# Calculations a jan 1 inventory unit cost total cost

• Homework Help
• 115
• 100% (8) 8 out of 8 people found this document helpful

This preview shows page 73 - 79 out of 115 pages.

Calculations: (a) Jan. 1 inventory unit cost = Total cost / Total number of units = \$1,000 / 50 units = \$20 per unit Sales revenue = Number of crates sold × Sales price per crate Sale 1: = 130 crates × \$40 per crate = \$5,200 Sale 2: = 100 crates × \$50 per crate = \$5,000 Total sales revenue = Sales revenue from Sale 1 + Sales revenue from Sale 2 = \$5,200 + \$5,000 = \$10,200 Total Sales Revenue \$ 10,200 Cost of Goods Sold (5,900) Gross Profit \$ 4,300 Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-73
P6-39B, cont. Requirement 2 Using LIFO, cost of goods sold is \$6,000, ending merchandise inventory is \$200, and gross profit is \$4,200. Perpetual Inventory Record: LIFO Purchases Cost of Goods Sold Inventory on Hand Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan. 1 50 units × \$ 20 (b) = \$ 1,000 \$ 1,000 2 100 units × \$ 25 = \$ 2,500 50 units × \$ 20 = \$ 1,000 \$ 3,500 100 units × \$ 25 = \$ 2,500 5 100 units × \$ 25 = \$ 2,500 \$ 3,100 20 units × \$ 20 = \$ 400 \$ 400 30 units × \$ 20 = \$ 600 16 90 units × \$ 30 = \$ 2,700 20 units × \$ 20 = \$ 400 \$ 3,100 90 units × \$ 30 = \$ 2,700 27 90 units × \$ 30 = \$ 2,700 \$ 2,900 10 units × \$ 20 = \$ 200 \$ 200 10 units × \$ 20 = \$ 200 Totals 190 units \$ 5,200 230 units \$ 6,000 10 units \$ 200 (b) Calculated in Requirement 1. Total Sales Revenue (c) \$ 10,200 Cost of Goods Sold (6,000) Gross Profit \$ 4,200 (c) Calculated in Requirement 1. Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-74
P6-39B, cont. Requirement 3 Using weighted-average, cost of goods sold is \$5,912, ending merchandise inventory is \$288, and gross profit is \$4,288. Perpetual Inventory Record: Weighted-Average Purchases Cost of Goods Sold Inventory on Hand Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan. 1 50 units × \$ 20 (d) = \$ 1,000 2 100 units × \$ 25 = \$ 2,500 150 units × \$ 23.33 (e) = \$ 3,500 5 130 units × \$23.33 = \$ 3,033 20 units × \$ 23.33 = \$ 467 16 90 units × \$ 30 = \$ 2,700 110 units × \$ 28.79 (f) = \$ 3,167 27 100 units × \$28.79 = \$ 2,879 10 units × \$ 28.79 = \$ 288 Totals 190 units \$ 5,200 230 units \$ 5,912 10 units \$ 288 (d) Calculated in Requirement 1. Weighted average cost per unit = Cost of goods available for sale / Number of units available (e) After Purchase 1: = (\$1,000 + \$2,500) / (50 units + 100 units) = \$3,500 / 150 units = \$23.33 per unit (f) After Purchase 2: = (\$467 + \$2,700) / (20 units + 90 units) = \$3,167 / 110 units = \$28.79 per unit Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-75
P6-39B, cont. Total Sales Revenue (g) \$ 10,200 Cost of Goods Sold (5,912) Gross Profit \$ 4,288 (g) Calculated in Requirement 1. Requirement 4 If the business wanted to pay the least amount of income taxes possible, they would choose LIFO. Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-76
P6-40B Requirement 1 Perpetual Inventory Record: FIFO Purchases Cost of Goods Sold Inventory on Hand Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan. 1 45 units × \$ 24 = \$ 1,080 \$ 1,080 3 35 units × \$ 24 = \$ 840 \$ 840 10 units × \$ 24 = \$ 240 \$ 240 8 70 units × \$ 32 = \$ 2,240 10 units × \$ 24 = \$ 240 \$ 2,480 70 units × \$ 32 = \$ 2,240 21 10 units × \$ 24 = \$ 240 \$ 2,000 15 units × \$ 32 = \$ 480 \$ 480 55 units × \$ 32 = \$ 1,760 30 25 units × \$ 47 = \$ 1,175 15 units × \$ 32 = \$ 480 \$ 1,655 25 units × \$ 47 = \$ 1,175 Totals 95 units \$ 3,415 100 units \$ 2,840 40 units \$ 1,655 Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-77
P6-40B, cont.