1 compute cost of goods available for sale and units

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1. Compute cost of goods available for sale and units available for sale Beginning inventory ....................... 50 units @ \$50 \$ 2,500 March 5 200 units @ \$55 11,000 March 18 .......................................... 60 units @ \$60 3,600 March 25 .......................................... 100 units @ \$62 6,200 Units available ................................. 410 units Cost of goods available for sale \$23,300 2. Units in ending inventory Units available (from part 1 ) ........... 410 units Less: Units sold (210 + 80) ............. 290 units Ending Inventory (units) ................. 120 units 3a. FIFO perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 50 @ \$50 = \$ 2,500 Mar. 5 200 @ \$55 = \$11,000 50 @ \$50 200 @ \$55 = \$13,500 Mar. 9 50 @ \$50 = \$ 2,500 160 @ \$55 = \$ 8,800 40 @ \$55 = \$ 2,200 Mar. 18 60 @ \$60 = \$ 3,600 40 @ \$55 60 @ \$60 = \$ 5,800 Mar. 25 100 @ \$62 = \$ 6,200 40 @ \$55 60 @ \$60 100 @ \$62 = \$12,000 Mar. 29 40 @ \$55 = \$ 2,200 40 @ \$60 = \$ 2,400 20 @ \$60 100 @ \$62 = \$ 7,400 \$15,900 5-23
Chapter 5 – Accounting for Inventories Problem 5-1A (Continued) 3b. LIFO perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 50 @ \$50 = \$ 2,500 Mar. 5 200 @ \$55 = \$11,000 50 @ \$50 200 @ \$55 = \$13,500 Mar. 9 200 @ \$55 = \$11,000 10 @ \$50 = \$ 500 40 @ \$50 = \$ 2,000 Mar. 18 60 @ \$60 = \$ 3,600 40 @ \$50 60 @ \$60 = \$ 5,600 Mar. 25 100 @ \$62 = \$ 6,200 40 @ \$50 60 @ \$60 100 @ \$62 = \$11,800 Mar. 29 80 @ \$62 = \$ 4,960 ______ 40 @ \$50 60 @ \$60 20 @ \$62 = \$ 6,840 \$16,460 3c. Weighted Average perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 50 @ \$50 = \$ 2,500 Mar. 5 200 @ \$55 = \$11,000 50 @ \$50 200 @ \$55 = \$13,500 (avg. = \$54) Mar. 9 210 @ \$54 = \$11,340 40 @ \$54 = \$ 2,160 (avg. = \$54) Mar. 18 60 @ \$60 = \$ 3,600 40 @ \$54 60 @ \$60 = \$ 5,760 (avg. = \$57.60) Mar. 25 100 @ \$62 = \$ 6,200 40 @ \$54 60 @ \$60 100 @ \$62 = \$11,960 (avg. = \$59.80) Mar. 29 80 @ \$59.8 = \$ 4,784 120 @ \$59.80 = \$ 7,176 ________ (avg. = \$59.80) \$16,124 5-24
Chapter 5 – Accounting for Inventories Problem 5-1A (Concluded) 3d. Specific Identification Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 50 @ \$50 = \$ 2,500 Mar. 5 200 @ \$55 = \$11,000 50 @ \$50 200 @ \$55 = \$13,500 Mar. 9 40 @ \$50 = \$ 2,000 170 @ \$55 = \$ 9,350 10 @ \$50 30 @ \$55 = \$ 2,150 Mar. 18 60 @ \$60 = \$ 3,600 10 @ \$50 30 @ \$55 60 @ \$60 = \$ 5,750 Mar. 25 100 @ \$62 = \$ 6,200 10 @ \$50 30 @ \$55 60 @ \$60 100 @ \$62 = \$11,950 Mar. 29 20 @ \$60 = \$ 1,200 60 @ \$62 = \$ 3,720 ______ 10 @ \$50 30 @ \$55 40 @ \$60 40 @ \$62 = \$ 7,030 \$16,270 4. FIFO LIFO Weighted Average Specific Identifi- cation Sales* ................................... \$25,450 \$25,450 \$25,450 \$25,450 Less: Cost of goods sold .... 15,900 16,460 16,124 16,270 Gross profit ......................... \$ 9,550 \$ 8,990 \$ 9,326 \$ 9,180 *Sales = (210 units x \$85) + (80 units x \$95) = \$25,450 5-25
