Ch 5 Notes (Ac221)
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Southeast Missouri State University *
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221
Subject
Accounting
Date
Jan 9, 2024
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docx
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Uploaded by ChefSnakeMaster968
Alternate multi step problems
7a)
Chestnut Corp., a ski shop, opened for business on October 1. It uses a periodic inventory system. The following transactions occurred during the first month of business:
October 1:
Purchased three units from Elm Inc. for $250 total, terms 2/10, n/30, FOB destination.
October 10:
Paid for the October 1 purchase.
October 15:
Sold one unit for $200 cash.
October 18:
Purchased ten units from Wausau Company for $800 total, with terms 2/10, n/30, FOB destination.
October 25:
Sold three units for $200 each, cash.
October 27:
Paid for the October 18 purchase.
Required
1.
Identify and analyze each of the preceding transactions of Chestnut.
2.
Determine the number of units on hand on October 31.
9 left
3.
If Chestnut started the month with $2,000, determine its balance in cash at the end of the month assuming that these are the only transactions that occurred during October. Why has the cash balance decreased when the company reported net income?
$2000 beg bal.
-245 10/10
+200 10/15
+600 10/25
-784 10/30
1771 cash balance
Assets
=
Liabilities
+
Equity
l
Revenue
-
Expenses
=
Net Income
2% x 250 = 5 d/c
1-Oct
A/P 245
-245
purchases 245
-245 250-5=245
10-Oct Cash (245)
A/P (245)
15-Oct Cash 200
200
Sales Rev 200
200
18-Oct
A/P 784
-784
Purchase 784
-784 2% x 800 = 5d/c
25-Oct Cash 600
600
sales rev 600
600 800-16=784
27-Oct cash -784
A/p (784)
Alternate multi step problems
5-13A
Following is an inventory acquisition schedule for Fees Corp. for 2017:
During the year, Fees sold 11,000 units at $30 each. All expenses except cost of goods sold and taxes amounted to $60,000. The tax rate is 30%.
Required
1.
Compute cost of goods sold and ending inventory under each of the following three methods assuming a periodic inventory system: (a) weighted average, (b) FIFO, and (c) LIFO.
129,000
15000 units = $
8.60 weights avg cost
EI 2500 units x 860 = 21,500
CGS 12500 units x 8.60 = 107,500
Alternate multi step problems
2.
Prepare income statements under each of the three methods.
3.
Which method do you recommend so that Fees pays the least amount of taxes during 2017? Explain your answer.
4.
Fees anticipates that unit costs for inventory will increase throughout 2018. Will Fees be able to switch from the method you recommended that it use in 2017 to another method to take advantage of the increase in prices for tax purposes? Explain your answer.
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Related Questions
The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:
Jan. 20
Apr. 21
July 25
Sept. 19
Purchased
Purchased
Purchased
Purchased
Required A
During the year, The Shirt Shop sold 810 T-shirts for $20 each.
Required
a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow
assumptions: (1) FIFO, (2) LIFO, and (3) weighted average.
b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
400 units
200 units
280 units
90 units
Complete this question by entering your answers in the tabs below.
Required B
Ending inventory
@
@
FIFO
$8 = $3,200
$10 =
2,000
$13 =
3,640
$15 =
1,350
Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow
assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round intermediate calculations to 2 decimal places and final
answers to nearest whole dollar…
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Current Attempt in Progress Bramble Ltd. had beginning inventory of 54 units that cost $105
each. During September, the company purchased 206 units on account at $105 each, returned
6 units for credit, and sold on account 153 units at $201 each. Prepare journal entries for the
September transactions, assuming that Bramble uses a periodic inventory system. (Credit
account titles are automatically indented when the amount is entered. Do not indent manually.
If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List
all debit entries before credit entries.) Account Titles and Explanation Debit Credit (To record
purchase on account) (To record purchase return)
Preparjalneries for the Sopomber tramming that
perdicimentary
titles are automatically indented whes the amount is entered De not indest manually. If ne entry is required,
Entry for the account ctles and enter O for the amounts List el dret estr les defane crentes)
Account Titles and…
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Please finish November 15
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Prepare the appropriate journal entries for each transaction under a perpetual inventory system.
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Keiler Motorcycle Shop completed the following transactions during the month of
October. Keiler uses a perpetual inventory system. Any freight paid was paid with
cash.
Oct. 3 Purchased 20 bikes at a cost of $1,150 each from the Lyons Bike Company,
under credit terms 1/30, n/45. FOB shipping point.
4 The correct company paid $150 cash freight for above shipment
6 Sold 10 bikes to Doug's Bicycle for $1,500 each, terms 1/15, n/30. Terms FOB
destination.
Note: There are a total of 9 pages, including the cover page
Page 4 of 9
7 Received credit from the Lyons Bike Company for the return of 2 defective
bikes.
13 Issued a credit to Doug's Bicycle for the return of one bike from Oct 6 sale.
17 Purchased with cash Office Supplies from the Office Depot in the amount of
$200.
20 Doug's Bicycle paid their account in full
24 Paid Lyons Bike Company.
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Page 4 of 9
Keiler Motorcycle Shop completed the following transactions during the month of
October. Keiler uses a perpetual inventory system. Any freight paid was paid with
cash.
Oct. 3 Purchased 20 bikes at a cost of $1,150 each from the Lyons Bike Company,
under credit terms 1/30, n/45. FOB shipping point.
4 The correct company paid $150 cash freight for above shipment
6 Sold 10 bikes to Doug's Bicycle for $1,500 each, terms 1/15, n/30. Terms FOB
destination.
7 Received credit from the Lyons Bike Company for the return of 2 defective bikes.
13 Issued a credit to Doug's Bicycle for the return of one bike from Oct 6 sale.
17 Purchased with cash Office Supplies from the Office Depot in the amount of
$200.
20 Doug's Bicycle paid their account in full
24 Paid Lyons Bike Company.
Required:
Part A: Journalize the above transactions
Part B: Calculate the balance of inventory at October 31, assuming the opening
balance is $5,000
Part C: dentify one transaction that would be recorded…
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User Rancho Furniture completed the following transactions relating to the purchase of merchandise during August, the first month of operation. It is the policy of the company to record all purchase invoices at the net amount
and to pay invoices within the discount period. Aug.1 Purchased merchandise from Carolina Corporation, invoice price, $21,000; terms 2/10, n/30. Aug.8 Purchased merchandise from Thomas Company, $36,000; terms 2/10,
n/30. Aug. 8 Merchandise with an invoice price of $3,000 purchased from Carolina Corporation on August 1 was found to be defective. It was returned to the supplier accompanied by debit memorandum no. 118. Aug. 18
Paid Thomas Company's invoice of August 8, less cash discount. Aug. 25 Purchased merchandise from Shenren Company, $22, 800; terms 2/10, n/30. Aug. 30 Paid Carolina Corporation's invoice of August 1, taking into
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Hello,
Besides the first entry, I'm not sure how to record these transactions for a perpetual inventory system
thanks
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complete this question by entering your answers in the tabs below.
only typed solution
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Journalize the following entries for purchases, sales, and returns.
Friends Hardware store made the following transactions during the month of March:
DATE: MARCH
TRANSACTIONS
2
12,000 in inventory was purchased on credit with a 2/13 n/30 term and FOB shipping point.
4
Merchandise for $400 of the purchase made on March 2 was returned because it was defective.
6
Paid shipping for the inventory purchased on March 2.
11
Sold inventory on credit to a customer for $5,000 with a sales term of 2/10 n/30.
12
Paid the purchase due for the March 2 purchase.
15
An allowance was offered to the customer on the March 11 purchase.
20
The customer who made the purchase on March 11 paid in full with the appropriate discounts.
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What is the cost of goods sold? General accounting
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Ivanhoe Company sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Ivanhoe Company’s purchases of EZslide snowboards during September. During the same month, 95 EZslide snowboards were sold. Ivanhoe Company uses a periodic inventory system.
Date
Explanation
Units
Unit Cost
Total Cost
Sept. 1
Inventory
12
$106
$ 1,272
Sept. 12
Purchases
45
109
4,905
Sept. 19
Purchases
55
110
6,050
Sept. 26
Purchases
21
111
2,331
Totals
133
$14,558
(a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.)
FIFO
LIFO
AVERAGE-COST
The ending inventory at September 30
$Enter a dollar amount $Enter a dollar amount $Enter a dollar amount
(b) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g.…
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Prepare journal entries 1-7 please and thank you.
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de
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Blossom Company sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Blossom Company’s purchases of EZslide snowboards during September. During the same month, 104 EZslide snowboards were sold. Blossom Company uses a periodic inventory system.
Date
Explanation
Units
Unit Cost
Total Cost
Sept. 1
Inventory
13
$104
$ 1,352
Sept. 12
Purchases
46
107
4,922
Sept. 19
Purchases
50
108
5,400
Sept. 26
Purchases
20
109
2,180
Totals
129
$13,854
(a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.)
FIFO
LIFO
AVERAGE-COST
The ending inventory at September 30
$enter a dollar amount rounded to 0 decimal places
$enter a dollar amount rounded to 0 decimal places…
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Tamarisk's Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to
Tamarisk's purchases of Xpert snowboards during September is shown below. During the same month, 157 Xpert
snowboards were sold. Tamarisk's uses a periodic inventory system.
Date
Explanation Units
Unit Cost Total Cost
Sept. 1
Inventory
34
$101
$ 3,434
Sept. 12
Purchases
59
105
6,195
Sept. 19
Purchases
26
109
2,834
Sept. 26
Purchases
65
114
7,410
Totals
184
$19,873
x Your answer is incorrect. Try again.
Compute the ending inventory at September 30 and cost of goods sold using the FIFO and LIFO methods.
FIFO
LIFO
The ending inventory at September 30
8173
Cost of goods sold
12463
00
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Required information
Use the following information for the Quick Study below. (Algo) (11-14)
Skip to question
[The following information applies to the questions displayed below.]Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $23 each.
Purchases on December 7
10 units @ $9.00 cost
Purchases on December 14
20 units @ $15.00 cost
Purchases on December 21
15 units @ $17.00 cost
QS 5-12 (Algo) Perpetual: Inventory costing with LIFO LO P1
Determine the costs assigned to ending inventory when costs are assigned based on the LIFO method.
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Required information
Use the following information for the Quick Study below. (Algo) (11-14)
Skip to question
[The following information applies to the questions displayed below.]Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $27 each.
Purchases on December 7
10 units @ $13.00 cost
Purchases on December 14
20 units @ $19.00 cost
Purchases on December 21
15 units @ $21.00 cost
QS 5-14 (Algo) Perpetual: Inventory costing with specific identification LO P1
Of the units sold, eight are from the December 7 purchase and seven are from the December 14 purchase. Determine the costs assigned to ending inventory when costs are assigned based on specific identification.
arrow_forward
Required information
Use the following information for the Quick Study below. (Algo) (11-14)
Skip to question
[The following information applies to the questions displayed below.]Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $27 each.
Purchases on December 7
10 units @ $13.00 cost
Purchases on December 14
20 units @ $19.00 cost
Purchases on December 21
15 units @ $21.00 cost
QS 5-13 (Algo) Perpetual: Inventory costing with weighted average LO P1
Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. (Round your per unit costs to 2 decimal places.)
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On October 1, 8A Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each. During the
month of October, the following transactions occurred. Oct 4. Purchased 30 bicycles at a cost of $200 each
from 8B Bicycle Company, terms 2/10, n/30. Oct 6. Sold 18 bicycles to 8C Group for $300 each, terms
1/10, n/30. Oct 7. Returned 2 defective bicycles to 8B Bicycle Company for the Oct. 4 transaction. Oct 13.
Agreed to 8C's request for $300 allowance of the Oct. 6 transaction due to inferior Oct 14. Paid 8B Bicycle
Company in full, less discount. Oct 20. Received a payment from 8C for the balance of the Oct. 6
transaction. a. Journalize the April transactions using a perpetual inventory system. b. Journalize the April
transactions using a periodic inventory system.
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Kelley Company began business on January 1, 20-1. Purchases and sales during the month of January are shown.
Date
Purchases
Sales
Units
Cost/Unit
Units
Jan. 1
110
$1.00
Jan. 4
410
1.10
Jan. 5
320
Jan. 10
300
1.20
Jan. 12
200
Jan. 15
180
1.30
Jan. 18
510
1.50
Jan. 22
790
Jan. 27
90
Jan. 31
320
1.60
Required:
Calculate the total amount to be assigned to cost of goods sold for January and the ending inventory on January 31, under each of the following methods. In your calculations round the average unit cost to four decimal places and answers to the nearest cent.
Cost of Goods Sold
Inventory on Hand
1. Perpetual LIFO inventory method
$fill in the blank 1
$fill in the blank 2
2. Perpetual moving-average inventory method
$fill in the blank 3
$fill in the blank 4
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Margaret’s Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to Margaret’s purchases of Xpert snowboards during September is shown below. During the same month, 121 Xpert snowboards were sold. Margaret’s uses a periodic inventory system.
Date
Explanation
Units
Unit Cost
Total Cost
Sept. 1
Inventory
26
$95
$ 2,470
Sept. 12
Purchases
45
104
4,680
Sept. 19
Purchases
20
106
2,120
Sept. 26
Purchases
50
107
5,350
Totals
141
$14,620
(a)
Your answer has been saved. See score details after the due date.
Compute the ending inventory at September 30 and cost of goods sold using the FIFO and LIFO methods.
FIFO
LIFO
The ending inventory at September 30
$Enter a dollar amount
$Enter a dollar amount
Cost of goods sold
$Enter a dollar amount
$Enter a dollar amount
eTextbook and…
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Margaret’s Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to Margaret’s purchases of Xpert snowboards during September is shown below. During the same month, 121 Xpert snowboards were sold. Margaret’s uses a periodic inventory system.
Date
Explanation
Units
Unit Cost
Total Cost
Sept. 1
Inventory
26
$95
$ 2,470
Sept. 12
Purchases
45
104
4,680
Sept. 19
Purchases
20
106
2,120
Sept. 26
Purchases
50
107
5,350
Totals
141
$14,620
(a)
Compute the ending inventory at September 30 and cost of goods sold using the FIFO and LIFO methods.
FIFO
LIFO
The ending inventory at September 30
$Enter a dollar amount
$Enter a dollar amount
Cost of goods sold
$Enter a dollar amount
$Enter a dollar amount
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Current Attempt in Progress
REI sells snowboards. Assume the following information relates to REI's purchases of snowboards during September. During the same
month, 103 snowboards were sold.
Date
Sept. 1
Sept. 12
Sept. 19
Sept. 26
Date
Sept. 5
Sept. 16
Sept. 29
Explanation Units
Inventory
Purchases
(a1)
Purchases
Purchases
Totals
Sale
Sale
Sale
Totals
September 11 $
September 5
Units
$
9
49
45
14
Additional data regarding the company's sales of snowboards are provided below. Assume that REI uses a perpetual inventory system.
103
45
49
25
133
Unit Cost
*
$102
105
106
107
Total Cost
$1,428
4,725
5,194
2,675
Calculate the weighted-average unit cost. (Round answers to 3 decimal places, e.g. 5.125.)
$14,022
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Can you help me with #10 of part 1, and the other parts of the question? Thanks!
At the beginning of October, Bowser Company’s inventory consists of 56 units with a cost per unit of $44. The following transactions occur during the month of October.
