The following data (in thousands) were taken from recent annual reports of Apple Inc., a manufacturer of personal computers and related products, and American Greetings Corporation, a manufacturer and distributor of greeting cards and related products:

$$\begin{array}{lrr} & \textbf { Apple } & \textbf { American Greetings } \\ \hline \text { Cost of goods sold } & \$ 39,541,000 & \$ 682,368 \\ \text { Inventory, end of year } & 1,051,000 & 179,730 \\ \text { Inventory, beginning of the year } & 455,000 & 163,956 \end{array}$$

Determine the inventory turnover for Apple and American Greetings. Round to one decimal place.

Why is it important to periodically take a physical inventory when using a perpetual inventory system?

The beginning inventory at RTE Office Supplies and data on purchases and sales for a three-month period are shown in Problem 6-1A.

Instructions

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost as of August 31, 2014.

Three identical units of Item Alpha are purchased during February, as shown below.

$$\begin{array}{lllcr} & & \text { Item Alpha } & \text { Units } & \text { Cost } \\ \hline \text { June } & 2 & \text { Purchase } & 1 & \$~~50 \\ & 12 & \text { Purchase } & 1 & 60 \\ & 23 & \text { Purchase } &\underline1& \underline{~~~~70} \\ &\text{Total}&&\underline{\underline{3}}&\underline{\underline{\$180}}\\ &\text{Average cost per unit}&&&\underline{\underline{\$~~60}}&(\$180\div3\text{ units}) \end{array}$$

Assume that one unit is sold on June 27 for $110.

Determine the gross profit for June and ending inventory on June 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods.

Three identical units of Item Alpha are purchased during February, as shown below.

$$\begin{array}{lllcr} & & \text { Item Alpha } & \text { Units } & \text { Cost } \\ \hline \text { Feb. } & 9 & \text { Purchase } & 1 & \$~~40 \\ & 17 & \text { Purchase } & 1 & 42 \\ & 26 & \text { Purchase } &\underline1& \underline{~~~~44} \\ &\text{Total}&&\underline{\underline{3}}&\underline{\underline{\$126}}\\ &\text{Average cost per unit}&&&\underline{\underline{\$~~42}}&(\$126\div3\text{ units}) \end{array}$$

Assume that one unit is sold on February 28 for $75.

Determine the gross profit for February and ending inventory on February 28 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods.

During 2014, the accountant discovered that the physical inventory at the end of 2013 had been understated by $33,000. Instead of correcting the error, however, the accountant assumed that the error would balance out (correct itself) in 2014.

Are there any flaws in the accountant’s assumption? Explain.

Kickstand Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 2014, Kickstand Motorcycle Shop incorrectly counted its inventory as $640,500 instead of the correct amount of$618,900.

d. If uncorrected, what would be the effect of the error on the December 31, 2015, balance sheet?

Kickstand Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 2014, Kickstand Motorcycle Shop incorrectly counted its inventory as $640,500 instead of the correct amount of$618,900.

c. If uncorrected, what would be the effect of the error on the 2015 income statement?

Kickstand Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 2014, Kickstand Motorcycle Shop incorrectly counted its inventory as $640,500 instead of the correct amount of$618,900.

b. State the effect of the error on the income statement of Kickstand Motorcycle Shop for the year ended December 31, 2014.

Kickstand Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 2014, Kickstand Motorcycle Shop incorrectly counted its inventory as $640,500 instead of the correct amount of$618,900.

a. State the effect of the error on the December 31, 2014, balance sheet of Kickstand Motorcycle Shop.

Yellowstone River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2014, Yellowstone River Supply incorrectly counted its inventory as $324,650 instead of the correct amount of$338,500.

d. If uncorrected, what would be the effect of the error on the December 31, 2015, balance sheet?

The number of disk drives (in millions) made at a plant in Taiwan during the past 5 years follows:

Compute the mean squared error (MSE) when using linear regression.

Yellowstone River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2014, Yellowstone River Supply incorrectly counted its inventory as $324,650 instead of the correct amount of$338,500.

c. If uncorrected, what would be the effect of the error on the 2015 income statement?

Yellowstone River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2014, Yellowstone River Supply incorrectly counted its inventory as $324,650 instead of the correct amount of$338,500.

b. State the effect of the error on the income statement of Yellowstone River Supply for the year ended December 31, 2014.