Chapter 5 – Accounting for Inventories Problem 5-2A (40 minutes) 1. Calculate cost of goods available for sale and units available for sale Beginning inventory ....................... 600 units @ \$44 \$26,400 Feb. 10 200 units @ \$40 8,000 Mar. 13 ............................................ 100 units @ \$20 2,000 Aug. 21 ............................................ 160 units @ \$60 9,600 Sept. 5 ............................................ 280 units @ \$48 13,440 Units available ................................. 1,340 units Cost of goods available for sale \$59,440 2. Units in ending inventory Units available (from part 1 ) ........... 1,340 Less: Units sold (400+200) ............. 600 Ending Inventory (units) ................. 740 5-26
Chapter 5 – Accounting for Inventories Problem 5-2A (Continued) 3a. FIFO perpetual Date Goods Purchasd Cost of Goods Sold Inventory Balance 1/1 600 @ \$44 = \$26,400 2/10 200 @ \$40 = \$ 8,000 600 @ \$44 200 @ \$40 = \$34,400 3/13 100 @ \$20 = \$ 2,000 600 @ \$44 200 @ \$40 = \$36,400 100 @ \$20 3/15 400 @ \$44 = \$17,600 200 @ \$44 200 @ \$40 100 @ \$20 8/21 160 @ \$60 = \$ 9,600 200 @ \$44 200 @ \$40 100 @ \$20 = \$28,400 160 @ \$60 9/5 280 @ \$48 = \$13,440 200 @ \$44 200 @ \$40 100 @ \$20 = \$41,840 160 @ \$60 280 @ \$48 9/10 200 @ \$44 = \$ 8,800 ______ 200 @ \$40 100 @ \$20 160 @ \$60 = \$33,040 280 @ \$48 \$26,400 FIFO Alternate Solution Format Cost of goods available for sale \$59,440 Less: Cost of sales 400 @ \$44 \$17,600 200 @ \$44 8,800 Total cost of goods sold 26,400 Ending Inventory \$33,040 Proof of Ending Inventory 200 @ \$40 \$ 8,000 100 @ 20 2,000 160 @ 60 9,600 280 @ 48 13,440 Ending Inventory .............. 740 units \$33,040 5-27 = \$18,800
Chapter 5 – Accounting for Inventories Problem 5-2A (Continued) 3b. LIFO perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance 1/1 600 @ \$44 = \$26,400 2/10 200 @ \$40 = \$ 8,000 600 @ \$44 200 @ \$40 = \$34,400 3/13 100 @ \$20 = \$ 2,000 600 @ \$44 200 @ \$40 = \$36,400 100 @ \$20 3/15 100 @ \$20 200 @ \$40 100 @ \$44 = \$14,400 500 @ \$44 = \$22,000 8/21 160 @ \$60 = \$ 9,600 500 @ \$44 160 @ \$60 = \$31,600 9/5 280 @ \$48 = \$13,440 500 @ \$44 160 @ \$60 = \$45,040 280 @ \$48 9/10 200 @ \$48 = \$ 9,600 ______ 500 @ \$44 160 @ \$60 = \$35,440 80 @ \$48 \$24,000 LIFO alternate solution format Cost of goods available for sale \$59,440 Less: Cost of sales 100 @ \$20 \$ 2,000 200 @ 40 8,000 100 @ 44 4,400 200 @ 48 9,600 Cost of Goods Sold 24,000 Ending Inventory \$35,440 Proof of Ending Inventory 500 @ \$44 \$22,000 160 @ 60 9,600 80 @ 48 3,840 Ending Inventory… 740 units \$35,440 5-28
Chapter 5 – Accounting for Inventories Problem 5-2A (Continued) 3c. Specific Identification