ACCT 201

FA 21
Chapter 6 Practice Homework

Exercise 6-2 (Static) Inventory costs LO C1

Walberg Associates, antique dealers, purchased goods for $75,000. Terms of the
purchase were FOB shipping point, and the cost of transporting the goods to Walberg
Associates’ warehouse was $2,400. Walberg Associates insured the shipment at a cost
of $300. Prior to putting the goods up for sale, they cleaned and refurbished them at a
cost of $980.

Determine the cost of inventory.

Cost of inventory
Price $75,000
Transportation-in
Insurance on shipment
Cleaning and refurbishing
Total cost of inventory

Exercise 6-6A
Laker Company reported the following January purchases and sales data for its only
product. The Company uses a perpetual inventory system. For specific identification,
ending inventory consists of 180 units from the January 30 purchase, 5 units from the
January 20 purchase, and 15 units from beginning inventory.
 
Date Activities Units Acquired at Cost Units sold at Retail
Beginning
January 1 140 units @ $ 6.00 =       
inventory
January
Sales         100 units @$ 15
10
January
Purchase 60 units @ $ 5.00 =       
20
January
Sales         80 units @$ 15
25
January
Purchase 180 units @ $ 4.50 =       
30
  Totals 380 units       0 units    
rev: 10_2020_QC_CS-232448
 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average,
and (d) specific identification.

FIFO
Cost of Goods Available for
Cost of Goods Sold Ending Inventory
Sale
Cost of
# of Cost Cost of # of units
# of Cost Goods Cost per
units per Goods in ending Ending Inventory
units per unit Available unit
sold unit Sold inventory
for Sale
Beginning
inventory 140 6 840 140 6 840
Jan 1
Purchases:
Jan 20 60 5 300 40 5 200 20 5 100
Jan 30 180 4.50 810 180 9.50 810
Total 1950 180 1040 200 910

LIFO
Cost of Goods Available for
Cost of Goods Sold Ending Inventory
Sale
Cost of
# of Cost Cost of # of units
# of Cost Goods Cost per
units per Goods in ending Ending Inventory
units per unit Available unit
sold unit Sold inventory
for Sale
Beginning
inventory 140 6 840
Jan 1
Purchases:
Jan 20 60 5 200
Jan 30 180 4.50 816
Total 380 1950 180

Weighted Average / Average Cost

Cost of Goods Available for
Cost of Goods Sold Ending Inventory
Sale
# of Cost Cost of # of Cost Cost of # of units Cost per Ending Inventory
units per unit Goods units per Goods in ending unit
 Available
sold unit Sold inventory
for Sale
Beginning
inventory
Jan 1
Purchases:
Jan 20
Jan 30
Total

Specific Identification method

Cost of Goods Available for
Cost of Goods Sold Ending Inventory
Sale
Cost of
# of Cost Cost of # of units
# of Cost Goods Cost per
units per Goods in ending Ending Inventory
units per unit Available unit
sold unit Sold inventory
for Sale
Beginning
inventory
Jan 1
Purchases:
Jan 20
Jan 30
Total

Problem 6-2AA Periodic:

 
Warner woods Company uses a periodic inventory system. It entered into the following purchases and sales
transactions for March.
 
  Date Activities Units Acquired at Cost Units Sold at Retail
  Mar. 1  Beginning inventory   100 units @ $50.00 per unit       
  Mar. 5  Purchase   400 units @ $55.00 per unit       
  Mar. 9  Sales          420 units @ $85.00 per unit
  Mar. 18  Purchase   120 units @ $60.00 per unit       
  Mar. 25  Purchase   200 units @ $62.00 per unit       
  Mar. 29  Sales          160 units @ $95.00 per unit
       Totals   820 units    580 units 

 
For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the
March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the
March 25 purchase

Problem 6-2A
Required.
1. Compute cost of goods available for sale and the number of units available for sale.

2. Compute the number of units in ending inventory.

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific
identification.

C_CS-232448