Week5_ch5_solutions [Uploaded]

Week5_ch5_solutions [Uploaded] - FB2100 Accounting I...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Week 5 – Chapter 5 Exercise 5-1 (30 minutes) a. Specific identification Ending inventory—100 units from January 30, 70 units from January 20, and 20 units from beginning inventory Ending Cost of Computations Inventory Goods Sold (100 x $5.00) + (70 x $5.60) + (20 x $6.00) . ...... $1,012 $3,020 - $1,012 . ................................................. $2,008 b. Weighted average perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance 1/1 140 @ $6.00 = $ 840 1/10 100 @ $ 6.00 = $ 600 40 @ $6.00 = $ 240 1/20 300 @ $5.60 40 @ $6.00 = $1,920 300 @ $5.60 (avg. cost is $5.65) 1/25 250 @ $5.65 = $1,412* 90 @ $5.65 = $ 508* 1/30 100 @ $5.00 90 @ $5.65 = $1,008 $2,012 100 @ $5.00 (avg. cost is $5.31) * rounded c. FIFO Perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance 1/1 140 @ $6.00 = $ 840 1/10 100 @ $6.00 = $ 600 40 @ $6.00 = $ 240 1/20 300 @ $5.60 40 @ $6.00 = $1,920 300 @ $5.60 1/25 40 @ $6.00 210 @ $5.60 90 @ $5.60 = $ 504 1/30 100 @ $5.00 90 @ $5.60 = $1,004 $2,016 100 @ $5.00 = $1,416
Background image of page 1

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

View Full DocumentRight Arrow Icon
FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Week 5 – Chapter 5 Exercise 5-1 (Continued) d. LIFO Perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance 1/1 140 @ $6.00 = $ 840 1/10 100 @ $6.00 = $ 600 40 @ $6.00 = $ 240 1/20 300 @ $5.60 40 @ $6.00 = $1,920 300 @ $5.60 1/25 250 @ $5.60 = $1,400 40 @ $6.00 = $ 520 50 @ $5.60 1/30 100 @ $5.00 40 @ $6.00 $2,000 50 @ $5.60 = $1,020 100 @ $5.00 Alternate Solution Format for FIFO and LIFO Perpetual Ending Cost of Computations Inventory Goods Sold c. FIFO (90 x $5.60) + (100 x $5.00) . .............................................. $1,004 (100 x $6.00) + (40 x $6.00) + (210 x $5.60) . .................... $2,016 d. LIFO (40 x $6.00) + (50 x $5.60) + (100 x $5.00) . ...................... $1,020 (100 x $6.00) + (250 x $5.60) . ............................................ $2,000 Exercise 5-2 (20 minutes) LAKER COMPANY Income Statements For Month Ended January 31 Specific Identification Weighted Average FIFO LIFO Sales . ................................ $5,250 $5,250 $5,250 $5,250 (350 units x $15 price) Cost of goods sold . ........ 2,008 2,012 2,016 2,000 Gross profit . .................... 3,242 3,238 3,234 3,250 Expenses . ........................ 1,250 1,250 1,250 1,250 Income before taxes . ...... 1,992 1,988 1,984 2,000 Income tax expense (30%) . . 598* 596* 595* 600 Net income . ..................... $1,394 $1,392 $1,389 $1,400 * Rounded to nearest dollar.
Background image of page 2
FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Week 5 – Chapter 5 Exercise 5-2 (Concluded) 1. LIFO method results in the highest net income of $1,400. 2. Weighted average net income of $1,392 falls between the FIFO net
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/20/2011 for the course ACC fb200 taught by Professor Tony during the Spring '11 term at American University in Bulgaria.

Page1 / 13

Week5_ch5_solutions [Uploaded] - FB2100 Accounting I...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online