Calculations cost retail beginning merchandise

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Calculations:CostRetailBeginning Merchandise Inventory $ 108,000$ 129,600Plus: Net Purchases (a)2,928,0003,514,000Goods Available for Sale$ 3,036,0003,643,600Less: Net Sales Revenue1,200,000Ending Merchandise Inventory at Retail$ 2,443,600Estimated Ending Merchandise Inventory at Cost($2,443,600 × 83%(b))$ 2,028,188(a)CostRetailPurchases$ 3,000,000$ 3,600,000Purchase Discounts(58,000)(70,000)Purchase Returns and Allowances(14,000)(16,000)Net Purchases$ 2,928,000$ 3,514,000(b)Cost to retail ratio=$3,036,000 / $3,643,600=83% Requirement 2PAINTING SUPPLIESIncome Statement (Partial)Month Ended March 31 2015Net Sales Revenue$ 1,200,000Cost of Goods Sold (c)1,007,812Gross Profit $ 192,188Horngren’s Accounting   10/e    Solutions Manual6-74
Calculations:(c)Cost of Goods Available for Sale$ 3,036,000Estimated Cost of Ending Merchandise Inventory(2,028,188)Estimated Cost of Goods Sold$ 1,007,812Horngren’s Accounting   10/e    Solutions Manual6-75
Problems (Group B)P6-39BRequirement 1Using FIFO, cost of goods sold is $5,900, ending merchandise inventory is $300, and gross profit is $4,300.Perpetual Inventory Record: FIFO PurchasesCost of Goods SoldInventory on HandDateQuantityUnitCostTotal CostQuantityUnitCostTotal CostQuantityUnitCostTotal CostJan. 150 units× $ 20 (a)= $ 1,000$ 1,0002100 units× $ 25= $ 2,50050 units× $ 20= $ 1,000$ 3,500100 units× $ 25= $ 2,500550 units× $ 20= $ 1,000$ 3,00020 units× $ 25= $ 500$ 50080 units× $ 25= $ 2,0001690 units× $ 30= $ 2,70020 units× $ 25= $ 500$ 3,20090 units× $ 30= $ 2,7002720 units× $ 25= $ 500$ 2,90010 units× $ 30= $ 300$ 30080 units× $ 30= $ 2,400Totals190 units$ 5,200230 units$ 5,90010 units$ 300Horngren’s Accounting   10/e    Solutions Manual6-76
P6-39B, cont.Calculations:(a)Jan. 1 inventory unit cost=Total cost / Total number of units=$1,000 / 50 units=$20 per unitSales revenue=Number of crates sold × Sales price per crateSale 1:=130 crates × $40 per crate=$5,200Sale 2:=100 crates × $50 per crate=$5,000Total sales revenue=Sales revenue from Sale 1 + Sales revenue from Sale 2=$5,200 + $5,000=$10,200Total Sales Revenue$ 10,200Cost of Goods Sold(5,900)Gross Profit$ 4,300Horngren’s Accounting   10/e    Solutions Manual6-77
P6-39B, cont.Requirement 2Using LIFO, cost of goods sold is $6,000, ending merchandise inventory is $200, and gross profit is $4,200.Perpetual Inventory Record: LIFO PurchasesCost of Goods SoldInventory on HandDateQuantityUnitCostTotal CostQuantityUnitCostTotal CostQuantityUnitCostTotal CostJan. 150 units× $ 20 (b)= $ 1,000$ 1,0002100 units× $ 25= $ 2,50050 units× $ 20= $ 1,000$ 3,500100 units× $ 25= $ 2,5005100 units× $ 25= $ 2,500$ 3,10020 units× $ 20= $ 400$ 40030 units× $ 20= $ 6001690 units× $ 30= $ 2,70020 units× $ 20= $ 400$ 3,10090 units× $ 30= $ 2,7002790 units× $ 30= $ 2,700$ 2,90010 units× $ 20= $ 200$ 20010 units× $ 20= $ 200Totals190 units$ 5,200230 units$ 6,00010 units$ 200(b)Calculated in Requirement 1.Total Sales Revenue(c)$ 10,200Cost of Goods Sold(6,000)Gross Profit$ 4,200(c)Calculated in Requirement 1.Horngren’s Accounting   10/e    Solutions Manual6-78
P6-39B, cont.Requirement 3Using weighted-average, cost of goods sold is $5,912, ending merchandise inventory is $288, and gross profit is $4,288.Perpetual Inventory Record: Weighted-AveragePurchasesCost of Goods SoldInventory on HandDateQuantityUnitCostTotal CostQuantityUnitCostTotal CostQuantityUnitCostTotal CostJan. 150 units× $ 20 (d)= $ 1,0002100 units× $ 25= $ 2,500150 units× $ 23.33 (e)= $ 3,5005130 units× $23.33= $ 3,03320 units× $ 23.33= $ 4671690 units× $ 30= $ 2,700110 units× $ 28.79 (f)= $ 3,16727100 units× $28.79= $ 2,87910 units× $ 28.79= $ 288Totals190 units$ 5,200230 units$ 5,91210 units$ 288(d)Calculated in Requirement 1.

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