Chapter06 - PROBLEM SET C PROBLEM 6-1C Harry's House of...

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PROBLEM SET C PROBLEM 6-1C Harry’s House of Fashions uses a perpetual inventory system. It entered into the following calendar-year 2008 purchases and sales transactions: Jan. 1 Beginning inventory 60 units @ $40/unit April 1 Purchase 75 units @ $48/unit April 5 Sales 50 units @ $80/unit July 7 Purchase 30 units @ $42/unit Aug.12 Purchase 40 units @ $50/unit Sept. 2 Sales ______ 65 units @ $80/unit Totals 205 units 115 units Required 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units remaining in ending inventory. 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) specific identification - 50 units from beginning inventory, 50 units from the April 1 purchase, and 15 units from the August 12 purchase are sold-, and (d) weighted average – round per unit cost to tenth of a cent and inventory balances to the dollar. 4. Compute the gross profit earned by the company for each of the costing methods in part 3 . Analysis Component 5. If the company’s manager earns a bonus based on a percent of gross profit, which method of inventory costing will the manager likely prefer? PROBLEM 6-2C Kenneth Company’s financial statements reported the following. Kenneth recently discovered that in making counts of physical inventory, it made the following errors: Inventory on December 31, 2007, is overstated by $4,000, and inventory on December 31, 2008, is
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This note was uploaded on 06/22/2011 for the course ACCT 201 taught by Professor Tracyedmond during the Spring '10 term at Park.

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Chapter06 - PROBLEM SET C PROBLEM 6-1C Harry's House of...

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