Tutorials Magnet

Merchandise inventory: Lower of cost or market method The lower of cost or market method (LCM) states that if prices fall on inventory items, a loss should be recognized in the period of the decline in price. Market is defined as the replacement cost of the inventory item. If the replacement cost of inventory falls below the cost, we write the […]

Merchandise inventory calculation: FOB and consigned goods Click following link to download this documentMerchandise inventory calculation – FOB and consigned goods.docx

Merchandising: Closing entries After the first two closing entries, the Income Summary account contains the net income for the period. To journalize the third closing entry, net income must first be computed. Net income is the difference between revenues (net sales, in this problem) and expenses. First, we must compute net sales: Net sales = Sales – Sales discounts

Merchandising: Computing income statement amounts In this exercise you are being asked to compute Net Sales (Net Revenues), Gross Profit, and Net Income. Below are the formulas and the computations of each of the required elements. Net Sales = Sales – Discounts – Returns and Allowances.   = $127,900 – $3,900 – $2,900   = $121,100 = Net Sales –

Merchandising: Computing amount due Merchandising: Amount received by seller with FOB Shipping point and freight prepaid Click following link to download this documentMerchandising -Computing amount due.docx

Notes receivable: Basic journal entry There are several entries required in this problem. First, an entry is made to record the receipt of the note receivable to close theAccounts Receivable – Sanchez Company account. Next, an entry is made to record the receipt of cash in payment of the note receivable. Journal entry to record the receipt of

Notes receivable: Recording accrued interest Click following link to download this documentNotes receivable – Recording accrued interest.docx

Cash and cash equivalents Principles of effective cash management Principles of effective cash management Click following link to download this documentCash and cash equivalents.docx

Changes to net realizable value Click following link to download this documentChanges to net realizable value.docx

Components of annual report For each item, indicate the portion of the annual report in which it would be found. Preparing a statement of retained earningsDiaz Company has the following information from its accounting records on December 31. Required:Prepare a statement of retained earnings on December 31. The statement of retained earnings starts with beginning