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AC301-03_Marjorie Bowden-Project-Unit 2

# AC301-03_Marjorie Bowden-Project-Unit 2 - E8-8 Alternative...

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The prepetual inventory records of the Park Company indicate the following transactions in the month of June: Units Cost/Unit Inventory, June 1 200 \$3.20 Purchases June 3 200 3.50 June 17 250 3.60 June 24 300 3.65 Sales June 6 300 June 21 200 June 27 150 Required Compute the cost of goods sold for June and the inventory at the end of June, using each of the following cost flow assumptions: 1. First-In, First-Out (FIFO) 2. Last-In, First Out (LIFO) 3. Average Cost (round unit costs to 2 decimal places) 4. If Park Company uses IFRS, which of the previous alternatives would be acceptable? E8-8 Alternative Inventory Methods

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Name: Marjorie Bowden An asterisk (*) will appear next to an incorrect amount(s) in the outlined cell(s). If you are still getting a red asterisk, and think the answer is correct, but used a formula in the cell try manually typing in the answer according to the rounding instructions. Required Compute the cost of goods sold for June and the inventory at the end of June, using each of the following cost flow assumptions: 1. First-In, First-Out (FIFO) Purchases Cost of Goods Sold Units (layers) Left in Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost June 1 200 3.20 640.00 June 3 200 3.50 700.00 200 3.20 640.00 200 3.50 700.00 June 6 200 3.20 640.00 100 3.50 350.00 100 3.50 350.00 June 17 250 3.60 900.00 100 3.50 350.00 250 3.60 900.00 June 21 100 3.50 350.00 100 3.60 360.00 150 3.60 540.00 June 24 300 3.65 1,095.00 150 3.60 540.00 300 3.65 1,095.00 June 27 150 3.60 540.00 300 3.65 1,095.00 Total Cost of Goods Sold, June 30 (add up Total Costs) \$2,240.00 Total Ending Inventory, June 30 (add up layers that are left) \$1,095.00 2. Last-In, First Out (LIFO) Purchases Cost of Goods Sold Units (layers) Left in Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost June 1 200 3.20 640.00 June 3 200 3.50 700.00 200 3.20 640.00 200 3.50 700.00 June 6 200 3.50 700.00 100 3.20 320.00 100 3.20 320.00 June 17 250 3.60 900.00 100 3.20 320.00 250 3.60 900.00 June 21 200 3.60 720.00 100 3.20 320.00 50 3.60 180.00 June 24 300 3.65 1,095.00 100 3.20 320.00 50 3.60 180.00 300 3.65 1,095.00 June 27 150 3.65 547.50 100 3.20 320.00 50 3.60 180.00 150 3.65 547.50 Total Cost of Goods Sold, June 30 (add up Total Costs) \$2,287.50 Total Ending Inventory, June 30 (add up layers that are left) \$1,047.50 3. Average Cost (round unit costs to 2 decimal places) Purchases Cost of Goods Sold Units (layers) Left in Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost June 1 200 3.20 640.00 June 3 200 3.50 700.00 200 3.20 640.00 200 3.50 700.00 Calculation of Average Cost per Unit (Cost of Inventory Available for Sale / Units Available for Sale) Totals 400 1,340.00 Average Per Unit 3.35 June 6 300 3.35 1,005.00 100 3.35 335.00 June 17 250 3.60 900.00 100 3.35 335.00 250 3.60 900.00 Calculation of Average Cost per Unit (Cost of Inventory Available for Sale / Units Available for Sale) Totals 350 1,235.00 Average Per Unit 3.53 June 21 200 3.53 706.00 150 3.53 529.50 June 24 300 3.65 1,095.00 150 3.53 529.50 300 3.65 1,095.00 Calculation of Average Cost per Unit (Cost of Inventory Available for Sale / Units Available for Sale) Totals 450 1,624.50 Average Per Unit 3.61 June 27 150 3.61 541.50 300 3.61 1,083.00 Total Cost of Goods Sold, June 30 (add up Total Costs) \$2,252.50 Total Ending Inventory, June 30 (add up layers that are left) \$1,083.00 4. If Park Company uses IFRS, which of the previous alternatives would be acceptable?
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