4. Keen Company\'s accounting records indicated the following information Invent

Question

4. Keen Company's accounting records indicated the following information Inventory, 1/1/17 Purchases during 2017 Sales during 2017 S 1,800,000 9,000,000 11,400,000 A physical inventory taken on December 31, 2017, resulted in an ending inventory of $2,100,000. Keen's gross profit on sales has remained costant at 25% in recent years. Keen suspects some inventory may have been taken by a new employee. At December 31, 2017, what is the estimated cost of missing inventory? $150,000 b. $450,000. c. $600,000. d. $750,000. a At December 31, 2017, the following information was available from Kohl Co.'s accounting records: 5. S 203,000 1,155,000 Inventory, 1/1/17 Purchases Additional markups Available for sale $147,000 833,000 $1.400,000 Sales for the year totaled $1,250,000. Markdowns amounted to $10,000. Under the lower- of-cost-or-market method, Kohl's inventory at December 31, 2017 was a. $294,000. b. $112,000. c. $105,000. d. $98,000. 6, A depreciable asset has an estimated 15% salvage value. At the end of its estimated useful life, the book value would equal the salvage value of the asset under which of the following depreciation methods? Productive Output Straight-line Yes Yes No No No Yes Yes No a. b. d. When a plant asset is acquired by issuance of common stock, the cost of the plant asset is properly measured by the a. market value of the stock. b. stated value of the stock c. book value of the stock. d. par value of the stock

Explanation / Answer

Solution - 4:

Opening inventory = $1,800,000

Purchases = $9,000,000

Sales = $11,400,000

GP Ratio = 25%

Cost of Goods Sold = $11,400,000 - (11,400,00-*25%) = $8,550,000

Required closing stock = Opening stock + Purchases - Cost of goods sold

= $1,800,000 + $9,000,000 - $8,550,000 = $2,250,000

Actual closing stock = $2,100,000

Missing Inventory = $2,250,000 - $2,100,000 = $150,000

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