Problem Assignment 4

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

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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

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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
[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]\$5.5=\$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

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• Fall '15
• THOMAS
• Accounting, FIFO and LIFO accounting, COGS

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