Lecture 19 Review questions answer key

Lecture 19 Review questions answer key - Inventory Rays...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Inventory Ray’s Farm Store recorded the following purchases and sales of fertilizer during the past year: Jan.1 Beginning Inventory 250 cases @ $23 $5,750 Feb. 25 Purchased 100 cases @ $26 2,600 June 15 Purchased 400 cases @ $28 11,200 Aug. 15 Purchased 100 cases @ $26 2,600 Oct. 15 Purchased 300 cases @ $28 8,400 Dec. 15 Purchased 200 cases @ $30 6,000 Total goods available for sale 1,350 cases $36,550 Total sales 1,000 cases Dec. 31 Ending Inventory 350 cases 1) Determine the Cost of Goods Sold and Ending Inventory under the three cost-flow assumptions: FIFO, LIFO, and Average Cost. FIFO COGS = 5,750 + 2,600 + 11,200 + 2,600 + 150*28 = 26,350 FIFO Ending Inventory = 6,000 + 150*28 = 10,200 LIFO COGS = 6,000 +8,400 + 2,600 + 11,200 = 28,200 LIFO ending inventory = 5,750 + 2,600 = 8,350 Average cost per unit = 36,550/1,350 = 27.07 Average Cost COGS = 27.07 *1,000 = 27,070 Average Cost ending inventory = 27.07 * 350 = 9,475 Note that under Average Cost assumption, due to rounding errors, the sum of COGS and ending inventory is 36,545, not exact the same as Total goods available for sale (36,550). 2) Calculate the LIFO reserve ending balance on Dec. 31. LIFO reserve = FIFO ending inventory –LIFO ending inventory = 10,200 – 8,350 = 1,850
Background image of page 1

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

View Full DocumentRight Arrow Icon
High-Low method The company reports the following utility costs for different levels of activity during the first
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/11/2009 for the course ACCT 410x taught by Professor Bonner during the Fall '06 term at USC.

Page1 / 6

Lecture 19 Review questions answer key - Inventory Rays...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online