10.
Ferris Company began 2016 with 6,000 units of its principalproduct. The cost of each unit is $6. Merchandise transactions forthe month of January 2016 are as follows:
Purchases Date ofPurchase Units Unit Cost* Total Cost Jan. 10 5,000 $ 7 $ 35,000 Jan. 18 6,000 8 48,000 Totals 11,000 $ 83,000
*Includes purchase price andcost of freight.
Sales Date of Sale Units Jan. 5 3,000 Jan. 12 2,000 Jan. 20 4,000 Total 9,000
8,000 units were on hand at theend of the month.
Required: Calculate January's ending inventory and cost of goods sold forthe month using each of the following alternatives:
FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost perunit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory BeginningInventory 6,000 $6.00 $36,000 6,000 $6.00 $36,000 $6.00 $0 Purchases: January 10 5,000 $7.00 35,000 $7.00 0 $7.00 0 January 18 6,000 $8.00 48,000 $8.00 0 $8.00 0 Total 17,000 $119,000 6,000 $36,000 $0 LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO # ofunits Cost perunit Cost ofGoods Available for Sale # of unitssold Cost perunit Cost ofGoods Sold # of unitsin ending inventory Cost perunit EndingInventory Beginning Inventory Purchases: January 10 January 18 Total AverageCost Cost ofGoods Available for Sale Cost ofGoods Sold - Average Cost EndingInventory - Average Cost # of units Average Cost per unit Cost of Goods Available for Sale # of units sold Average Cost per Unit Cost of Goods Sold # of units in ending inventory Average Cost per unit Ending Inventory Beginning Inventory 6,000 $36,000 Purchases: January 10 5,000 35,000 January 18 6,000 48,000 Total 17,000 $119,000
PerpetualLIFO: Cost of Goods Available for Sale Cost of Goods Sold - January 5 Cost of Goods Sold - January 12 Cost ofGoods Sold - January 20 Inventory Balance # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units sold Cost per unit Cost of Goods Sold # of unitssold Cost perunit Cost ofGoods Sold # of units in ending inventory Cost per unit Ending Inventory Beg. Inventory Purchases: January 10 January 18 Total
Perpetual Average Inventory on hand Cost of Goods Sold # of units Cost per unit Inventory Value # of units sold Avg.Cost per unit Cost of Goods Sold Beginning Inventory Sale - January5 Subtotal Average Cost Purchase - January 10 Subtotal Average Cost Sale - January12 Subtotal Average Cost Purchase - January18 SubtotalAverage Cost Sale - January 20 Total
10.
| Ferris Company began 2016 with 6,000 units of its principalproduct. The cost of each unit is $6. Merchandise transactions forthe month of January 2016 are as follows:
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Related questions
Ferris Company began 2018 with 4,000 units of its principal product. The cost of each unit is $7. Merchandise transactions for the month of January 2018 are as follows:
| Purchases | |||||||||
| Date of Purchase | Units | Unit Cost* | Total Cost | ||||||
| Jan. 10 | 3,000 | $ | 8 | $ | 24,000 | ||||
| Jan. 18 | 4,000 | 9 | 36,000 | ||||||
| Totals | 7,000 | 60,000 | |||||||
*Includes purchase price and cost of freight.
| Sales | ||
| Date of Sale | Units | |
| Jan. 5 | 2,000 | |
| Jan. 12 | 1,000 | |
| Jan. 20 | 3,000 | |
| Total | 6,000 | |
5,000 units were on hand at the end of the month.
Required:
Calculate January's ending inventory and cost of goods sold for the month using each of the following alternatives:
1. FIFO, periodic system.
2. LIFO, periodic system.
3. LIFO, perpetual system.
4. Average cost, periodic system.
5. Average cost, perpetual system.
| Periodic Inventory Method | |||||||||
| Better Bottles, Inc. uses a PERIODIC inventory system and has the following information available: | |||||||||
| Description | # of Units | Cost per Unit | Total Cost | ||||||
| Beginning inventory | 20 | $20.00 | $400 | ||||||
| Jan 5 sold | 15 | ||||||||
| Jan 15 purchase | 27 | $22.00 | 594 | ||||||
| Jan 18 sold | 21 | ||||||||
| Jan 20 purchase | 33 | $30.00 | 990 | ||||||
| Total goods available for sale | 80 | $1,984 | |||||||
| Total goods sold | 36 | ||||||||
| Required: | |||||||||
| 1 | Calculate both Cost of goods sold and Ending inventory using the Periodic FIFO Method. | ||||||||
| 2 | Calculate both Cost of good sold and Ending Inventory using Periodic LIFO Method. | ||||||||
| 3 | Use your calculations from 1-2 and complete the Income Statement. | ||||||||
| The company income tax rate: | 0.25 | ||||||||
| 1 | FIFO Cost of Goods Sold - PERIODIC | ||||||||
| Units Sold Taken From: | # of Units | Cost per Unit | Total Cost | ||||||
| Total Cost of Goods Sold FIFO | |||||||||
| FIFO Ending Inventory - PERIODIC | |||||||||
| Inventory Available | # of Units | Cost per Unit | Total Cost | ||||||
| Beginning inventory | |||||||||
| +Purchase | |||||||||
| +Purchase | |||||||||
| (Less Cost of Goods Sold) | |||||||||
| Ending Inventory FIFO | |||||||||
| 2 | LIFO Cost of Goods Sold - PERIODIC | ||||||||
| Units Sold Taken From: | # of Units | Cost per Unit | Total Cost | ||||||
| Total Cost of Goods Sold LIFO | |||||||||
| LIFO Ending Inventory - PERIODIC | |||||||||
| Inventory Available | # of Units | Cost per Unit | Total Cost | ||||||
| Beginning inventory | |||||||||
| +Purchase | |||||||||
| +Purchase | |||||||||
| (Less Cost of Goods Sold) | |||||||||
| Ending Inventory LIFO | |||||||||
| 3 | Income Statement - Periodic Inventory Method | ||||||||
| FIFO | LIFO | ||||||||
| Sales revenue, net | 25,000 | 25,000 | |||||||
| Cost of goods sold | |||||||||
| Gross profit | |||||||||
| Operating expenses | 8,000 | 8,000 | |||||||
| Operating income before tax | |||||||||
| Income tax expense | |||||||||
| Net income | |||||||||
21. Altira Corporation uses a periodic inventory system. Thefollowing information related to its merchandise inventory duringthe month of August 2016 is available: |
| Aug.1 | Inventory onhandâ2,000 units; cost $6.10 each. |
| 8 | Purchased 10,000units for $5.50 each. |
| 14 | Sold 8,000 units for$12.00 each. |
| 18 | Purchased 6,000units for $5.00 each. |
| 25 | Sold 7,000 units for$11.00 each. |
| 31 | Inventory onhandâ3,000 units. |
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Determine the inventory balance Altira would report in itsAugust 31, 2016, balance sheet and the cost of goods sold it wouldreport in its August 2016 income statement using each of thefollowing cost flow methods: (Round "Average Cost per Unit"to 2 decimal places.)
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