7111AFE_Solution_Topic08

# 7111AFE_Solution_Topic08 - 7111AFE Tutorial Solution Topic...

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7111AFE Tutorial Solution: Topic 8 (10-15 min.) E 6-1 Under the First-in, first-out cost method we start to ‘dismantle’ our pyramid from the bottom: Perpetual Inventory Record – FIFO PICKER PARADISE Date Purchases Cost of Goods Sold Inventory on Hand Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost May 1 5 \$70 \$350 6 3 \$70 \$210 2 70 140 8 10 \$80 \$800 2 70 140 10 80 800 17 2 70 140 2 80 160 8 80 640 30 5 80 400 3 80 240 31 10 \$800 12 \$910 3 \$240 Ending inventory = \$240 Cost of goods sold = \$910 (15-20 min.) E 6-5 Req. 1 Journal Perpetual System ACCOUNTS AND EXPLANATIONS DEBIT CREDIT Thousands 1. Purchases: ( To record purchased inventory on credit ) Inventory (\$3,415×100)/ 110 3,105 GST Clearing (\$3,105×0.10) 310 Accounts Payable 3,415 2. Sales: Cash (\$4,834 × .20) 967 Accounts Receivable (\$4,834 × .80) 3,867

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Sales Revenue (\$4834×100)/110) 4,395 GST Clearing(\$4,395×0.10) 439 Recorded the cost of goods sold Cost of Goods Sold 2,821 Inventory 2,821 Req. 2 BALANCE SHEET: Thousands Current assets:
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7111AFE_Solution_Topic08 - 7111AFE Tutorial Solution Topic...

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