Horngren';s Financial and Managerial Accounting solution_06

Total cost quantity unit cost total cost nov 1 17

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Total Cost Quantity Unit Cost Total Cost Nov. 1 17 units × $ 68 = $ 1,156 $ 1,156 6 7 units × $ 68 = $ 476 $ 476 10 units × $ 68 = $ 680 $ 680 8 20 units × $ 74 = $ 1,480 10 units × $ 68 = $ 680 $ 2,160 20 units × $ 74 = $ 1,480 17 10 units × $ 68 = $ 680 $ 1,420 10 units × $ 74 = $ 740 $ 740 10 units × $ 74 = $ 740 30 4 units × $ 74 = $ 296 $ 296 6 units × $ 74 = $ 444 $ 444 Totals 20 units $ 1,480 31 units $ 2,192 6 units $ 444 Using FIFO, the cost of ending merchandise inventory is $444 and cost of goods sold is $2,192. Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-23
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E6-18, cont. Requirement 2 Date Accounts and Explanation Debit Credit Nov. 6 Accounts Receivable 896 (a) Sales Revenue 896 (a) Sale on account. Nov. 6 Cost of Goods Sold 476 (d) Merchandise Inventory 476 (d) Recorded the cost of goods sold. Nov. 8 Merchandise Inventory 1,480 Accounts Payable 1,480 Purchased inventory on account. Nov. 17 Accounts Receivable 2,560 (b) Sales Revenue 2,560 (b) Sale on account. Nov. 17 Cost of Goods Sold 1,420 (d) Merchandise Inventory 1,420 (d) Recorded the cost of goods sold. Nov. 30 Accounts Receivable 512 (c) Sales Revenue 512 (c) Sale on account. Nov. 30 Cost of Goods Sold 296 (d) Merchandise Inventory 296 (d) Recorded the cost of goods sold. Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-24
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E6-18, cont. Calculations: Total sales revenue = Number of putters sold × Sales price per putter (a) Nov. 6 sale: = 7 putters × $128 per putter = $896 (b) Nov. 17 sale: = 20 putters × $128 per putter = $2,560 (c) Nov. 30 sale: = 4 putters × $128 per putter = $512 (d) Calculated in Requirement 1. Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-25
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E6-19 Requirement 1 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 Nov. 1 17 units × $ 68 = $ 1,156 $ 1,156 6 7 units × $ 68 = $ 476 $ 476 10 units × $ 68 = $ 680 $ 680 8 20 units × $ 74 = $ 1,480 10 units × $ 68 = $ 680 $ 2,160 20 units × $ 74 = $ 1,480 17 20 units × $ 74 = $ 1,480 $ 1,480 10 units × $ 68 = $ 680 $ 680 30 4 units × $ 68 = $ 272 $ 272 6 units × $ 68 = $ 408 $ 408 Totals 20 units $ 1,480 31 units $ 2,228 6 units $ 408 Using LIFO, the cost of ending merchandise inventory is $408 and cost of goods sold is $2,228. Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-26
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E6-19, cont. Requirement 2 Date Accounts and Explanation Debit Credit Nov. 6 Accounts Receivable 896 (a) Sales Revenue 896 (a) Sale on account. Nov. 6 Cost of Goods Sold 476 (d) Merchandise Inventory 476 (d) Recorded the cost of goods sold. Nov. 8 Merchandise Inventory 1,480 Accounts Payable 1,480 Purchased inventory on account. Nov. 17 Accounts Receivable 2,560 (b) Sales Revenue 2,560 (b) Sale on account. Nov. 17 Cost of Goods Sold 1,480 (d) Merchandise Inventory 1,480 (d) Recorded the cost of goods sold. Nov. 30 Accounts Receivable 512 (c) Sales Revenue 512 (c) Sale on account. Nov. 30 Cost of Goods Sold 272 (d) Merchandise Inventory 272 (d) Recorded the cost of goods sold. Horngren’s Financial & Managerial Accounting   4/e    Solutions Manual 6-27
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E6-19, cont.
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