hhtfa8e_ch06_sm

hhtfa8e_ch06_sm - Chapter 6 Inventory & Cost of...

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Unformatted text preview: Chapter 6 Inventory & Cost of Goods Sold Short Exercises (10 min.) S 6-1 Billions Inventory 3.8 Cash... 3.8 Accounts Receivable. 19.7 Sales Revenue. 19.7 Cost of Goods Sold 4.5 Inventory... 4.5 Cash 18.8 Accounts Receivable. 18.8 Financial Accounting 8/e Solutions Manual 168 (10-15 min.) S 6-2 1. (Journal entries) Inventory.. 120,000 Accounts Payable. 120,000 Amounts Receivable 150,000 Sales Revenue... 150,000 Cost of Goods Sold.. 90,000 Inventory ($120,000 .75).. 90,000 Cash ($150,000 .30)... 45,000 Accounts Receivable... 45,000 2. (Financial statements) BALANCE SHEET Current assets: Inventory ($120,000 $90,000). $ 30,000 INCOME STATEMENT Sales revenue $150,000 Cost of goods sold.. 90,000 Gross profit $60,000 Financial Accounting 8/e Solutions Manual 169 (15-20 min.) S 6-3 a b c Average Cost FIFO LIFO Cost of goods sold: Average (26 $154.71) $4,022.46 FIFO $1,260 + (17 $160) $3,980 LIFO $4,000 + (1 $140) $4,140 Ending inventory: Average (8 $154.71) $ 1,237.68 FIFO (8 $160) $1,280 LIFO (8 $140) $1,120 Computations: Units sold = 26 (9 + 25 8) Units in ending inventory = 8 Average cost per unit = $154.71 ($1,260 + $4,000) (9 + 25) Cost per unit: First purchase = $140 ($1,260 9 = $140) Second purchase = $160 ($4,000 25 = $160) Chapter 6 Inventory & Cost of Goods Sold 170 (10-15 min.) S 6-4 Jeffersons Copy Center Income Statement Year Ended December 31, 2010 Avera ge FIFO LIFO Sales revenue (580 $20.25) $11,745 $11,745 $11,745 Cost of goods sold (580 $9.70*) 5,626 (92 $8.90) + (488 $9.80) 5,601 (580 $9.80) 5,684 Gross profit 6,119 6,144 6,061 Operating expenses 3,750 3,750 3,750 Net income $ 2,369 $2,394 $ 2,311 _____ * Average cost per unit: Beginning inventory (92 @ $9.00).. $ 828 Purchases (680 @ $9.80) 6,664 Goods available. $7,492 Average cost per unit $7,492 / 772 units $ 9.70 Financial Accounting 8/e Solutions Manual 171 (10-15 min.) S 6-5 Jefferson Copy Center Income Statement Year Ended December 31, 2010 Averag e FIFO LIFO Sales revenue (580 $20.25) $11,745 $11,745 $11,745 Cost of goods sold (580 $9.70*) 5,626 (92 $8.90) + (488 $9.80) 5,601 (580 $9.80) ______ ______ 5,684 Gross profit 6,119 6,144 6,061 Operating expenses 3,750 3,750 3,750 Income before income tax $2,369 $ 2,394 $ 2,311 Income tax expense (30%) $ 711 $ 718 $ 693 *From S 6-4 Chapter 6 Inventory & Cost of Goods Sold...
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hhtfa8e_ch06_sm - Chapter 6 Inventory & Cost of...

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