ACC305_week 4 discussions

# ACC305_week 4 discussions - Week 4 discussions DISCUSSION 1...

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Week 4 discussions DISCUSSION 1 E8-9 Inventory balance before additional transactions \$165,000 Add: Goods shipped to Kwok f.o.b. shipping point on Dec. 28 17,000 Goods shipped to customer f.o.b. destination on Dec. 27 22,000 Corrected inventory balance \$204,000 E8-13 1. Because the cost and quantity of merchandise both rose during the period, LIFO will have the highest cost of goods sold and FIFO will have the highest ending inventory balance. 2. Beginning inventory (600 x \$80) \$48,000 Purchases: 1,000 x \$ 95 \$95,000 800 x \$100 80,000 175,000 Cost of goods available (2,400 units) \$223,000 FIFO: Cost of goods available for sale (2,400 units) \$223,000 Less: Ending inventory (80,000) Cost of goods sold \$143,000

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Cost of ending inventory calculation: January 21 st – 800 units purchased @ \$100 per unit = \$80,000 LIFO: Cost of goods available for sale (2,400 units) \$223,000 Less: Ending inventory (67,000) Cost of goods sold \$156,000 Cost of ending inventory calculation: Beginning Inventory – 600 units @ \$80 per unit = \$48,000 January 15 th purchase – 200 units @ \$95 per unit = \$19,000 \$48,000 + 19,000 = \$67,000 DISCUSSION 2 E9-21 Cost of goods sold Net income Retained earnings 1. Overstatement of ending inventory
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