CC7-1 (Algo) Accounting for Changing Inventory Costs [LO 7-3, LO 7-5] In October, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual inventory system. On December 31 of last year, NGS had 25 units at a total cost of $5.80 per unit. Nicole purchased 30 more units at $7.80 in February. In March, Nicole purchased 15 units at $9.80 per unit. In May, 60 units were purchased at $9.60 per unit. In June, NGS sold 60 units at a selling price of $11.80 per unit and 55 units at $11.20 per unit. CC7-1 (Algo) Part 2 2. Compute the Cost of Goods Available for Sale, Cost of Goods Sold, and Cost of Ending Inventory using the first-in, first-out (FIFO) method. (Round "Cost per Unit" to 2 decimal places.)

CC7-1 (Algo) Accounting for Changing Inventory Costs [LO 7-3, LO 7-5] In October, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual inventory system. On December 31 of last year, NGS had 25 units at a total cost of $5.80 per unit. Nicole purchased 30 more units at $7.80 in February. In March, Nicole purchased 15 units at $9.80 per unit. In May, 60 units were purchased at $9.60 per unit. In June, NGS sold 60 units at a selling price of $11.80 per unit and 55 units at $11.20 per unit. CC7-1 (Algo) Part 2 2. Compute the Cost of Goods Available for Sale, Cost of Goods Sold, and Cost of Ending Inventory using the first-in, first-out (FIFO) method. (Round "Cost per Unit" to 2 decimal places.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 57E: Lower of Cost or Market Shaw Systems sells a limited line of specially made products, using...

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Lower of Cost or Market Shaw Systems sells a limited line of specially made products, using television advertising campaigns in large cities. At year end, Shaw has the following data for its inventory: Required: 1. Compute the carrying value of the ending inventory using the lower of cost or market rule applied on an item-by-item basis. 2. Prepare the journal entry required to value the inventory at lower of cost or market. 3. CONCEPTUAL CONNECTION What is the impact of applying the lower of cost or market rule on the financial statements of the current period? What is the impact on the financial statements of a subsequent period in which the inventory is sold?
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