P10.1
For each of these three cases, determine the missing amounts indicated by question marks.
P10.2
Data from Trail Bikes, Inc.'s perpetual inventory records for a tire it produces and sells follow:
The company sold 53,000 tires during the year at $20 each.
Required:
A. Compute the cost of the ending inventory and the cost of goods sold using both FIFO and LIFO.
B. In your opinion, which of the two methods is a better representation of the balance sheet value for the inventory? Why?
C. What is the gross margin using each method?
D. Which method do you think is more representative of the firm's income? Why?
CT10.1
Hightech Company offers its customers credit terms of 2/10, n/30. Most customers take advantage of the cash discount, mailing their payments to arrive on the 10th day following the date of the invoice. However, Lowmart Company, Hightech's largest customer, has recently begun sending payments to arrive on the 30th day after invoice, while still taking the 2 percent discount. Hightech's collection department has been in touch with Lowmart regarding the taking of the discount outside the discount period, and Lowmart's response is that it deserves to take the discount whenever payment is made. After all, it is Hightech's biggest customer.
Required: -Identify Hightech's possible courses of action as well as the consequences of these actions.
CT10.2
Xanetics, Inc., recently received a $150,000 special order from Lartech, Inc., for some customized equipment. A 50 percent deposit accompanied the order, with the remaining $75,000 payment to be made at delivery. Xanetics manufactured the equipment and was ready to ship it to Lartech when it was notified that Lartech had declared bankruptcy.
Required:
-Identify the accounting issues related to the above scenario.
-Has Xanetics earned a revenue?
-Has it been realized?
-Should the company recognize any revenue?
C10.1-Refer to"Panera Bread" Company.
-Based on your knowledge of this company, answer the following:
A. Estimate the cash received from customers.
B. Calculate the inventory turnover.
C. Calculate the accounts receivable turnover.
D. Calculate the accounts payable turnover.
E. What additional information is provided in the notes concerning revenue recognition, uncollectible accounts, and the company's inventory costing method?