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Opt_Prob_Solutions_chap_7_Solutions

# Opt_Prob_Solutions_chap_7_Solutions - ,200 –Purchase,000...

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Chapter 7 Optional Problem Solutions E7–6 Weighted Units FIFO LIFO Average Cost of goods sold: Beginning inventory (\$8) ............. 3,000 \$24,000 \$24,000 \$24,000 Purchases (March 21) (\$9) ......... 5,000 45,000 45,000 45,000 (August 1) (\$7) .......... 2,000 14,000 14,000 14,000 Goods available for sale... 10,000 83,000 83,000 83,000 Ending inventory* ........................ 4,000 32,000 33,000 33,200 Cost of goods sold ............ 6,000 \$51,000 \$50,000 \$49,800 *Ending inventory computations: FIFO: (2,000 units @ \$7) + (2,000 units @ \$9) = \$32,000. LIFO: (3,000 units @ \$8) + (1,000 units @ \$9) = \$33,000. Average: [(3,000 units @ \$8) + (5,000 units @ \$9) + (2,000 units @ \$7)] = \$83,000 ÷ 10,000 units = \$8.30 per unit. 4,000 units @ \$8.30 = \$33,200.

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AP7 - 1. a) Goods available for sale for all methods: Unit Total Units Cost Cost January 1, 2010–Beginning inventory 400 \$30 \$12,000 February 20, 2010–Purchase
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Unformatted text preview: 600 32 19,200 June 30, 2010–Purchase 500 36 18,000 Goods available for sale 1,500 \$49,200 Ending inventory: 1,500 units – (700 + 100) = 700 units b) and c) 1. Weighted-average cost: Average unit cost \$49,200 ÷ 1,500=\$32.80. Ending inventory (700 units x \$32.80) \$22,960 Cost of goods sold (\$49,200 – \$22,960) \$26,240 2. First-in, first-out: Ending inventory (500 units x \$36) + (200 units x \$32) \$24,400 Cost of goods sold (\$49,200 – \$24,400) \$24,800 3. Last-in, first-out: Ending inventory (400 units x \$30) + (300 units x \$32) \$21,600 Cost of goods sold (\$49,200 – \$21,600) \$27,600 4. Specific identification: Ending inventory (260 units x \$30) + ( 40 units x \$32) + (400 units x \$36) \$23,480 Cost of goods sold (\$49,200 – \$23,480) \$25,720...
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