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Ch9_12sol_6e

# Ch9_12sol_6e - Practice Exam Chapters 9-12 Solutions...

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Practice Exam Chapters 9-12 Solutions Problem I Cost Retail Beginning inventory \$138,860 \$262,000 Plus: Net purchases 239,000 413,020 Net markups 12,000 Less: Net markdowns (4,000 ) Goods available for sale (excluding beginning inventory) 239,000 421,020 Goods available for sale (including beginning inventory) 377,860 683,020 \$138,860 Base year cost-to-retail percentage: ------------ = 53% \$262,000 \$239,000 2011 cost-to-retail percentage: ------------- = 56.77% \$421,020 Less: Net sales (390,000) Normal shortage (5,000 ) Estimated ending inventory at current year retail prices \$288,020 Estimated ending inventory at cost (below) (147,682 ) Estimated cost of goods sold \$230,178 Step 1 Step 2 Step 3 Ending Ending Inventory Inventory Inventory Inventory Layers Layers at Year-end at Base Year at Base Year Converted to Retail Prices Retail Prices Retail Prices Cost \$288,020 \$288,020 ------------ = \$276,942 \$262,000 (base) x 1.00 x 53% = \$138,860 (above) 1.04 14,942 (2011) x 1.04 x 56.77% = 8,822 Total ending inventory at dollar-value LIFO retail cost ................... \$147,682

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Problem II Average accumulated expenditures: Date of payment (expenditure) Start of contract \$200,000 x 12 / 12 = \$200,000 March 31 250,000 x 9 / 12 = 187,500 June 30 250,000 x 6 / 12 = 125,000 September 30 250,000 x 3 / 12 = 62,500 December 31 250,000 x 0 = - 0 - Average accumulated expenditures
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