ACC 100 Chapter 6: Inventories and Costs of Goods Sold
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During July 2014, Micanopy, sold 500 units of its productsEmpire for $8,000. The following units were available.
Units Cost
BeginningInventory 200 $2
Purchase1 80 $4
Purchase2 120 $6
Purchase3 300 $9
Purchase4 180 $12
A sale of 500 units was made after purchase 3. Of the unitssold, 200 came from beginning inventory and 300 came from purchase3.
Determine the costs of goods available for sale and endinginventory in units. Then determine the costs that should beassigned to cost of goods sold and ending inventory under ach ofthe following assumptions. (For each alternative, show the grossmargin. Round unit costs to cents and totals to dollars.)
Costs are assigned under the periodic inventory system using a.)the specific identification method, b) the average-cost method, c.)FIFO method and d.) LIFO method
Costs are assigned under the perpetual inventory system usinga.) the average-cost method, b.) the FIFO method, and c) the LIFOmethod
E7A. Periodic and PerpetualSystems and Inventory Costing Methods | ||||||||||||||||
Cost of goods available forsale and ending inventory in units | ||||||||||||||||
Units | Cost | Total | ||||||||||||||
Beginninginventory | 200 | $ 2 | $ 400 | |||||||||||||
Purchase 1 | 80 | 4 | 320 | |||||||||||||
Purchase 2 | 120 | 6 | 720 | |||||||||||||
Purchase 3 | 300 | 9 | 2,700 | |||||||||||||
Purchase 4 | 180 | 12 | 2,160 | |||||||||||||
Cost of goods available forsale | 880 | $6,300 | ||||||||||||||
Sale in units | 500 | |||||||||||||||
Ending inventory inunits | 380 | |||||||||||||||
1. | Periodic inventorysystem | |||||||||||||||
a. | Specific identificationmethod: | |||||||||||||||
Sales | $8,000 | |||||||||||||||
Cost of goods available forsale | ||||||||||||||||
Less endinginventory* | ||||||||||||||||
Cost of goodssold | ||||||||||||||||
Gross margin | $4,900 | |||||||||||||||
* | Purchase 1 | 80 | units |
Use the following information for the Exercisesbelow.
[The following information applies to the questionsdisplayed below.]
Laker Company reported the following January purchases and salesdata for its only product.
Date | Activities | Units Acquired at Cost | Units sold at Retail | ||||||||||||||
Jan. | 1 | Beginning inventory | 140 | units | @ | $ | 6.00 | = | $ | 840 | |||||||
Jan. | 10 | Sales | 100 | units | @ | $ | 15 | ||||||||||
Jan. | 20 | Purchase | 60 | units | @ | $ | 5.00 | = | 300 | ||||||||
Jan. | 25 | Sales | 80 | units | @ | $ | 15 | ||||||||||
Jan. | 30 | Purchase | 180 | units | @ | $ | 4.50 | = | 810 | ||||||||
Totals | 380 | units | $ | 1,950 | 180 | units | |||||||||||
The Company uses a perpetual inventory system. For specificidentification, ending inventory consists of 200 units, where 180are from the January 30 purchase, 5 are from the January 20purchase, and 15 are from beginning inventory.
Exercise 6-3 Perpetual: Inventory costing methods LO P1
Required:
1. Complete the table to determine the costassigned to ending inventory and cost of goods sold using specificidentification.
2. Determine the cost assigned to ending inventoryand to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventoryand to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventoryand to cost of goods sold using LIFO.
Required 3
Required 4
Complete the table to determine the cost assigned to endinginventory and cost of goods sold using specific identification.
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Determine the cost assigned to ending inventory and to cost ofgoods sold using weighted average. (Round cost per unit to 2decimal places.)
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Determine the cost assigned to ending inventory and to cost ofgoods sold using FIFO.
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Determine the cost assigned to ending inventory and to cost ofgoods sold using LIFO.
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