Grants corporation prepared the following two income statements (simplified for illustrative purposes): first quarter second quarter sales revenue $ 11,000 $ 18,000 cost of goods sold beginning inventory $ 4,000 $ 3,800 purchases 3,000 13,000 goods available for sale 7,000 16,800 ending inventory 3,800 9,000 cost of goods sold 3,200 7,800 gross profit 7,800 10,200 expenses 5,000 6,000 pretax income $ 2,800 $ 4,200 during the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,400. required:
1. what effect did this error have on the combined pretax income of the two quarters?
2. which quarter's or quarters' (if any) eps amounts were affected by this error?
3. prepare corrected income statements for each quarter.
4. prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement.

Afirm that makes electronic circuits has been ordering a certain raw material 250 ounces at a time. the firm estimates that carrying cost is i = 30% per year, and that ordering cost is about $20 per order. the current price of the ingredient is $200 per ounce. the assumptions of the basic eoq model are thought to apply. for what value of annual demand is their action optimal?

Exercise 8-6 goods in transit [lo8-2] the kwok company's inventory balance on december 31, 2016, was $190,000 (based on a 12/31/16 physical count) before considering the following transactions: 1. goods shipped to kwok f.o.b. destination on december 20, 2016, were received on january 4, 2017. the invoice cost was $35,000. 2. goods shipped to kwok f.o.b. shipping point on december 28, 2016, were received on january 5, 2017. the invoice cost was $22,000. 3. goods shipped from kwok to a customer f.o.b. destination on december 27, 2016, were received by the customer on january 3, 2017. the sales price was $45,000 and the merchandise cost $27,000. 4. goods shipped from kwok to a customer f.o.b. destination on december 26, 2016, were received by the customer on december 30, 2016. the sales price was $25,000 and the merchandise cost $18,000. 5. goods shipped from kwok to a customer f.o.b. shipping point on december 28, 2016, were received by the customer on january 4, 2017. the sales price was $30,000 and the merchandise cost $17,000. required: determine the correct inventory amount to be reported in kwok's 2016 balance sheet.

Uestion 7 you hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. the portfolio beta is equal to 1.12. you have decided to sell a coal mining stock (b = 1.00) at $5,000 net and use the proceeds to buy a like amount of a mineral rights company stock (b = 2.00). what is the new beta of the portfolio?