1 compute cost of goods available for sale and units

This preview shows page 23 - 30 out of 69 pages.

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

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture