AFM 101 Classroom Solutions - Oct 31st

AFM 101 Classroom Solutions - Oct 31st - E813 Req. 1...

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E8–13 Req. 1 Inventory Costing Method Weighted Summarized Income Statement Units FIFO Average Sales revenue (@ $70). ................................. 12,300 * $861,000 $861,000 Cost of sales: Beginning inventory (@ $35). ................ 3,000 105,000 105,000 Purchases (@ $38). ................................. 12,000 456,000 456,000 Cost of goods available for sale. ...... 15,000 561,000 561,000 Ending inventory**. ............................... 2,700 102,600 100,980 Cost of sales. ..................................... 12,300 458,400 460,020 Gross profit. .................................................. 402,600 400,980 Expenses (operating). ................................... 213,000 213,000 Pretax profit. ................................................. 189,600 187,980 Income tax expense (30%)***. .............. 56,880 56,394 Profit .......................................................... $132,720 $131,586 *Units sold = 3,000 + 12,000 – 2,700 = 12,300 **Inventory computations: FIFO:
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AFM 101 Classroom Solutions - Oct 31st - E813 Req. 1...

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