TUTORIAL TEST 07

Question 8.1

Danny’s YoYos sells high quality yoyos. The inventory, purchases, and sales for a recent month
in chronological order are as follows:

Date Activities Units Acquired and Sold

Oct 1 Beginning inventory 100 units @ $5.50 per unit
Oct 4 Sales 20 units
Oct 7 Purchase 165 untis @ $5.95 per unit
Oct 10 Sales 180 units
Oct 16 Purchase 40 units @ $6.25 per unit
Oct 28 Sales 50 units

Assume that Danny’s YoYos uses a perpetual inventory system.

Requirements
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. Moving average

Question 8.2

Big Shoe Company sells several different categories of shoes. The following inventory data
available at year-end is available for their leisure shoe category of shoes:

Market Value per Unit

Inventory item Inventory Cost per
Quantity Unit (Net Realizable Value)
Running Shoes 280 $ 48.00 $ 40.00
Walking Shoes 190 56.00 58.00
Golf Shoes 80 68.00 70.00

Requirements:

Determine the value of the leisure shoe category of inventory at the lower of cost or market.