AC201SecondHourExamCWA

# 4 0 2 x 0 2 7 6 problem 3 30 points a company made

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4 , 0 0 0 - \$ 2 0 0 ) x . 0 2 = \$ 7 6

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Problem #3 ( 30 points ) A company made the following merchandise purchases and sales during the month of May: M a y 1 p u r c h a s e d 3 8 0 u n i t s a t \$ 1 5 e a c h M a y 5 p u r c h a s e d 2 7 0 u n i t s a t \$ 1 7 e a c h M a y 1 0 s o l d 4 0 0 u n i t s a t \$ 5 0 e a c h M a y 2 0 p u r c h a s e d 3 0 0 u n i t s a t \$ 2 2 e a c h M a y 2 5 s o l d 4 0 0 u n i t s a t \$ 5 0 e a c h There was no beginning inventory. If the company uses the FIFO periodic inventory method, what would be the cost of the ending inventory? 13. 3 8 0 u n i t s x \$ 1 5 e a c h = \$ 5 , 7 0 0 2 7 0 u n i t s x \$ 1 7 e a c h = 4 , 5 9 0 3 0 0 u n i t s x \$ 2 2 e a c h = 6 , 6 0 0 9 5 0 u n i t s \$ 1 6 , 8 9 0 8 0 0 u n i t s s o l d 1 5 0 u n i t s i n e n d i n g i n v e n t o r y Cost of ending inventory = 150 x \$22 each = \$3,300 Page 7
Answer Key 1. B 2. C 3. A 4. B 5. B 6. A 7. A 8. A 9. B 10. B 11. D e c . 3 1 R e v e n u e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9 , 5 0 0 I n c o m e S u m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9 , 5 0 0 3 1 I n c o m e S u m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 , 5 0 0 S a l a r i e s E x p e n s e . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 , 2 5 0 O t h e r O p e r a t i n g E x p e n s e s . . . . . . . . . . . . . 5 , 2 5 0 3 1 I n c o m e S u m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 , 0 0 0 K a t e S m i t h , C a p i t a l . . . . . . . . . . . . . . . . . . . . . . . 3 , 0 0 0 3 1 K a t e S m i t h , C a p i t a l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 , 5 0 0 K a t e S m i t h , W i t h d r a w a l s . . . . . . . . . . . . . . . 1 , 5 0 0 12. O c t o b e r 6 : M e r c h a n d i s e I n v e n t o r y . . . . . . . . . . . . . . . . . . . . . . . 4 , 0 0 0 A c c o u n t s P a y a b l e . . . . . . . . . . . . . . . . . . . 4 , 0 0 0 O c t o b e r 8 : A c c o u n t s P a y a b l e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 0 0 M e r c h a n d i s e I n v e n t o r y . . . . . . . . . . . 2 0 0 O c t o b e r 1 5 : A c c o u n t s P a y a b l e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 , 8 0 0 M e r c h a n d i s e I n v e n t o r y . . . . . . . . . . . 7 6 C a s h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 , 7 2 4 C a l c u l a t i o n : D i s c o u n t = ( \$ 4 , 0 0 0 - \$ 2 0 0 ) x . 0 2 = \$ 7 6 13.

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3 8 0 u n i t s x \$ 1 5 e a c h = \$ 5 , 7 0 0 2 7 0 u n i t s x \$ 1 7 e a c h = 4 , 5 9 0 3 0 0 u n i t s x \$ 2 2 e a c h = 6 , 6 0 0 9 5 0 u n i t s \$ 1 6 , 8 9 0 8 0 0 u n i t s s o l d 1 5 0 u n i t s i n e n d i n g i n v e n t o r y Cost of ending inventory = 150 x \$22 each = \$3,300 Page 9
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