Chap005wildtextbook(1)

# On august 25 the company sold 20 bikes d a t e p u r

This preview shows pages 17–25. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: On August 25, the company sold 20 bikes. D a t e P u r c h a s e s C o s t o f G o o d s S o l d I n v e n t o r y B a l a n c e A u g . 1 1 0 @ 9 1 \$ = 9 1 0 \$ 9 1 0 \$ A u g . 1 5 1 5 @ 1 0 6 \$ = 1 , 5 9 0 \$ 2 , 5 0 0 \$ A u g . 2 5 1 5 @ 1 0 6 \$ = 1 , 5 9 0 \$ 5 @ 9 1 \$ = 4 5 5 \$ 4 5 5 \$ 5-17 Last-In, First-Out (LIFO) The Cost of Goods Sold for the August 25 sale is \$2,045. After this sale, there are five units in inventory at \$455: 5 @ \$91 D a t e P u r c h a s e s C o s t o f G o o d s S o l d I n v e n t o r y B a l a n c e A u g . 1 1 0 @ 9 1 \$ = 9 1 0 \$ 9 1 0 \$ A u g . 1 5 1 5 @ 1 0 6 \$ = 1 , 5 9 0 \$ 2 , 5 0 0 \$ A u g . 2 5 1 5 @ 1 0 6 \$ = 1 , 5 9 0 \$ 5 @ 9 1 \$ = 4 5 5 \$ 4 5 5 \$ 5-18 Da te Purchases Cost o f Goods So ld Inven tory Ba lance Aug . 1 10 @ 91 \$ = 910 \$ 910 \$ Aug . 3 15 @ 106 \$ = 1 ,590 \$ 2 ,500 \$ Aug . 14 15 @ 106 \$ = 1 ,590 \$ 5 @ 91 \$ = 455 \$ 455 \$ Last-In, First-Out (LIFO) Balance Sheet Inventory = \$455 Income Statement COGS = \$2,045 5-19 Last-In, First-Out (LIFO) Aug. 15 Merchandise inventory 1,590 Accounts payable 1,590 Aug. 25 Accounts receivable 2,600 Sales 2,600 Aug. 25 Cost of goods sold 2,045 Merchandise inventory 2,045 Here are the entries to record the purchases and sales entries. The numbers in red are determined by the cost flow assumption used. All purchases and sales are made on credit. The selling price of inventory was as follows: 8/25 \$130 5-20 Weighted Average When a unit is sold, the average cost of each unit in inventory is assigned to cost of goods sold. Cost of Goods Available for Sale Units on hand on the date of sale ÷ 5-21 Cost of goods available for sale 2,500 \$ Total units in inventory 25 Weighted average cost per unit 100 \$ ÷ D a t e P u r c h a s e s C o s t o f G o o d s S o l d I n v e n t o r y B a l a n c e A u g . 1 1 0 @ 9 1 \$ = 9 1 0 \$ 9 1 0 \$ A u g . 1 5 1 5 @ 1 0 6 \$ = 1 , 5 9 0 \$ 2 , 5 0 0 \$ A u g . 2 5 2 0 @ 1 0 0 \$ = 2 , 0 0 0 \$ 5 0 0 \$ Weighted Average First, we need to compute the weighted average cost per unit of items in inventory. The Cost of Goods Sold for the August 25 sale is \$2,000. After this sale, there are five units in inventory at \$500: 5-22 Date Purchases Cost of Goods So ld Inventory Ba lance Aug. 1 10 @ 91 \$ = 910 \$ 910 \$ Aug. 3 15 @ 106 \$ = 1,590 \$ 2,500 \$ Aug. 14 20 @ 100 \$ = 2,000 \$ 500 \$ Weighted Average Balance Sheet Inventory = \$500 Income Statement COGS = \$2,000 5-23 Weighted Average Aug. 15 Merchandise inventory 1,590 Accounts payable 1,590 Aug. 25 Accounts receivable 2,600 Sales 2,600 Aug. 25 Cost of goods sold 2,000 Merchandise inventory 2,000 Here are the entries to record the purchases and sales entries for Trekking. The numbers in red are determined by entries for Trekking....
View Full Document

{[ snackBarMessage ]}

### Page17 / 32

On August 25 the company sold 20 bikes D a t e P u r c h a...

This preview shows document pages 17 - 25. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online