Inventory 6-14
1. 2770
A/P 2770
2. A/R (13 * 500) 6500
Sales Revenue 6500
Costs of goods sold (5 * 160) + (8 *170). 2160
Inventory 2160
3. Sales Revenue 6500
Cost of goods sold (2160)
Gross Profit 4340
Ending Inventory = (800+ 1870 + 900 2160) = 1410
6-15
1a. SPECIFIC UNIT COST
Costs of goods sold: (2 * 160) + (11 * 170) = 2190
Ending Inventory: (3570 2190) = 1380
b. AVERAGE COST
Costs of goods sold: (13 * [3570/21] or 170) = 2210
Ending Inventory: (8 * 170) = 1360
c. FIFO
Costs of goods sold: (5 * 160) + (8 * 170) = 2160
Ending Inventory: (5 * 180) + (3 * 170) = 1410
d. LIFO
Costs of goods sold: (5 * 180) + (8 * 170) = 2260
Ending (5 Inventory: * 160) + (3 * 170) = 1310
2.
Highest costs of good sold = LIFO
Lowest costs of good sold = FIFO
The cause is increase in inventory
6-17
1a. FIFO
Costs of Good Sold: (5 * 90) + (6 * 95) = 1020
Ending Inventory: (6 * 95) = 570
b. LIFO
Costs of Good Sold: (11 * 95) = 1045
Ending Inventory: (5 * 90) + 95 = 545
2. Income Statement
Sales Revenue (3 * 150) + (8 * 155): 1690
Costs of Goods Sold: 1020
Gross Profit: 670
Operating Expenses: 320
Income before tax: 350
Income after tax: 140
Net Income: 210
6-20
1. LIFO
2. FIFO
3. Specific Unit Cost
4. Average Cost
5. FIFO
6. LIFO
7. LIFO
8. LCM
9. LIFO
10. LIFO