The inventories disclosure note in the 2014 financial statements for SUPERVALU Inc.,
one of the largest grocery chains in the United States, included the following: “During
fiscal 2014, 2013 and 2012, inventory quantities in certain LIFO layers were reduced.
These reductions resulted in a liquidation of LIFO inventory quantities carried at lower
costs prevailing in prior years as compared with the cost of fiscal 2014, 2013 and 2012
purchases. As a result, Cost of sales decreased by $14, $6 and $9 in fiscal 2014, 2013
and 2012, respectively. All inventories are stated at the lower of cost or current market
values. Cost for inventories at the majority of our operations is determined on a last-in,
first-out (“LIFO”) basis.” Required:
What additional income tax payments did the 2014 liquidation cost SUPERVALU?
Listed below are 5 terms followed by a list of phrases that describe or characterize each
of the terms. Match each phrase with the number for the correct term.
Listed below are 5 terms followed by a list of phrases that describe or characterize each
of the terms. Match each phrase with the number for the correct term.
How are assets valued when they are acquired by issuing stock?
During Burns Company’s first year of operations, credit sales totaled $140,000 and
collections on credit sales totaled $105,000. Burns estimates that bad debt losses will be
1.5% of credit sales. By year-end, Burns had written off $300 of specific accounts as
uncollectible.
Required:
1> Prepare all appropriate journal entries relative to uncollectible accounts and bad debt
expense.
2> Show the year-end balance sheet presentation for accounts receivable.
Fowler Co.’s balance sheet showed the following at December 31, 2016:
A cash dividend is declared on December 31, 2016, and is payable on January 20, 2017,
to shareholders of record on January 10, 2017.
Listed below are five terms followed by a list of phrases that describe or characterize
each of the terms. Match each phrase with the number for the correct term.
On January 1, 2016, Morrow Inc. purchased a spooler at a cost of $40,000. The
equipment is expected to last eight years and have a residual value of $4,000. During its
eight-year life, the equipment is expected to produce 250,000 units of product. In 2016
and 2017, 42,000 and 76,000 units respectively were produced. Required:
Compute depreciation for 2016 and 2017 and the book value of the spooler at
December 31, 2016 and 2017, assuming the double-declining-balance method is used.