Chapter 6 Solutions

Chapter 6 Solutions - PRACTICE EXERCISES PE 61A Gross...

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PRACTICE EXERCISES PE 6–1A Gross Profit Ending Inventory a. First-in, first-out (FIFO) \$23 (\$53 – \$30) \$78 (\$36 + \$42) b. Last-in, first-out (LIFO) \$11 (\$53 – \$42) \$66 (\$30 + \$36) c. Average cost \$17 (\$53 – \$36) \$72 (\$36 × 2) PE 6–1B Gross Profit Ending Inventory a. First-in, first-out (FIFO) \$45 (\$125 – \$80) \$172 (\$84 + \$88) b. Last-in, first-out (LIFO) \$37 (\$125 – \$88) \$164 (\$80 + \$84) c. Average cost \$41 (\$125 – \$84) \$168 (\$84 × 2) PE 6–2A a. Cost of merchandise sold (July 25): 10 units @ \$8 \$ 80 50 units @ \$12 600 60 \$680 b. Inventory, July 31: \$900 = 75 units × \$12 PE 6–2B a. Cost of merchandise sold (April 24): 12 units @ \$70 \$ 840 3 units @ \$72 216 15 \$1,056 b. Inventory, April 30: \$1,584 = 22 units × \$72

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PE 6–3A a. Cost of merchandise sold (July 25): \$720 = (60 units × \$12) b. Inventory, July 31: 10 units @ \$8 \$ 80 65 units @ \$12 780 75 \$860 PE 6–3B a. Cost of merchandise sold (April 24): \$1,080 = (15 units × \$72) b. Inventory, April 30: 12 units @ \$70 \$ 840 10 units @ \$72 720 22 \$1,560 PE 6–4A a. First-in, first-out (FIFO) method: \$2,786 = (10 units × \$119) + (14 units × \$114) b. Last-in, first-out (LIFO) method: \$2,766 = (5 units × \$120) + (19 units × \$114) c. Average cost method: \$2,760 (24 units × \$115), where average cost = \$115 = \$9,200/80 units PE 6–4B a. First-in, first-out (FIFO) method: \$2,592 = 48 units × \$54 b. Last-in, first-out (LIFO) method: \$2,160 = 48 units × \$45 c. Average cost method: \$2,400 (48 units × \$50), where average cost = \$50 = \$11,250/225 units
PE 6–5A A B C D E F G 1 Unit Unit Total 2 Inventory Cost Market Lower 3 Commodity Quantity Price Price Cost Market of C or M 4 Alpha 400 \$ 6 \$ 5 \$2,400 \$2,000 \$2,000 5 Beta 350 12 14 4,200 4,900 4,200 6 Total \$6,600 \$6,900 \$6,200 PE 6–5B A B C D E F G 1 Unit Unit Total 2 Inventory Cost Market Lower 3 Commodity Quantity Price Price Cost Market of C or M 4 Widget 100 \$30 \$27 \$3,000 \$2,700 \$2,700 5 Gidget 75 24 25 1,800 1,875 1,800 6 Total \$4,800 \$4,575 \$4,500 PE 6–6A Amount of Misstatement Overstatement (Understatement) Balance Sheet: Merchandise inventory overstated. ................... \$ 16,000

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This note was uploaded on 05/17/2011 for the course ACCT 2301 taught by Professor White during the Spring '08 term at Central Texas College.

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Chapter 6 Solutions - PRACTICE EXERCISES PE 61A Gross...

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