Homework_7_solutions - Homework Manager Assignment Solution...

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E7–4. Computations: Simply rearrange the basic inventory equation BI + P – EI = CGS P = CGS – BI + EI Cost of goods sold . .................................... $965,716,000 Beginning inventory . .................................. (124,708,000) + Ending inventory . ....................................... 120,586,000 Purchases $961,594,000 E7–9. Req. 1 Inventory Costing Method Weighted Income statement Units FIFO LIFO Average Sales revenue. ....................................... 8,200 $574,000 $574,000 $574,000 Cost of goods sold: Beginning inventory. .................... 2,000 70,000 70,000 70,000 Purchases. ................................... 8,000 304,000 304,000 304,000 Goods available for sale. .. 10,000 374,000 374,000 374,000 Ending inventory*. ....................... 1,800 68,400 63,000 67,320 Cost of goods sold. ........... 8,200 305,600 311,000 306,680 Gross profit .......................................... 268,400 263,000 267,320 Expenses .......................................... 142,000 142,000 142,000 Pretax income. ....................................... 126,400 121,000 125,320 Income tax expense (30%). ........ 37,920 36,300 37,596 Net income .......................................... $ 88,480 $ 84,700 $ 87,724 *Inventory computations: FIFO: 1,800 units @ $38 = $68,400. LIFO: 1,800 units @ $35 = $63,000. Average:
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This note was uploaded on 09/29/2008 for the course AEM 2210 taught by Professor Little,j. during the Spring '07 term at Cornell University (Engineering School).

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Homework_7_solutions - Homework Manager Assignment Solution...

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