Reference no: EM131117700
Retail, LIFO Retail, and Inventory Shortage Late in 2007, Joan Seceda and four other investors took the chain of Becker Department Stores private, and the company has just completed its third year of operations under the ownership of the investment group. Andrea Selig, controller of Becker Department Stores, is in the process of preparing the year-end financial statements. Based on the preliminary financial statements, Seceda has expressed concern over inventory shortages, and she has asked Selig to determine whether an abnormal amount of theft and breakage has occurred. The accounting records of Becker Department Stores contain the following amounts on November 30, 2010, the end of the fiscal year.Cost Retail
Beginning inventory $ 68,000 $100,000
Purchases 255,000 400,000
Net markups 50,000
Net markdowns 110,000
Sales 320,000
According to the November 30, 2010, physical inventory, the actual inventory at retail is $115,000.
(a) Describe the circumstances under which the retail inventory method would be applied and the advantages of using the retail inventory method.
(b) Assuming that prices have been stable, calculate the value, at cost, of Becker Department Stores' ending inventory using the last-in, first-out (LIFO) retail method. Be sure to furnish supporting calculations.
(c) Estimate the amount of shortage, at retail, that has occurred at Becker Department Stores during the year ended November 30, 2010.
(d) Complications in the retail method can be caused by such items as
(1) Freight-in costs,
(2) Purchase returns and allowances,
(3) Sales returns and allowances, and
(4) Employee discounts. Explain how each of these four special items is handled in the retail inventory method.(CMA adapted)
|
Efn analysis for east coast yachts
: After Dan's EFN analysis for East Coast Yachts (see the Closing Case in Chapter 3), Larissa has decided to expand the company's operations.
|
|
A treasury bond futures contract change
: 1. By what amount will the market value of a Treasury bond futures contract change if interest rates rise from 5 to 5.25 percent? The underlying Treasury bond has a duration of 10.48 years and the Treasury bond futures contract is currently being ..
|
|
Aspects of doing business
: Are there aspects of doing business as a publicly traded company that are different from operating as a partnership?
|
|
Briefly summarize the key issues
: Briefly summarize the key issues as well as the key decisions in the U.S. Supreme Court case Hamdan v. Rumsfeld - possible trial of persons suspected of involvement
|
|
Purchase returns and allowances
: Assuming that prices have been stable, calculate the value, at cost, of Becker Department Stores' ending inventory using the last-in, first-out (LIFO) retail method. Be sure to furnish supporting calculations.
|
|
The information provided in the proforma statement
: Assignment: Based on the information provided in the proforma statement attached below, compute the Net Present Value, the Internal Rate of Return, the Cash Payback and the Accounting Rate of Return (CO 6). (Hint: Depreciation is not a cash item)
|
|
How would you explain audit risk model to the decision maker
: How would you explain the audit risk model to the decision makers at AV Imports and Exports? Research risk assessment using your textbook and online library resources and prepare a response.
|
|
What was randy’s net profit on this option
: Randy Rudecki purchased a call option on British pounds for $.02 per unit. The strike price was $1.45, and the spot rate at the time the option was exercised was $1.46. Assume there are 31,250 units in a British pound option. What was Randy’s net pro..
|
|
Problem regarding the required rate of return
: Compute the present value of a perpetuity that pays $ 9,754 annually given a required rate of return of 15 percent per annum.(Round your answer to 2 decimal places; record your answer without commas and without a dollar sign).
|