Professional Documents
Culture Documents
a) The cost of goods available for sale is $14,442 The management follows perp
Inventory: 26 units @ $97 $2,522
Purchases: 12-Sep 45 units @ $102 $4,590
19-Sep 20 units @ $104 $2,080
26-Sep 50 units @ $105 $5,250
Total: 141 $14,442
FIFO Method
Ending Inventory:
Date Units Unit Cost Total Cost
26-Sep 20 $105 $2,100
Cost of goods sold: $14,442-$2,100 = $12,342
LIFO Method
Ending Inventory:
Date Units Unit Cost Total Cost
1-Sep 20 $97 $1,940
Cost of goods sold: $14,442-$1,940 = $12,502
b)
FIFO Method
Ending inventory + Cost of Goods Sold $ 14,442
LIFO Method Same
Ending inventory + Cost of Goods Sold $ 14,442
E6-14
a) b)
Sooner Company Later Company moves more quickly
Average inventory $ 50,000
Inventory turnover 3.8
Days in invetory 96.0526315789474
Later Company
Average inventory $ 70,000
Inventory turnover 4.17142857142857
Days in invetory 87.5
P6-5A
a)
The cost of goods available for sale is $10,085, as follows Weighted_average cost per unit
Inventory 1-Jun 40 units @ $40 $ 1,600
Purchases 4-Jun 135 units @ $43 $ 5,805
18-Jun 55 units @ $46 $ 2,530 Date Explanation
18-Jun (10 units @ $46) $ (460) 10-Jun Sale
28-Jun 35 units @ $35 $ 1,750 11-Jun Sale Return
Total 255 $ 11,225 25-Jun Sale
LIFO
Ending Inventory Cost of Goods So
Date Units Unit Cost Total Cost Explanation
1-Jun 40 $40 $1,600 Cost of Goods Available for sa
4-Jun 55 $43 $2,365 Less: Ending Inventory
Total: 95 $3,965
FIFO
Ending Inventory Cost of Goods So
Date Units Unit Cost Total Cost Explanation
28-Jun 35 $50 $1,750 Cost of Goods Available for sa
18-Jun 55 $46 $2,530 Less: Ending Inventory
4-Jun 5 $43 $215
Total: 95 $2,745
Gross profit
Gross Profit Rate 26.8334771354616 Explanation
Sales Revenue
Cost of Goods Sold
E4-17
a)
FIFO
Date Explanation Units Unit Cost Total Cost
1-Sep Beginning Inventory 26 $97 $2,522
5-Sep Sale 12 $199 $2,388
12-Sep Purchases 45 102 $4,590
16-Sep Sale 50 199 $9,950
19-Sep Purchases 20 104 2,080
26-Sep Purchases 50 105 5,250
29-Sep Sale 59 209 12,331
he management follows perpetual and periodic inventory systems to know how much stock must be ordered from the results of the calcu
Gross profit
Explanation Unit Costs
Sales Revenue 11,590
Cost of Goods Sold 7,260
Gross profit 4,330
Gross profit
Explanation Unit Costs
Sales Revenue 11,590
Cost of Goods Sold 8,480
Gross profit 3,110
om the results of the calculations. There are perpetual LIFO, FIFO methods to calculate the closing stock. The only difference between the
e only difference between the FIFO and LIFO methods regarding the closing stock is regarding sales. Under perpetual FIFO and LIFO, two en
erpetual FIFO and LIFO, two entries are made by the company, and periodic LIFO and FIFO consist of a single entry. But in both cases inven
entry. But in both cases inventory account will be debited, and COGS is credited. Hence, the results are the same under these two metho
same under these two methods