2.How much is the dollar value of the ending inventory on December 31 and the cost of goodssold during December if the LIFO inventory method is used?
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STEP 3: Solve for COGS – 84 units
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3.How much is the dollar value of the ending inventory on December 31 and the cost of goodssold during December if the FIFO inventory method is used?
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- EI $950COGS = $3875
Problem B - I— Solution1.d4.b7.a10.a2.c5.d8.a3.b6.a9.bSolution 1-6Oct. 5Accounts Payable....................................................................................................1,600Cash.............................................................................................................1,600Oct. 9Inventory..................................................................................................................22,000Accounts Payable........................................................................................22,000Oct. 12Inventory..................................................................................................................110Cash.............................................................................................................110Oct. 17Accounts Payable....................................................................................................22,000Inventory......................................................................................................660Cash.............................................................................................................21,340
Oct. 20Accounts Receivable...............................................................................................8,000Sales............................................................................................................8,000Cost of Goods Sold...................................................................................................3,200Inventory.......................................................................................................3,200Oct. 26Sales Returns and Allowances................................................................................300Accounts Receivable...................................................................................300Inventory...................................................................................................................180Cost of Goods Sold.......................................................................................180Problem B - II— Solution-41.Inventory turnover: $528,000 ÷ [($52,000 + $68,000) ÷ 2] = 8.8 times2.Days in inventory: 365 ÷ 8.8 = 41.5 days3.Accounts receivable turnover: $904,500 ÷ [($60,000 + $74,000) ÷ 2] = 13.5 times4.Average collection period: 365 ÷ 13.5 = 27.0 daysProblem B - VII— Solution-4Jul.1Notes Receivable.....................................................................................................8,400Accounts Receivable...............................................................................8,400Jul.31Interest Receivable..................................................................................................35Interest Revenue.....................................................................................35Oct.1Cash..................................................................................................................8,505Notes Receivable.....................................................................................8,400Interest Receivable..................................................................................105Oct.1Accounts Receivable...............................................................................................8,505Notes Receivable.....................................................................................8,400Interest Revenue.....................................................................................105Problem B - V— Solution-3May20Allowance for Doubtful Accounts.........................................................................1,240Accounts Receivable—Barack Obama....................................................1,240Aug. 7Accounts Receivable—Barack Obama................................................................300Allowance for Doubtful Accounts.............................................................300Cash..................................................................................................................300Accounts Receivable—Barack Obama....................................................300
Dec.31Bad Debt Expense...............................................................................................1,935Allowance for Doubtful Accounts.............................................................1,935[($121,0001.5%) + $120]Problem B - IV— Solution-61.Weighted average cost = ($400 + $2,025 + $1,500 + $900) ÷ 100 = $48.25Units available100Units sold84Ending inventory16× $48.25 = $7722.Ending InventoryCost of goods sold12/110 units × $40 =$400Cost of goods available$4,82512/86units × $45 =270Less: Ending inventory67016units$670Cost of goods sold$4,1553.Ending InventoryCost of goods sold12/2615 units × $60 =$900Cost of goods available$4,82512/151unit × $50 =50Less: Ending inventory95016units$950Cost of goods sold$3,875
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FIFO and LIFO accounting, COGS
