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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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