Ch06a - Chapter 06 - Inventory and Cost of Goods Sold...

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Chapter 06 - Inventory and Cost of Goods Sold 6-1 Requirement 1: Using FIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. (a) Date Transaction Number of units Unit cost Ending Inventory Oct. 6 Purchase 50 $38 $1,900 (b) Date Transaction Number of units Unit cost Cost of Goods Sold Jan. 1 Beginning inventory 40 $32 $ 1,280 Apr. 7 Purchase 120 34 4,080 Jul. 16 Purchase 190 37 7,030 Oct. 6 Purchase 50 38 1,900 400 a $14,290 a First 400 units purchased are assumed sold (c) Sales revenue = 400 units X $50 = $20,000 (d) Gross profit = Sales revenue − Cost of goods sold = $20,000 − $14,290 = $5,710 Requirement 2: Using LIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit.
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Chapter 06 - Inventory and Cost of Goods Sold 6-2 (a) Date Transaction Number of units Unit cost Ending Inventory Jan. 1 Beginning Inventory 40 $32 $1,280 Apr. 7 Purchase 10 34 340 50 $1,620 (b) Date Transaction Number of units Unit cost Cost of Goods Sold Apr. 7 Purchase 110 $34 $ 3,740 Jul. 16 Purchase 190 37 7,030 Oct. 6 Purchase 100 38 3,800 400 a $14,570 a Last 400 units purchased are assumed sold (c) Sales revenue = 400 units X $50 = $20,000 (d) Gross profit = Sales revenue − Cost of goods sold = $20,000 − $14,570 = $5,430
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Chapter 06 - Inventory and Cost of Goods Sold 6-3 Requirement 3: Using weighted-average cost, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. Date Transaction Number of units Unit cost Total cost Jan. 1 Beginning Inventory 40 $32 $ 1,280 Apr. 7 Purchase 120 34 4,080 Jul. 16 Purchase 190 37 7,030 Oct. 6 Purchase 100 38 3,800 450 $16,190 Weighted-average cost = $16,190 / 450 units = $35.98 (rounded to the nearest penny). (a) Ending inventory = 50 units X $35.98 = $1,799 (b) Cost of goods sold = 400 units X $35.98 = 14,391 ($1 rounding error) (c) Sales revenue = 400 units X $50 = $20,000 (d) Gross profit = Sales revenue − Cost of goods sold = $20,000 − $14,391 = $5,609
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This note was uploaded on 02/23/2012 for the course MGMT 200 taught by Professor Greigg during the Summer '08 term at Purdue University-West Lafayette.

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Ch06a - Chapter 06 - Inventory and Cost of Goods Sold...

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