SOLUTION:

STEPHANIE COMPANY

1. What is the ending inventory on July 31?

SOLUTION:

UNITS UNIT COST TOTAL COST

Jul. 1 20,000 36 720,000
Jul. 7 30,000 37 1,110,000
Jul. 21 40,000 37.88 1,894,000
Jul. 29 16,000 38.11 604,000
Total (4,333,760/116,000) 116,000 37.36 4,333,760
Sales (36,000+38,000) (74,000)
Ending inventory 42,000 37.36 1,569,120

JULIUS COMPANY

2. What is the ending inventory of Aye Company?

SOLUTION:

UNITS COST
Jan. 1 8,000 240,000
Purchases 25,000 816,000
Goods available for sale 33,000 1,056,000
Ending inventory (1,056,000/33,000 = 32), (32x10,000) 320,000

3. What is the ending inventory of Bee Company?

SOLUTION:

SALES PRICE FRACTION COST

Class A (25x400,000) 10,000,000 10/20 6,250,000
Class B (30x300,000) 9,000,000 9/20 5,625,000
Class C (10x100,000) 1,000,000 1/20 625,000
total 20,000,000 12,500,000

COST PER LOT UNSOLD COST

Class A (6,250,000/25) 250,000 15 3,750,000
Class B (5,625,000/30) 187,500 6 1.125,000
Class C (625,000/10) 62,500 3 187,500
Ending inventory 5,062,500
4. What is the ending inventory of Cee Company?
SOLUTION:
Inventory-per book – 1,960,000
Beds received-dec.20,2014 (recorded-jan.2,2-14) – 900,00
Beds received (recorded twice) – (190,000)
Beds shipped FOB-dec.28,2013 – (700,000)
Beds on hand (not recorded) – (230,000)
Correct Inventory = 2,200,000