7:25SW YO□Learning Objectives 2, 32. Ending Merch. Inv. $73Dec. 1 Beginning merchandise inventoryAssume that Toys Galore store bought and sold a line of dolls during Decemberas follows:8 Sale14 Purchase21 SaleQAAC363/ 148013 units @ $9 each8 units @ $ 22 each16 units @ $ 14 each5G 71%14 units @ $22 eachRequirements1. Compute the cost of goods sold, cost of ending merchandise inventory,and gross profit using the FIFO inventory costing method.2. Compute the cost of goods sold, cost of ending merchandise inventory,and gross profit using the LIFO inventory costing method.3. Which method results in a higher cost of goods sold?4. Which method results in a higher cost of ending merchandise inventory?5. Which method results in a higher gross profit?GO ||| 0 <

The value of the ending inventory is affected by the inventory valuation method. According to FIFO,…

Answered: Assume that Toys Galore store bought…

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

Section: Chapter Questions

Problem 6.2BE: Perpetual inventory using FIFO Beginning inventory, purchases, and sales for Item Zeta9 are as...

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Weighted average cost method with perpetual inventory The beginning inventory for Funky Party Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A. Instructions 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 6, using the weighted average cost method. 2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period. 3. Determine the ending inventory cost as of March 31, 2016.
Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of December 31 follows: Description Inventory Quantity Market Value per Unit (Net Realizable Value) A54 37 56 C77 24 178 F66 30 132 H83 21 545 K12 375 5 Q58 90 18 S36 8 235 V97 140 20 Y88 17 744 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Description Last Purchases Invoice Next-to-the-Last Purchases Invoice Quantity Purchased Unit Cost Quantity Purchased Unit Cost A54 30 60 40 58 C77 25 174 15 180 F66 20 130 15 128 H83 6 547 15 540 K12 500 6 500 7 Q58 75 25 80 26 S36 5 256 4 260 V97 100 17 115 16 Y88 10 750 8 740 Instructions Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: 1. Draw a line through the quantity, and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed as an example. Inventory Sheet December 31 Description Unit Inventory Quantity Cost per Unit Market Value per Unit(Net Realizable Value) Total Cost Market LCM A54 37 30 60 56 1,800 1,680 7 58 56 406 392 2,206 2,072 2,072

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Assume that Toys Galore store bought and sold a line of dolls during December as follows: Dec. 1 Beginning merchandise inventory 8 Sale 14 Purchase 21 Sale 13 units @ $9 each 8 units @ $22 each 16 units @ $ 14 each 14 units @ $ 22 each