HW_06_Solutions

HW_06_Solutions - Solutions to Homework 6 Raffaele B. Mari,...

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Solutions to Homework 6 Due October 21, 2010 Raffaele B. Mari, CPA Econ 25 – Econ of Acctg. *EXERCISE 6-12 (a) FIFO Date Purchases Cost of goods sold Balance June 1 (125 @ $5) $ 625 June 12 (375 @ $6) $2,250 (125 @ $5) $2,875 (375 @ $6) June 15 (125 @ $5) $ 625 (305 @ $6) $1,830 (70 @ $6) $ 420 June 23 (500 @ $7) $3,500 (70 @ $6) $3,920 (500 @ $7) June 27 (70 @ $6) $ 420 (300 @ $7) $2,100 $4,975 (200 @ $7) $1,400 Ending inventory: $1,400. Cost of goods sold: $4,975. LIFO Date Purchases Cost of Goods Sold Balance June 1 (125 @ $5) $ 625 June 12 (375 @ $6) $2,250 (125 @ $5) $2,875 (375 @ $6) June 15 (375 @ $6) $2,250 (55 @ $5) $ 275 (70 @ $5) $ 350 (70 @ $5) $3,850 June 23 (500 @ $7) $3,500 (500 @ $7) (70 @ $5) $1,260 June 27 (370 @ $7) $2,590 (130 @ $7) $5,115 Ending inventory: $1,260. Cost of goods sold: $5,115.
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Solutions to Homework 6 Due October 21, 2010 Raffaele B. Mari, CPA Econ 25 – Econ of Acctg. EXERCISE 6-12 (Continued) Moving Average Date Purchases Cost of Goods Sold Balance June 1 (125 @ $5) $ 625 June 12 (375 @ $6) $2,250 (500 @ $5.75) $2,875 June 15 (430 @ $5.75) $2,473* (70 @ $5.75) $ 402* June 23 (500 @ $7) $3,500 (570 @ $6.846*) $3,902 June 27 (370 @ $6.846) $2,533* (200 @ $6.846) $1,369 $5,006 *rounded Ending inventory: $1,369. Cost of goods sold: $5,006. (b) FIFO gives the same ending inventory and cost of goods sold values under both the periodic and perpetual inventory system. LIFO and average cost give different ending inventory and cost of goods sold values under the periodic and perpetual inventory systems.
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HW_06_Solutions - Solutions to Homework 6 Raffaele B. Mari,...

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