NP_10e_Ch06_Solutions - P6-2 Product PIT (Periodic...

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Unformatted text preview: P6-2 Product PIT (Periodic Inventory)1. Average-Cost MethodPurchasedSoldUnitsPriceAmountUnitsPrice1-Apr Beginning inventory10-Apr Purchase100 $220.00 $22,000 17-Apr Sale90 $214.67 April Total100 $22,000 90 2-May Purchase100 $216.00 $21,600 14-May Purchase50 $224.00 $11,200 22-May Purchase60 $234.00 $14,040 30-May Sale200 $221.19 May Total210 $46,840 200 April May Ending inventory$12,880 $15,483 COGS$19,320 $44,237 2. FIFO MethodPurchasedSoldUnitsPriceAmountUnitsPrice1-Apr Beginning inventory10-Apr Purchase100 $220.00 $22,000 17-Apr Sale50 $204.00 40 $220.00 April Total100 $22,000 90 2-May Purchase100 $216.00 $21,600 14-May Purchase50 $224.00 $11,200 22-May Purchase60 $234.00 $14,040 30-May Sale60 $220.00 100 $216.00 40 $224.00 May Total210 $46,840 200 April May Ending inventory$13,200 $16,280 COGS$19,000 $43,760 3. LIFO MethodPurchasedSoldUnitsPriceAmountUnitsPrice1-Apr Beginning inventory10-Apr Purchase100 $220.00 $22,000 17-Apr Sale90 $220.00 April Total100 $22,000 90 2-May Purchase100 $216.00 $21,600 14-May Purchase50 $224.00 $11,200 22-May Purchase60 $234.00 $14,040 30-May Sale60 $234.00 50 $224.00 90 $216.00 May Total210 $46,840 200 April May Ending inventory$12,400 $14,560 COGS$19,800 $44,680 4. Cash Flow ImplicationsThe amount of cash paid and received is the same for the three cost flow assumptions, however, profitabiliwill vary depending on the method chosen. Since COGS differs, income before tax will vary. As a result, sBalanceAmountUnitsPriceAmount50 $204.00 $10,200 150 $214.67 $32,200...
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This note was uploaded on 09/20/2009 for the course UGBA 102A taught by Professor Udpa during the Summer '07 term at University of California, Berkeley.

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NP_10e_Ch06_Solutions - P6-2 Product PIT (Periodic...

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