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kow [346]
3 years ago
11

The inventory records for Radford Co. reflected the following Beginning inventory @ May 1 800 units @ $ 3.20 First purchase @ Ma

y 7 900 units @ $ 3.40 second purchase @ May 17 1,100 units @ $ 3.50 Third purchase @ May 23 700 units @ $ 3.60 Sales @ May 31 2,700 units @ $ 5.10 Determine the amount of ending inventory assuming the FIFO cost flow method.
Business
1 answer:
Anestetic [448]3 years ago
5 0

Answer:

$2,870

Explanation:

The computation of the ending inventory using FIFO cash flow method is shown below:

Closing inventory units

= Purchase units including opening inventory - sales units

where,

Purchase units = 800 units + 900 units + 1100 units + 700 units

                          = 3,500 units

And, the sales units is 2,700 units

So, the ending inventory units is 800 units

Now the ending inventory is

= Purchase units on May 23 × price on that date + Purchase units on May 17 × price on that date

= 700 units × $3.60 + 100 units × $3.50

= $2,520 + $350

= $2,870

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The 2021 income statement of Adrian Express reports sales of $20,710,000, cost of goods sold of $12,600,000, and net income of $
Verizon [17]

Answer:

Adrian Express

1. Five Profitability Ratios:

Gross profit ratio: = 39.2%

Return on assets = 20%

Profit margin = 9.6%

Asset turnover = 2.1 times

Return on equity = 37.4%

2. I think the company is:

Less profitable

than the industry average.

Explanation:

a) Data and Calculations:

Sales Revenue        $20,710,000

Cost of goods sold $12,600,000

Gross profit                $8,110,000

Net income               $1,980,000

ADRIAN EXPRESS

Balance Sheets

December 31, 2021 and 2020

                                                                          2021                  2020

Assets

Current assets:

Cash                                                              $840,000            $930,000

Accounts receivable                                     1,775,000            1,205,000

Inventory                                                      2,245,000            1,675,000

Current assets                                          $4,860,000          $3,810,000

Long-term assets                                        5,040,000            4,410,000

Total assets                                             $ 9,900,000         $8,220,000

Liabilities and Stockholders' Equity

Current liabilities                                     $ 2,074,000          $1,844,000

Long-term liabilities                                   2,526,000           2,584,000

Common stock                                          2,075,000           2,005,000

Retained earnings                                    3,225,000             1,787,000

Total Equity                                               5,300,000           3,792,000

Total liabilities & stockholders' equity   $9,900,000         $8,220,000

Industry averages for the following profitability ratios are as follows:

Gross profit ratio 45 %

Return on assets 25 %

Profit margin 15 %

Asset turnover 8.5 times

Return on equity 35 %

Gross profit ratio: = Gross profit/Sales * 100

= $8,110,000/$20,710,000 * 100

= 39.2%

Return on assets = Net income/Assets * 100

= $1,980,000/$9,900,000 * 100

= 20%

Profit margin = Net Income/Sales * 100

= $1,980,000/$20,710,000 * 100

= 9.6%

Asset turnover = Sales/Total Assets

= $20,710,000/$9,900,000 = 2.1 times

Return on equity = Net Income/Total Equity * 100

= $1,980,000/$5,300,000 * 100

= 37.4%

6 0
3 years ago
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