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Homework answers / question archive / 1)Determine the ending inventory using the periodic inventory system and the LIFO inventory method: Date Item Units Cost Total June 1 Beginning Inventory 6 $5 $30 June 12 Purchase 10 $6 $60 June 18 Purchase 8 $7 $56 Totals 24 - $146 Assume that 18 units were sold at a sales price of $14
1)Determine the ending inventory using the periodic inventory system and the LIFO inventory method:
Date |
Item |
Units |
|
Cost |
|
Total |
|
June 1 |
Beginning Inventory |
6 |
|
$5 |
|
$30 |
|
June 12 |
Purchase |
10 |
|
$6 |
|
$60 |
|
June 18 |
Purchase |
8 |
|
$7 |
|
$56 |
|
|
Totals |
24 |
|
- |
|
$146 |
|
Assume that 18 units were sold at a sales price of $14.
LIFO |
|
2 Determine the ending inventory using the periodic inventory system and the weighted average cost method (rounded to the closest cent):
Date |
Item |
Units |
|
Cost |
|
Total |
|
June 1 |
Beginning Inventory |
6 |
|
$5 |
|
$30 |
|
June 12 |
Purchase |
10 |
|
$6 |
|
$60 |
|
June 18 |
Purchase |
8 |
|
$7 |
|
$56 |
|
|
Totals |
24 |
|
- |
|
$146 |
|
Assume that 18 units were sold at a sales price of $14.
Weighted Average |
|
3 Determine the cost of merchandise sold for the transaction on October 25 using the perpetual inventory system and the FIFO method.
Date |
Item |
Units |
|
Cost |
|
Total |
|
|
Beginning Inventory |
5 |
|
$10 |
|
$50 |
|
October 4 |
Purchase |
8 |
|
$11 |
|
$88 |
|
October 8 |
Sale |
6 |
|
|
|
|
|
October 20 |
Purchase |
15 |
|
$12 |
|
$180 |
|
October 25 |
Sale |
12 |
|
|
|
|
|
Date |
Sale/Cost of Merchandise |
Purchase |
Inventory |
|
|
|
5 × $10 = $50 |
October 4 |
|
8 × $11 = $88 |
5 × $10 = $50 8 × $11 = $88 |
October 8 |
5 × $10 = $50 1 × $11 = $11 |
|
7 × $11 = $77 |
October 20 |
|
15 × $12 = $180 |
7 × $11 = $77 15 × $12 = $180 |
October 25 |
7 × $11 = $77 5 × $12 = $60 |
|
10 × $12 = $120 |
TOTAL |
$77 + $60 = $137 |
0 |
120 |
Date |
Item |
Units |
|
Cost |
|
Total |
|
March 3 |
Purchase |
1 |
|
$4 |
|
$4 |
|
March 8 |
Purchase |
1 |
|
$6 |
|
$6 |
|
March 22 |
Purchase |
1 |
|
$8 |
|
$8 |
|
|
Totals |
3 |
|
$18 |
|
|
|
LIFO |
1 @ $8 → 1 × 8 = 8 → 18 – 8 = 10 |
Date |
Item |
Units |
|
Cost |
|
Total |
|
June 1 |
Beginning Inventory |
6 |
|
$5 |
|
$30 |
|
June 12 |
Purchase |
10 |
|
$6 |
|
$60 |
|
June 18 |
Purchase |
8 |
|
$7 |
|
$56 |
|
|
Totals |
24 |
|
- |
|
$146 |
|
Assume that 18 units were sold at a sales price of $14.
Gross profit |
6 @ $5, 10 @ $6, and 2 @ $7 → 2 × $7 = 14 → 30 + 60 + 14 = 104 → 18 × 14 = 252 → 252 – 104 = 148 |
Date |
Item |
Units |
|
Cost |
|
Total |
|
|
Beginning Inventory |
5 |
|
$10 |
|
$50 |
|
October 4 |
Purchase |
8 |
|
$12 |
|
$96 |
|
October 8 |
Sale |
6 |
|
|
|
|
|
October 20 |
Purchase |
15 |
|
$14 |
|
$210 |
|
October 25 |
Sale |
12 |
|
|
|
|
|
Date |
Item |
Units |
|
Cost |
|
Total |
|
March 3 |
Purchase |
1 |
|
$6 |
|
$6 |
|
March 8 |
Purchase |
1 |
|
$7 |
|
$7 |
|
March 22 |
Purchase |
1 |
|
$8 |
|
$8 |
|
|
Total |
3 |
|
$21 |
|
|
|
FIFO |
1 @ $6 → 21 – 6 = 15 |
Cost of merchandise sold |
$1,050,000 |
Inventories: |
|
Beginning of year |
$380,000 |
End of year |
$320,000 |
Determine inventory turnover for 2014.
Inventory turnover |
1,050,000[380,000+320,000÷2]=3
|
Balance sheet error |
89,000 – 87,000 = 2,000 |
Date |
Item |
Units |
|
Cost |
|
Total |
|
March 3 |
Purchase |
1 |
|
$4 |
|
$4 |
|
March 8 |
Purchase |
1 |
|
$6 |
|
$6 |
|
March 22 |
Purchase |
1 |
|
$8 |
|
$8 |
|
|
Totals |
3 |
|
$18 |
|
|
|
Gross profit |
|
Cost of merchandise sold |
$1,050,000 |
Inventories: |
|
Beginning of year |
$380,000 |
End of year |
$320,000 |
Determine the number of days' sales in inventory for 2014.
Number of days' sales in inventory |
[380,000+320,000÷2](1,050,000÷365)≈121.66→121.7
|
Balance sheet error |
34,000 – 43,000 = 9,000 |