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Unformatted text preview: 7-1GOODMAN’S JEWELRY WHOLESALERSSchedule of Gross ProfitFor the Year Ended December 31, 20X8(In Thousands)Gross sales$985Deduct: Sales returns and allowances$40Cash discounts on sales545Net sales940Cost of goods sold:Inventory, December 31, 20X7$103Add: Gross purchases$650Deduct: Purchase returns and allowances$27Cash discounts on purchases633Net purchases617Add Freight-in50Cost of merchandise acquired667Cost of goods available for sale770Deduct: Inventory, December 31, 20X8185Cost of goods sold585Gross profit$3557-3Amounts are in millions of dollars.PerpetualPeriodicAccounts receivable*19Accounts receivable19Sales revenue19Sales revenue19Cost of goods sold15No entryMerchandise inventory15* Could be a debit to cash if sales were for cash.7-4Cost of Goods Available = £21,400(8,000 + 4,200 + 4,400 + 2,300 + 2,500)LIFO Ending Inventory=(4,000 @ £2) + (1,500 @ £2.10) = £11,150FIFO Ending Inventory=1,000 @ £2.50=£ 2,5001,000 @ £2.30=2,3002,000 @ £2.20=4,4001,[email protected] £2.10=3,1505,500£12,350Weighted average=£21,400/10,000=£ 2.14 per unitEnding inventory5,500 @ £2.14=£11,770Cost of Goods Sold Calculation:WeightedLIFO...
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- Spring '08
- FIFO and LIFO accounting, $ 9,000 100, $10,800 200, $10.00 1,000