A flash flood swept through FMB, Inc.’s warehouse on May 1. After the flood, FMB’s accounting records showed the following: Inventory, January 1  $   98,000 Purchases, January 1 through May 1  $ 450,000 Sales, January 1 through May 1  $ 500,000 Inventory not damaged by flood  $   45,000 Gross profit percentage on sales 45% What amount of inventory was lost in the flood?

On February 1, 2020, Carskadon Corporation factored receivables with a carrying amount of $350,000 to Leather Company. Leather Company assesses a finance charge of 4% of the receivables and retains 6% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Carskadon Corporation for February. Assume that Carskadon factors the receivables on a without recourse basis. The loss to be reported is

A flash flood swept through FMB, Inc.’s warehouse on May 1. After the flood, FMB’s accounting records showed the following: Inventory, January 1  $   35,000 Purchases, January 1 through May 1  $ 200,000 Sales, January 1 through May 1  $ 250,000 Inventory not damaged by flood  $   30,000 Gross profit percentage on sales 40% What amount of inventory was lost in the flood?

The net amount reported for short-term receivables is not affected when a specific account receivable is determined to be uncollectible.

On February 1, 2020, Rowdy Corporation factored receivables with a carrying amount of $620,000 to Allen Company. Allen Company assesses a finance charge of 4% of the receivables and retains 7% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Rowdy Corporation for February. Assume that Rowdy factors the receivables on a with recourse basis. The recourse obligation has a fair value of $3,600. The loss to be reported is

A flash flood swept through FMB, Inc.’s warehouse on May 1. After the flood, FMB’s accounting records showed the following: Inventory, January 1  $   45,000 Purchases, January 1 through May 1  $ 145,000 Sales, January 1 through May 1  $ 200,000 Inventory not damaged by flood  $   20,000 Gross profit percentage on sales 45% What amount of inventory was lost in the flood?

In preparing its bank reconciliation for the month of April 2020, Dak Industries has the following information available. Balance per bank statement, 4/30/20  $         97,541 NSF check returned with 4/30/20 bank statement  $              625 Deposits in transit, 4/30/20  $         16,574 Outstanding checks, 4/30/20  $         12,845 Bank service charges for April  $                51 What should be the correct balance of cash at April 30, 2020?

Which of the following statements is false regarding an assumption of inventory cost flow?

LIFO liquidation often distorts net income, but usually leads to substantial tax savings.

Lee Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2020. Andrea Spain, controller for Lee, has gathered the following data concerning inventory. At May 31, 2020, the balance in Lee’s Raw Materials Inventory account was $448,800, and Allowance to Reduce Inventory to Market had a credit balance of $29,690. Spain summarized the relevant inventory cost and market data at May 31, 2020, in the schedule below. Spain assigned Peter DeGabriel, an intern from a local college, the task of calculating the amount that should appear on Lee’s May 31, 2020, financial statements for inventory at lower-of-cost-or-market as applied to each item in inventory. DeGabriel expressed concern over departing from the historical cost principle. Assume Lee uses LIFO inventory costing. Cost Replacement Cost Sales Price Net Realizable Value Normal Profit Aluminum siding $77,000 $68,750 $70,400 $61,600 $5,610 Cedar shake siding $94,600 $87,340 $103,400 $93,280 $8,140 Louvered glass doors $123,200 $136,400 $205,040 $185,130 $20,350 Thermal windows $154,000 $138,600 $170,280 $154,000 $16,940 Total $448,800 $431,090 $549,120 $494,010 $51,040   Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2020. Do NOT use a dollar sign ($) in your answer. Balance in the Allowance to Reduce Inventory to Market $[1]   For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market. Do NOT use a dollar sign ($) in your answer. Indicate loss with either parenthesis or a negative sign (-). The amount of gain (loss) $[2]