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Capstone C6 answers - ADM2340 Introductory Financial...

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ADM2340 Introductory Financial Accounting Capstone Problem Chapter 6 Crunch, Inc. is a snack foods wholesaler. They purchase boxes of chips from various manufacturers and distribute to retail shops. For the month of March, Crunch started with an inventory of 200 boxes of chips at a total cost of $3000. During March, their purchases were as follows: Total cost Mar 3 300 boxes $4560 Mar 9 250 3875 Mar 14300 4470 Mar 21500 7400 Mar 27350 5285 Crunch had four sales (at $25 per box) in March as follows: Mar 7 250 boxes Mar 15300 Mar 19300 Mar 30500 Required: 1. What are the COGS and EI amounts for March assuming FIFO and a periodic system? Periodic system is when inventories are not tracked on a consistent basis (i.e. not real time). Occurs usually in places where it is too costly to implement the technology. Date Description Quantity Amount Notes March 1 Opening balance 200 3,000 March 3 Purchase 300 4,560 March 7 Sale -250 -3,760 (3000+50/300*4560) March 9 Purchase 250 3,875 March 14 Purchase 300 4,470 March 15 Sale -300 -4,575 (250/300*4560+50/250*3875) March 19 Sale -300 -4,590 (200/250*3875+100/300*4470) March 21 Purchase 500 7,400 March 27 Purchase 350 5,285
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