-year life, it was erroneously expensedin recording the purchase. The appropriate depreciationmethod for this machine is double-declining-balance with noresidual.

(3) At the end of 2017,Kriveloff decided to change its inventory costing method fromaverage cost to the FIFO method. An analysis of theaccounting records provides the following cost of goods soldamounts under average cost and FIFO:

Year FIFO Average

2015 410,000 430,000

2016 420,000 425,000

2017 432,000 450,000

(4) Kriveloff acquired a truck on1/3/15 for $75,000 and estimated its useful life to be 6 years witha salvage value of $15,000. In 2017, after the preliminarystatements were prepared, Kriveloff realized that the truck couldbe used for an additional 5 years, but that the salvage value atthe end of that time would probably be only $10,000. Straight-linedepreciation is being used.

Required:

A. Preparethe necessary journal entries at December 31, 2017, to record theabove information.

B. Prepare new comparative income statements to reflect theadjustments required by items (1)-(3) above. You mayignore income taxes.

C. Retainedearnings reported for the end of 2016 was $2,333,000 and at the endof 2015 was $2,195,000. Dividends of $100,000 have beendeclared in each year. Prepare comparative statements ofretained earnings for Kriveloff Company, reflecting appropriateadjustments from items (1)-(3) above, ignoring income taxes.

Show all work including formulas

1.Acompany borrowed $50,000 cash from the bank and signed a 6-yearnote at 7%. The present value of an annuity for 6 years at 7% is4.7665. The annual annuity payments equal (closest to):

$10,489.88.
$11,004.88.
$45,500.00.
$11,739.88.
$47,550.00.


2. A corporation declared and issued a 15% stock dividend onNovember 1. The following information was available immediatelyprior to the dividend:


Retained earnings $750,000
Shares issued and outstanding 60,000
Market value per share $15
Par value per share $5


The amount that the total stockholders' will increase (decrease) asa result of recording this stock dividend is:

$45,000.
$135,000.
$(45,000).
$(135,000).
$0.




3.A company's sales in Year 1 were $250,000 and in Year 2 were$287,500. Using Year 1 as the base year, the sales trend percentfor Year 2 is:
87%.
100%.
115%.
15%.
13%.









4.A company uses the weighted average method for inventory costing.During a period, a production department had 20,000 units inbeginning goods in process inventory which were 40% complete; thedepartment completed and transferred 165,000 units. At the end ofthe period, 22,000 units were in the ending goods in processinventory and are 75% complete. All of these are with respect tolabor. The production department had labor costs in the beginninggoods is process inventory of $99,000 and total labor costs addedduring the period are $726,825. Compute the equivalent cost perunit for labor.
$4.40.
$4.76.
$4.19.
$4.55.
$4.61.




5.A company manufactures and sells a product for $120 per unit. Thecompany's fixed costs are $68,760, and its variable costs are $90per unit. The company's break-even point in units is:
2,292.
573.
764.
327.
840.



6.Stritch Company is trying to decide how many units of merchandiseto order each month. The company's policy is to have 20% of thenext month's sales in inventory at the end of each month. Projectedsales for August, September, and October are 30,000 units, 20,000units, and 40,000 units, respectively. How many units must bepurchased in September?
14,000.
20,000.
22,000.
24,000.
28,000.


7.A company is considering the purchase of a new piece of equipmentfor $90,000. Predicted annual cash inflows from this investment are$36,000 (year 1), $30,000 (year 2), $18,000 (year 3), $12,000 (year4) and $6,000 (year 5). The payback period is:
4.50 years.
4.25 years.
3.50 years.
3.00 years.
2.50 years.

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