Problem Assignment 4

Problem Assignment 4 - Problem Assignment 4-Brandon Brady...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem Assignment 4-Brandon Brady P7-5) In the current scenario of Lee Company below is the scheduled calculation of ending inventories and cost of goods sold. Units FIFO LIFO AVG Cost Beginning Inventory(12,000 x $20,000 12,000 $240,000 $240,000 240,000 Purchases: 4,000 x $21 4,000 $84,000 $84,000 84,000 6,000 x $22 6,000 $132,000 $132,000 132,000 8,000 x $23 8,000 $184,000 $184,000 184,000 Cost of Goods Available for sale 30,000 $640,000 $640,000 640,000 Ending Inventory 20,000 $440,000 $412,000 $426,667 Cost of Goods Sold 10,000 $200,000 $228,000 $213,333 *Ending inventory computations: FIFO:(2000 [email protected]$20)+([email protected]$21)+([email protected]$22)+([email protected]$23)=$440,000 LIFO:( [email protected]$20)+([email protected]$21)+([email protected]$22)=$412,000 Average:[( [email protected]$20)+([email protected]$21)[email protected]$22)+([email protected]$23 )] =$640,000 =$21.33 30,000 20,000 x $21.33 =$426,667 Therefore. Alternative A-FIFO Alternative B-LIFO Alternative C-Average Cost
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
P7-6) b.) FIFO Periodic: In FIFO, it is assumed that the costs move in the sequential order of inventory. In addition the costs which are incurred first are first transferred to cost of goods sold and the most latest costs are allotted to ending cost of inventory. Ending Inventory (450 units) Amount Apr 17: 100 [email protected]$5.50 $550 Apr 28: 100 [email protected]$5.75 $575 May 5: 250 [email protected]$5.50 $1375 Total Closing Inventory $2,500 Cost of goods sold (500 units) The relationship between COGS are ending inventory in mentioned below. Putting the values given in the question in the above mentioned formula we get Cost of Goods Sold-Beginning Inventory+ Net purchases-Ending Inventory Cost of Goods Sold-$2000+$1,100+$575 +$1,375-$2500 =$2,550 b) FIFO Perpetual Date Description Cost of goods sold Inventory Balance Apr 1 Beginning Inv - [email protected]$5=$2,000 17 Purchase - [email protected]$5=$1250 [email protected]$5.50=$1,100 $3,100 25 Sales-150units [email protected]$5=$750 [email protected]$5=$1250 [email protected]$5.50=$1,100 $2,350 28 Purchase [email protected]$5=$1,250 [email protected]$5.50=$1,100 [email protected]$5.75=$575 $2,925 May 5 Purchase [email protected]$5=$1,250
Image of page 2
[email protected]$5.50=$1,100 [email protected]$5.75=$575 [email protected]$5.50=$1,375 $4,300 5 Purchase [email protected]$5=$1,250 [email protected]$5.5=$1,100 [email protected]$5.75=$575 [email protected]$5.50=$1,375 $4,300 18 Sales-300units [email protected]$5 [email protected]$5.5=$825 =$1,525 [email protected]$5.75=$575 [email protected]$5.50 [email protected]=$1,375 $2,775 22 Sales-50units [email protected]$5.50=$275 [email protected]$5.5=$550 [email protected]=$575 [email protected]=$1,375 $2,500 Total COGS $750+$1,525+275=$2,550 C) LIFO Periodic
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern