Intermediate Accounting I 4a 2

Question 1

  1. COGS adjustment

 

February 25, 2011              LIFO reserve (29.6-27.2)                         $2.4 million

Cost of goods sold                                          $2.4 million

 

  1. Cost of goods sold

Cost of goods sold under FIFO = $2.4 million+$2236.7 =$2,239.1

 

Question 2

  1. FIFO Periodic
Units Available for Sale = 6000 + 5000 + 6000 = 17,000
Units Sold = 3000 + 2000 + 4000 = 9,000
Units in Ending Inventory = 17,000 – 9,000 = 8,000
       
Cost of Goods Sold Units Unit Cost Total
Sales From Jan 1 Inventory 6000 $8.00 $48,000
Sales From Jan 10 Purchase 3000 $9.00 $27,000
  9,000   $75,000
       
Ending Inventory Units Unit Cost Total
Inventory From Jan 10 Purchase 2000 $9.00 $18,000
Inventory From Aug 18 Purchase 6000 $10.00 $60,000

$78,000

 

  1. LIFO Periodic
Units Available for Sale = 6000 + 5000 + 6000 = 17,000
Units Sold = 3000 + 2000 + 4000 = 9,000
Units in Ending Inventory = 17,000 – 9,000 = 8,000
       
Cost of Goods Sold Units Unit Cost Total
Sales From Jan 18 Purchase 6000 $10.00 $60,000
Sales From Jan 10 Purchase 3000 $9.00 $27,000
  9,000   $87,000
       
Ending Inventory Units Unit Cost Total
Inventory From Jan 10 Purchase 2000 $9.00 $18,000
Inventory From Jan 1 Inventory 6000 $8.00 $48,000

$66,000

 

 

  1. LIFO Perpetual
Date Purchases Sales Balance
Jan 1     6000*$8 =$48,00
Jan 5   3000*$8= $24,000 3000*$8= $24,000
Jan 10 5000*$9= $45,000   3000*$8= $24,000

5000*$9= $45,000

Jan 12   2000*$9 + $18,000 3000*$8= $24,000

3000*$9= $27,000

Jan 18 6000*$10 = $60,000   3000*$8= $24,000

3000*$9= $27,000

6000*$10 = $60,000

Jan 20   4000*$10 = $40,000 3000*$8= $24,000

3000*$9= $27,000

2000*$10 = $20,000

 

  1. a) Cost of goods sold= $24,000+18000+40000= $82,000
  2. b) Ending inventory = $24000+27000+20000= $71,000

 

  1. AVCO Periodic
Units Available for Sale = 6000 + 5000 + 6000 = 17,000
Units Sold = 3000 + 2000 + 4000 = 9,000
Units in Ending Inventory = 17,000 – 9,000 = 8,000
       
Weighted Average Unit Cost Units Unit Cost Total
Jan 1 Inventory 6000 $8.00 $48,000
Jan 10 Purchase 5000 $9.00 $45,000
Jan 18 Purchase 6000 $10.00 $60,000
  17,000 * $9.00 $153,000
* $153,000 ÷ 17000      
       
Cost of Goods Sold 9000 $9.00 $81,000
Ending Inventory 8000 $9.00 $72,000

 

  1. AVCO Perpetual

 

Date Purchases Sales Balance
Jan 1     6000*$8 =$48,00
Jan 5   3000*$8= $24,000 3000*$8= $24,000
Jan 10 5000*$9= $45,000   3000*$8= $24,000

5000*$9= $45,000

8000*$8.625 =$69000

Jan 12   2000*$8.625 + $17,250 6000*$8.625 + $51,750
Jan 18 6000*$10 = $60,000   6000*$8.625 + $51,750

6000*$10 = $60,000

12000*$9.3125= $111,750

Jan 20   4000*$9.3125 = $37,250 8000*$9.3125 = $74,500

 

 

 

  1. a) Cost of goods sold= $24000+17250+37250 = $78,500
  2. b) Ending inventory = 8000*$9.3125 = $74,500
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