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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