in Audit of Inventories and Cost of Goods Sold are to: 1. Consider internal control over inventories and cost of goods sold. 2. Determine the existences of inventories and the occurrence of transactions affecting cost of goods sold. 3. Establish the completeness of inventories. 4. Establish that the client has rights to the recorded inventories. 5. Establish the clerical accuracy of records and supporting schedules for inventories and cost of goods sold 6. Determine that the valuation
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of St. Thomas Opus College of Business P. Jane Saly University of St. Thomas Opus College of Business Introduction furniture‚ are based on classic designs that change somewhat over time. Seasonal products‚ mainly soft goods‚ upholstery‚ and small hard goods‚ change frequently. The introduction of seasonal products has become a year-round job for the company designers and buyers. Designers continually work with new color schemes‚ fabrics‚ and materials. Buyers arrange one-time purchases
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purchased inventory to be sold. An analysis of the financial data shows that current inventory turnover is at 150 days (2012: 153 days)‚ which is significantly higher than 107 days in 2007. The formula used was taken from financial data retrieved from the financial statements and was calculated as: 365/ (Cost of Goods Sold/Average Inventories) The increase in the length of time that inventory is on hand coupled with an increase in the percentage of cost of goods sold (since 2010) could be the
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complete‚ and b. measurability reasonably assured 2. Collectibility is reasonably assured “Earnings process” is substantially complete. Operational functions firm that ADD VALUE in generation of revenue Varies across different firm Eg. Produce goods→sale →collect cash→provide after sale service Contract-Based Approach Contract-Based Approach Contract is recognized when all of the following conditions are met: 1. The entity is party to the contract‚ 2. The contractual rights are
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Units Sold | Total Revenues | Radon Tests | $290 | 12‚932 | $3‚750‚280 | Lead Tests | $240 | 14‚760 | 3‚542‚400 | | | | $7‚292‚680 | 2. Rouse & Sons | 2011 Volume | Planned 2012 Selling Prices | Expected 2012 Change in Volume | Expected 2012 Volume | Radon Tests | 12‚200 | $290 | +6% | 12‚932 | Lead Tests | 16‚400 | $230 | -7% | 15‚252 | Rouse & Sons Sales Budget | For the Year Ended December 31‚ 2012 | | | | | | Selling Price | Units Sold | Total
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return (credit or cash) purchase returns (credit or cash) delivery costs = freight out Pay Supplier Buy Inventory On Credit Sell On Credit Customer Pays ‘most retailers are registered for GST’ To work out GST on a price divide the number by 11 and without GST on a price add 10% Two Inventory Systems 1. Periodic 2. Perpetual Periodic Inventory Systems * is normally used for relatively inexpensive goods Perpetual Inventory * keeps a running computerized record of
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improve his company’s operations if he better manages his inventory. Mr. Milligan requests your help in preparing an Inventory Analysis worksheet. The Inventory Analysis worksheet provides Mr. Milligan with information about his annual sales‚ cost of goods sold‚ gross profit‚ and markup on this products. Preparing the worksheet for Mr. Milligan requires you to insert columns‚ use several functions‚ and apply proper formatting to the worksheet and cells. CASE SCENARIO Ten years ago‚ David
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the yearly cost of sales. Use a 30 percent inventory carrying cost rate.) Calculate a payback period for each alternative. Pepe Jeans has 3 options: Do nothing Decrease lead time to 6 weeks Build a factory and decrease lead time to 3 months Our calculations on the attached pages. We would recommend that Pepe choose Alternative 2‚ given the increase in the yearly profits. Although alternative two has an initial investment of 1.3 million and 0.5 million in annual operating costs‚ it is still
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profit or as a measure to try to reduce cost for better profitability. It’s also helpful when determining whether you can charge enough for a new item to make it profitable. To find your gross profit margin‚ you first need to calculate your gross profit. Gross profit is the amount you have after you subtract all the costs associated with the sale: Gross profit = sales - cost of goods sold The cost of goods sold‚ or COGS‚ includes only the direct cost incurred to manufacture or sell a product
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Gaassett________________ Multiple Choice Questions *Highlight Your Answer Chapter 6 1-30. Operating income is: A. A measure of profitability after deducting cost of sales from net sales. B. A measure of profitability after deducting cost of sales and all expenses incurred in operating the business from net sales. C. A measure of liquidity after deducting cost of sales from net sales. D. The equivalent of net sales 2-35. Which of the following would not tend to make a manufacturer choose a perpetual inventory
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