1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
algol [13]
2 years ago
12

Partial income statements for Sherwood Company summarized for a four-year period show the following: 1. Restate the partial inco

me statements to reflect the correct amounts, after fixing the inventory error.2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction.2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts? 29,000.
Business
1 answer:
OlgaM077 [116]2 years ago
4 0

Answer:

1. The corrected gross profit are as follows:

2015 = $704,000

2016 = $836,000

2017 = $859,000

2018 = $1,024,000

2-a  Gross profit percentage before and after correction are as follows:  

Particulars                2015     2016       2017      2018

Before correction      32%       33%        31%        32%

After correction         32%       32%        32%        32%

2-b. Yes. This is because the gross profit percentage for the years are approximately the same at 32% after the correction was made.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Partial income statements for Sherwood Company summarized for a four-year period show the following:

                          2015             2016                  2017                  2018

Net Sales     $2,200,000   $2,600,000    $2,700,000      $3,200,000

COGS           <u>   1,496,000  </u>   <u>    1,742,00</u>      <u>  1,863,000</u>       <u>   2,176,000</u>

Gross Profit  <u>   $704,000  </u>    <u> $858,000  </u>   <u>  $837,000   </u>    <u> $1,024,000 </u>

An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $22.000. The inventory balance on December 31, 2017, was accurately stated. The company uses a periodic inventory system.

Required: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error, 2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction 2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts?

The explanation of the answer is now given as follows:

1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error

Note: See the attached excel file for the fixing the inventory error and the restated partial income statements to reflect the correct amounts, after fixing the inventory error.

The effect of the overstatement of closing inventory is reducing the 2016 cost of goods sold. To correct this in the attached excel file, the opening balance is reduced by $22,000 and this makes cost of goods sold of 2016 to increase and the cost of goods sold of 2017 to decrease by $22,000.

2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction

Note: See the attached excel file for the computed the gross profit percentage for each year (a) before the correction and (b) after the correction.

In the attached excel file, the following formula is used:

Gross Profit percentage = Gross profit / Net Sales) * 100

2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts?

Yes. This is because the gross profit percentage for the years are approximately the same at 32% after the correction was made.

Download xlsx
You might be interested in
Do you think the NELK BOYS are clickbaiting sometimes?
harkovskaia [24]

Answer:

Ummm... yes

Explanation:

8 0
3 years ago
Each day, Tasty Tortilla Company incurs total costs of $8,000 to process flour into tortillas. The company can sell the tortilla
Murljashka [212]

Answer:

c. The firm will make an additional $4200 in income per day if it sells taco shells instead of tortillas.

Explanation:

Tortilla daily revenue: $8000

Tortilla daily cost: $22500

Taco shell daily revenue: $26,700

Taco shell daily cost: $8000 + $4200 = 12200

Additional income if Taco Shells sold instead of Tortillas: $26,700 - 22,500 = $4200

3 0
3 years ago
William (71), a retired single taxpayer, received a monthly pension of $2,500 ($30,000 annually). He did not contribute any afte
IceJOKER [234]

Based on the information given, it should be noted that the amount of William's pension distribution that is taxable is $30000.

From the information given, William is a retired single taxpayer and he received a monthly pension of $2,500 ($30,000 annually). He did not contribute any after-tax dollars to the plan.

It should be noted that pension is counted as a regular income for tax purposes. Therefore, the pension that'll be received by William will be a taxable income

Therefore, the taxable amount will be $30000.

Learn more about taxes on:

brainly.com/question/1657264

4 0
2 years ago
Do you feel that it is ethical and/or appropriate to utilize a "Bottom of the Pyramid" strategy where you make money off the wor
Rudik [331]

Answer:

Explanation:

The Bottom of the Pyramid strategies focuses on improving widespread poverty while providing profits and growth for multinational companies at the same time. With this definition, it is an ethical business model because it the companies are profiting but at the same time those at the bottom of the pyramid are benefiting, usually from having jobs. It would be unethical if these companies were simply taking from the individuals at the bottom of the pyramid.

3 0
3 years ago
The balance shown in the August bank statement of Colt Company was $23,200 before the bank reconciliation was prepared. After ex
anastassius [24]

Answer:

The answer is letter D

Explanation:

$20.600

5 0
3 years ago
Other questions:
  • Computer Consultants Inc. is considering a project that has the following cash flow and cost of capital (r) data. What is the pr
    9·1 answer
  • Whats 59667.7×457284.9÷6789324.2
    13·1 answer
  • Economic growth in the country of Southville has slowed down in the last few months. Following a collapse in housing​ prices, se
    8·1 answer
  • Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called:
    13·1 answer
  • How might taxes have an impact on your financial plan?
    5·1 answer
  • Under the allowance method, a.bad debt expense is recorded when specific customer accounts are determined to be uncollectible. b
    11·1 answer
  • Services from health care to education are provided to people by the government. This is an example of _____.
    11·1 answer
  • What are the concerns in cash management, and how does cash management iss help financial managers?
    6·1 answer
  • A process cost system would be used for all of the following products except computer chips. motion pictures. chemicals. soft dr
    8·1 answer
  • in 2022, a taxpayer (with $26,500 of employee compensation) was allocated $176,000 of self-employment income. calculate the amou
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!