October 4 Purchase 124 units of inventory on account from Waluigi Company for $50 per unit, terms 2/10, n/30.October 5 Pay cash for freight charges related to the October 4 purchase, $570.October 9 Return 10 defective units from the October 4 purchase and receipt of credit.October 12 Pay Waluigi Company in full.October 15 Sell 154 units of inventory to customers on account, $12,320. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $5 per unit for freight less $1 per unit for the purchase discount, or $54 per unit.)October 19 Receive full payment from customers related to the sale on October 15.October 20 Purchase 94 units of inventory from Waluigi Company for $64 per unit.October…
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Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Nov. 5 Purchased 600 units of product at a cost of $10 per unit. Terms of the sale are 2∕10, n∕60; the invoice is dated November 5. 7 Returned 25 defective units from the November 5 purchase and received full credit. 15 Paid the amount due from the November 5 purchase, minus the return on November 7.
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REI sells snowboards. Assume the following information relates to REI's purchases of snowboards during September. During the same
month, 109 snowboards were sold. REI uses a periodic inventory system.
Date
Explanation Units
Unit Cost
Total Cost
Sept. 1
Inventory
14
$102
$1,428
Sept. 12
Purchases
48
105
5,040
Sept. 19
Purchases
50
106
5,300
Sept. 26
Purchases
23
107
2,461
Totals
135
$14,229
(a)
Your answer is correct.
Compute the ending inventory at September 30 using FIFO, LIFO, and average-cost. (Round average cost per unit to 3 decimal
places, e.g. 125.153 and final answers to O decimal places, e.g. 125.)
(b)
Ending inventory at
September 30
$
eTextbook and Media
FIFO
2779
$
LIFO
2688
$
AVERAGE-COST
2740
Attempts: 2 of 3 used
Compute the cost of goods sold for the month using the FIFO, LIFO, and average-cost methods. (Round average cost per unit to 3
decimal places, e.g. 125.153 and final answers to O decimal places, e.g. 125.)
Cost of goods sold
$
FIFO
$
LIFO
AVERAGE-COST
$
arrow_forward
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- The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased Required A During the year, The Shirt Shop sold 810 T-shirts for $20 each. Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. 400 units 200 units 280 units 90 units Complete this question by entering your answers in the tabs below. Required B Ending inventory @ @ FIFO $8 = $3,200 $10 = 2,000 $13 = 3,640 $15 = 1,350 Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar…arrow_forwardCurrent Attempt in Progress Bramble Ltd. had beginning inventory of 54 units that cost $105 each. During September, the company purchased 206 units on account at $105 each, returned 6 units for credit, and sold on account 153 units at $201 each. Prepare journal entries for the September transactions, assuming that Bramble uses a periodic inventory system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit (To record purchase on account) (To record purchase return) Preparjalneries for the Sopomber tramming that perdicimentary titles are automatically indented whes the amount is entered De not indest manually. If ne entry is required, Entry for the account ctles and enter O for the amounts List el dret estr les defane crentes) Account Titles and…arrow_forwardPlease finish November 15arrow_forward
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- Journalize the following entries for purchases, sales, and returns. Friends Hardware store made the following transactions during the month of March: DATE: MARCH TRANSACTIONS 2 12,000 in inventory was purchased on credit with a 2/13 n/30 term and FOB shipping point. 4 Merchandise for $400 of the purchase made on March 2 was returned because it was defective. 6 Paid shipping for the inventory purchased on March 2. 11 Sold inventory on credit to a customer for $5,000 with a sales term of 2/10 n/30. 12 Paid the purchase due for the March 2 purchase. 15 An allowance was offered to the customer on the March 11 purchase. 20 The customer who made the purchase on March 11 paid in full with the appropriate discounts.arrow_forwardWhat is the cost of goods sold? General accountingarrow_forwardIvanhoe Company sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Ivanhoe Company’s purchases of EZslide snowboards during September. During the same month, 95 EZslide snowboards were sold. Ivanhoe Company uses a periodic inventory system. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 12 $106 $ 1,272 Sept. 12 Purchases 45 109 4,905 Sept. 19 Purchases 55 110 6,050 Sept. 26 Purchases 21 111 2,331 Totals 133 $14,558 (a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.) FIFO LIFO AVERAGE-COST The ending inventory at September 30 $Enter a dollar amount $Enter a dollar amount $Enter a dollar amount (b) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g.…arrow_forward
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