XXCanucksXX Posted June 22, 2020 Share Posted June 22, 2020 (edited) Would anyone be able to help me understand a question (or how the answer came to be) for my Accounting Homework. The professor just... isn't concise. Need to learn how to do this part for finals! How are the payments for inventory $140,000 and how can we figure this out? The formula (2nd picture) does not add upto $140,000 Edited June 22, 2020 by XXCanucksXX Link to comment Share on other sites More sharing options...
Gurn Posted June 22, 2020 Share Posted June 22, 2020 Link to comment Share on other sites More sharing options...
Crabcakes Posted June 23, 2020 Share Posted June 23, 2020 I bet you know how to do it. You're just not factoring in all of your payables. Link to comment Share on other sites More sharing options...
-AJ- Posted June 23, 2020 Share Posted June 23, 2020 Are you including both the note payable and the accounts payable in your AP calculations? 1 Link to comment Share on other sites More sharing options...
BoKnows Posted June 23, 2020 Share Posted June 23, 2020 We already know where $25 000 of it is. We just have to find $115 000 of it. We know cogs is $154 000, and Beginning inventory is $66 000. It doesn't give us net purchases or the info needed to calculate net purchases. With out net purchases we can't calculate purchases. I ran into the same issue when calculating the second formula. I have no way of figuring out what the end year A/P is supposed to be. Keep in mind I've only completed intro to financial, and managerial accounting courses. My knowledge is limited, someone else on here may have a way of figuring it out. Link to comment Share on other sites More sharing options...
-AJ- Posted June 23, 2020 Share Posted June 23, 2020 2 minutes ago, BoKnows said: We already know where $25 000 of it is. We just have to find $115 000 of it. We know cogs is $154 000, and Beginning inventory is $66 000. It doesn't give us net purchases or the info needed to calculate net purchases. With out net purchases we can't calculate purchases. I ran into the same issue when calculating the second formula. I have no way of figuring out what the end year A/P is supposed to be. Keep in mind I've only completed intro to financial, and managerial accounting courses. My knowledge is limited, someone else on here may have a way of figuring it out. Year end AP I assume is the 2020 figures. Link to comment Share on other sites More sharing options...
BoKnows Posted June 23, 2020 Share Posted June 23, 2020 (edited) 3 minutes ago, -AJ- said: Year end AP I assume is the 2020 figures. Yeah you're right. That'll make the 2019 figure beginning A/P. Same with inventory as well. Edited June 23, 2020 by BoKnows 1 Link to comment Share on other sites More sharing options...
coastal.view Posted June 23, 2020 Share Posted June 23, 2020 darn i was just about to suggest factoring in employee fraud and siphoning of enough cash to get your inventory expense to the 140K range i clearly know more about crime then accounting please disregard my post 2 Link to comment Share on other sites More sharing options...
CBH1926 Posted June 23, 2020 Share Posted June 23, 2020 COGS 154-accrued liabilities +inventory 66k-62k=140k 1 Link to comment Share on other sites More sharing options...
CBH1926 Posted June 23, 2020 Share Posted June 23, 2020 4 minutes ago, CBH1926 said: COGS 154-accrued liabilities +inventory 66k-62k=140k Disclaimer I had some hard ciders after dinner. Link to comment Share on other sites More sharing options...
Zfetch Posted June 23, 2020 Share Posted June 23, 2020 154k + 66k - 62k = 158k +40k + 14k = 212k -47k - 25k = 140k try removing the comma you put in (woozy face) 1 1 Link to comment Share on other sites More sharing options...
BoKnows Posted June 23, 2020 Share Posted June 23, 2020 28 minutes ago, CBH1926 said: COGS 154-accrued liabilities +inventory 66k-62k=140k I did that and figured there was no way that was right. No logic behind it except adding and subtracting numbers until $140 000 appeared . 8 minutes ago, Zfetch said: 154k + 66k - 62k = 158k +40k + 14k = 212k -47k - 25k = 140k try removing the comma you put in (woozy face) I think this is it. Thanks it was bugging me that I couldn't solve it. Why are adding the liabilities back on though? I don't understand the reasoning behind that. Link to comment Share on other sites More sharing options...
Tre Mac Posted June 23, 2020 Share Posted June 23, 2020 Sigh this is why I am reluctant to go back to school. It's even worse when it's a question from like grade 10 math and I still don't have a clue. 1 Link to comment Share on other sites More sharing options...
Zfetch Posted June 23, 2020 Share Posted June 23, 2020 2 minutes ago, BoKnows said: I did that and figured there was no way that was right. No logic behind it except adding and subtracting numbers until $140 000 appeared . I think this is it. Thanks it was bugging me that I couldn't solve it. Why are adding the liabilities back on though? I don't understand the reasoning behind that. It's asking for the 2020 figure. You gotta account 2019 figures to account for the change over the two years. 1 Link to comment Share on other sites More sharing options...
coho8888 Posted June 23, 2020 Share Posted June 23, 2020 Easier way to look at it is this: Your ending inventory is 4,000 greater than your beg. inventory. Your COGS is 154,000. So you bought 154,000+4,000 = 158,000 worth of inventory for the year whether you paid by cash or credit. Now both Notes Payable and Accounts Payable are due to inventory and both went up compared to the beginning of the year by a combined 18,000. So basically 18,000 is paid for by credit and the remaining inventory of 158,000 - 18,000 = 140,000 was paid for by Cash Payment 1 Link to comment Share on other sites More sharing options...
-AJ- Posted June 23, 2020 Share Posted June 23, 2020 1 hour ago, Tre Mac said: Sigh this is why I am reluctant to go back to school. It's even worse when it's a question from like grade 10 math and I still don't have a clue. Unless you learned accounting in school, it's unlikely this would be something that would be intuitive. It looks like 1st or 2nd year university accounting to me. Relatable comment though. I'm heading back to continue my CPA in July and will have to relearn a lot of things, which certainly won't be easy. 1 Link to comment Share on other sites More sharing options...
XXCanucksXX Posted June 23, 2020 Author Share Posted June 23, 2020 Was NOT expecting this many responses but thanks guys! I was stuck on this Part B forever! 3 hours ago, Tre Mac said: Sigh this is why I am reluctant to go back to school. It's even worse when it's a question from like grade 10 math and I still don't have a clue. This isn't grade 10 math sadly lol. There's always a few difficult questions in every chapter but you should have enough examples to figure out and understand most parts. Main thing is asking for help when you need it, better to ask than to waste hours like I did. 1 Link to comment Share on other sites More sharing options...
-AJ- Posted June 23, 2020 Share Posted June 23, 2020 1 hour ago, XXCanucksXX said: Was NOT expecting this many responses but thanks guys! I was stuck on this Part B forever! This isn't grade 10 math sadly lol. There's always a few difficult questions in every chapter but you should have enough examples to figure out and understand most parts. Main thing is asking for help when you need it, better to ask than to waste hours like I did. Even accountants can be hockey fans, haha. 1 1 Link to comment Share on other sites More sharing options...
HKSR Posted June 23, 2020 Share Posted June 23, 2020 Never in a million years would I have thought a post would show up on CDC where I could step in and put my CA designation to use... I was all excited, but then realized that I still can't because others have replied before me. When will this education pay off?!?! WHEN?!! 2 Link to comment Share on other sites More sharing options...
Dekey Pete Posted June 23, 2020 Share Posted June 23, 2020 A lot of accountants here apparently. Link to comment Share on other sites More sharing options...
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