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Accounting assignments

# Accounting assignments - Student LE VIET Advanced...

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02/14/2011 Student: LE VIET Advanced Accounting Problem Instructors: Dr. Lewis Assingments for MODULE 08 P8.1 Flynt 's inventory record for Product X Units Unit cost Jan 1, 2007 (Beginning inventory) 1,600.00 \$18.00 Purchase Jan 5, 2007 2,600.00 \$20.00 Jan 25, 2007 2,400.00 \$21.00 Feb 16,2007 1,000.00 \$22.00 Mar 15, 2007 1,800.00 \$23.00 A physical inventory on March 31, 2007, shows 2,500 units on hand a - using FIFO method (Cost = Units * Unit Cost) We are to assume you sell the goods that have been in stock the longest. (Unit cost in ending inventory = Unit cost of the last one purchased) (1800 units with \$23 and 700 Units with \$22) Units Unit cost Cost Jan 1, 2007 (Beginning inventory) 1,600.0 \$18.00 \$28,800.00 Purchase Jan 5, 2007 2,600.0 \$20.00 \$52,000.00 Jan 25, 2007 2,400.0 \$21.00 \$50,400.00 Feb 16,2007 1,000.0 \$22.00 \$22,000.00 Mar 15, 2007 1,800.0 \$23.00 \$41,400.00 Total Purchase 7,800.0 \$165,800.00 Mar 31, 2007 (Ending Inventory) 2,500.0 \$56,800.00 b - using LIFO method We are to assume you sell the goods that have been in stock the shortest. (Unit cost in ending inventory = Unit cost of the First one purchased) (2500 Units with \$23) Units Unit cost Cost Jan 1, 2007 (Beginning inventory) 1,600.0 \$18.00 \$28,800.00 Purchase Jan 5, 2007 2,600.0 \$20.00 \$52,000.00 Jan 25, 2007 2,400.0 \$21.00 \$50,400.00 Feb 16,2007 1,000.0 \$22.00 \$22,000.00 Mar 15, 2007 1,800.0 \$23.00 \$41,400.00 Total Purchase 7,800.0 \$165,800.00 Mar 31, 2007 (Ending Inventory) 2,500.0 \$20.00 \$50,000.00 c - Weight - average Wa= (BI cost+Total Purchased cost)/(Total Units) EI = Wa * Units Units Unit cost Cost Jan 1, 2007 (Beginning inventory) 1,600.0 \$18.00 \$28,800.00 Purchase Jan 5, 2007 2,600.0 \$20.00 \$52,000.00 Jan 25, 2007 2,400.0 \$21.00 \$50,400.00 Feb 16,2007 1,000.0 \$22.00 \$22,000.00 Mar 15, 2007 1,800.0 \$23.00 \$41,400.00 Total (BI & Purchase) 9,400.0 \$194,600.00 We have:

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02/14/2011 Student: LE VIET Advanced Accounting Problem Instructors: Dr. Lewis Wa=\$19460/940 = \$20.70 Ending Inventory(on Mar 31,2007) = 2500*\$20.70213 = \$51,755.32 P8.2 Transaction on May Purchase Sale Date Units Unit cost Date Units Unit cost May 1 (Balance) 400.0 \$4.2 May 3 300.0 \$7.0 4 1,300.0 \$4.1 6 1,000.0 \$7.0 8 800.0 \$4.3 12 900.0 \$7.5 14 700.0 \$4.4 18 400.0 \$7.5 22 1,200.0 \$4.5 25 1,400.0 \$8.0 29 500.0 \$4.6 Perpetual inventory records are kept in dollars Required: Determine the inventory using LIFO Balance Purchase (Inventory) Sale Date Units Unit cost Total cost Units Unit sale Total sale May 1 400.0 \$4.2 \$1,680.0 3 300.0 \$7.0 \$2,100.0 100.0 \$4.2 \$420.0 \$420.0 4 1,300.0 \$4.1 \$5,330.0 6 100.0 \$4.2 \$420.0 1,000.0 \$7.0 \$7,000.0 300.0 \$4.1 \$1,230.0 \$1,650.0 8 800.0 \$4.3 \$3,440.0 12 100.0 \$4.2 \$420.0 900.0 \$7.5 \$6,750.0 200.0 \$4.1 \$820.0 \$1,240.0 14 700.0 \$4.4 \$3,080.0 18 100.0 \$4.2 \$420.0 400.0 \$7.5 \$3,000.0 200.0 \$4.1 \$820.0 300.0 \$4.4 \$1,320.0 \$2,560.0 22 1,200.0 \$4.5 \$5,400.0 25 100.0 \$4.2 \$420.0 1,400.0 \$8.0 \$11,200.0 200.0 \$4.1 \$820.0 100.0 \$4.4 \$440.0 \$1,680.0 29 500.0 \$4.6 \$2,275.0 Inventory on May (in Dollars): = Total cost purchased on 29, May +Inventory on 25, May = \$2275 + \$1680 = \$3955 P8.3 P8.4 Dollar Value LIFO On 12/31/06: (base-year) We know that: Gross profit = Sales - Cost of goods sold; So in this case, increasing on Gross profit caused by either increasing on Sales or reducing on cost of goods sold. However, I think that during 2007, Hill's Drug company significantly increased on sales. With total sales was \$ 1,800,000 at average price of \$40, they sold 45000 units to the market more 5000 units than total purchased materials (Purchased \$960,000 at average cost of \$24 equals to 40,000 units purchased). Because of buying faster, more of goods to the market, they reducing the cost for inventory, increasing on sale (based on the LIFO method), so the company increased the Gross Profit (Percent on Sale), because of the faster selling and reducing 4000 units inventory in 2006
02/14/2011 Student: LE VIET Advanced Accounting Problem Instructors: Dr. Lewis Item Number of Units Cost per Unit Total Cost X 200 \$2.0 \$400.0 Y 600 \$4.5 \$2,700.0 \$3,100.0 Addition information: Dec-31 2007 2008 1. Units of X in inventory 300 400 2. Cost of each X unit \$3.00 \$3.25 3. Units of Y in inventory 800 1200 4. Cost of each Y unit \$5.50 \$6.00

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