Calculations a jan 1 inventory unit cost total cost

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.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture