# Intermediate Accounting I 4a 2

Question 1

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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