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

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(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
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(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
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(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 (9@ $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
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(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.
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This note was uploaded on 09/16/2011 for the course ACG 2021 taught by Professor Hornik during the Spring '08 term at University of Central Florida.

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

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