{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# Chapter6 - (10 min Inventory S 6-1 Billions 3.8 3.8 Cash...

This preview shows pages 1–5. Sign up to view the full content.

(10 min.) S 6-1 Billions Inventory………………………… 3.8 Cash…………………………... 3.8 Accounts Receivable…………. 19.7 Sales Revenue………………. 19.7 Cost of Goods Sold…………… 4.5 Inventory……………………... 4.5 Cash……………………………… 18.8 Accounts Receivable………. 18.8 Chapter 6 Inventory & Cost of Goods Sold 168

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
(10-15 min.) S 6-2 1. (Journal entries) Inventory………………………………….. 120,000 Accounts Payable……………………. 120,000 Amounts Receivable…………………… 150,000 Sales Revenue………………………... 150,000 Cost of Goods Sold…………………….. 90,000 Inventory (\$120,000 × .75) ………….. 90,000 Cash (\$150,000 × .30)…………………... 45,000 Accounts Receivable………………... 45,000 2. (Financial statements) BALANCE SHEET Current assets: Inventory (\$120,000 \$90,000) ………………. \$ 30,000 INCOME STATEMENT Sales revenue……………………………………… \$150,000 Cost of goods sold……………………………….. 90,000 Gross profit………………………………………… \$60,000 Chapter 6 Inventory & Cost of Goods Sold 169
(10-15 min.) E 6-17A 1. Inventory Begin. Bal. ( 5 units @ \$150) 750 Purchases Dec. 15 ( 4 units @ \$150) 600 Cost of goods sold 26 (12 units @ \$160) 1,920 (12 units @ \$?) ? Ending bal. ( 9 units @ \$?) ? Cost of Goods Sold Ending Inventory (a) Specific unit cost (6 @ \$150) + (6 @ \$160) = \$1,860 (3 @ \$150) + (6 @ \$160) = \$1,410 (b) Average cost 12 × \$156* = \$1,872 9 × \$156* = \$1,404 _____ *Average cost per unit = (\$750 + \$600 + \$1,920) = \$156 (5 + 4 + 12) (c) FIFO (9 @ \$150) + (3 @ \$160) = \$1,830 ([email protected] \$160) = \$1,440 (d) LIFO (12 @ \$160) = \$1,920 (9 @ \$150) = \$1,350 2. LIFO produces the highest cost of goods sold, \$1,920. FIFO produces the lowest cost of goods sold, \$1,830. The increase in inventory cost from \$150 to \$160 per unit causes the difference in cost of goods sold. Chapter 6 Inventory & Cost of Goods Sold 170

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
(15 min.) E 6-20A Millions 1. Gross profit: FIFO LIFO Sales revenue…………………………… \$4.8 \$4.8 Cost of goods sold FIFO: 800,000 × \$5………………….. 4.0 LIFO: (500,000 × \$3) + (200,000 × \$4) + (100,000 ×5)…………………………. 2. 8 Gross profit……………………………… \$0.8 \$2.0 2. Gross profit under FIFO and LIFO differ because inventory costs decreased during the period.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}