FUNDAMENTAL ACCT PRIN CONNECT ACCESS
FUNDAMENTAL ACCT PRIN CONNECT ACCESS
24th Edition
ISBN: 9781266494604
Author: Wild
Publisher: MCG
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Chapter 6, Problem 2APSA
To determine

The Number of Ending Inventory Units.

Expert Solution
Check Mark

Explanation of Solution

The ending Inventory units is a difference between units of goods available for sale and units sold and has been computed as under:

    Ending Inventory Units:


    UNITS
    Units available for sale
    820
    Less: Units sold

    Mar-9 Sales
    420
    Mar-29 Sales
    160
    Ending Inventory Units:
    240

Requirement 3-a:

First in First Out:

The first in first out method of assigning the cost to goods sold is based on the principle that the goods that are entered first in the store room shall be issued first for sale and hence the cost shall be recorded at its initial prices of goods entered in store room. The periodic Inventory system means the records are maintained only at the end of period.

To determine

The Cost assigned to ending Inventory under FIFO.

Expert Solution
Check Mark

Explanation of Solution

The FIFO method of period inventory suggests that the goods issued for sale on a particular date shall be assigned cost on the basis of cost of oldest material lies in the store during the end of period.

The Ending Inventory shall be computed as under:

    STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD

    RECIEPTS
    COST OF GOODS SOLD
    BALANCE
    DATE
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    Balance Oct1
    100
    50
    5000
    100
    50
    5000



    Purchase









    5-Mar
    400
    55
    22000
    400
    55
    22000



    18-Mar
    120
    60
    7200
    80
    60
    4800
    40
    60
    2400
    25-Mar
    200
    62
    12400



    200
    62
    12400
    TOTAL
    820

    46600
    580

    31800
    240

    14800

Therefore, Ending Inventory is 240 units of $14800.

Requirement 3-b:

Last in First Out:

The Last in first out method of assigning the cost to goods sold is based on the principle that the goods that are entered recently in the store room shall be issued first for sale and hence the cost shall be recorded at its recent prices of goods entered in store room. The periodic Inventory system means the records are maintained at the end of period.

To determine

The Cost assigned to ending Inventory under LIFO.

Expert Solution
Check Mark

Explanation of Solution

The LIFO method of periodic inventory suggests that the goods issued for sale on a particular date shall be assigned cost on the basis of cost of newest material lies in the store at the end of period.

The Ending Inventory shall be computed as under:

    STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD

    RECIEPTS
    COST OF GOODS SOLD
    BALANCE
    DATE
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    Balance Oct1
    100
    50
    5000



    100
    50
    5000
    Purchase









    5-Mar
    400
    55
    22000
    260
    55
    14300
    140
    55
    7700
    18-Mar
    120
    60
    7200
    120
    60
    7200



    25-Mar
    200
    62
    12400
    200
    62
    12400



    TOTAL
    820

    46600
    580

    33900
    240

    12700

Therefore, Ending Inventory is 240 units of $12700.

Requirement 3-c:

Weighted Average:

The Weighted Average method of issuing inventory is based on principle that the goods shall be issued at an average of prices of goods which are lying in the store room at the end of period. The periodic Inventory system means the records are maintained at the end of period.

To determine

The Cost assigned to ending Inventory under Weighted average.

Expert Solution
Check Mark

Explanation of Solution

The Weighted Average method of periodic inventory suggests that the goods issued for sale on a particular date shall be assigned cost on the basis of average cost of material lies in the store during the period.

The Ending Inventory shall be computed as under:

    STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD

    RECIEPTS
    COST OF GOODS SOLD
    BALANCE
    DATE
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    Balance Oct1
    100
    50
    5000






    Purchase









    5-Mar
    400
    55
    22000






    18-Mar
    120
    60
    7200






    25-Mar
    200
    62
    12400






    TOTAL
    820
    56.83
    46600
    580
    56.83
    32961
    240
    56.83
    13639

Therefore, Ending Inventory is 240 units of $13639.

Requirement 3-d:

Specific Identification:

Specific Identification method of assigning the cost to goods sold is based on the principle that the goods that have been issued for sale has been specifically identified to be issued from the particular lot of material. Therefore, the cost of that particular lot shall be assigned on the same. The periodic Inventory system means the records are maintained at the end of period.

To determine

The Cost assigned to ending Inventory under Specific Identification.

Expert Solution
Check Mark

Explanation of Solution

The Specific Identification method of periodic inventory suggests that the goods issued for sale on a particular date shall be assigned cost on the basis of cost of material specifically identified as issued from the store at the end of period.

The Ending Inventory shall be computed as under:

    STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC SPECIFIC IDENTIFICATION METHOD

    RECIEPTS
    COST OF GOODS SOLD
    BALANCE
    DATE
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    UNITS
    RATE
    AMOUNT $
    Balance Oct1
    100
    50
    5000
    80
    50
    4000
    20
    50
    1000
    Purchase









    5-Mar
    400
    55
    22000
    340
    55
    18700
    60
    55
    3300
    18-Mar
    120
    60
    7200
    40
    60
    2400
    80
    60
    4800
    25-Mar
    200
    62
    12400
    120
    62
    7440
    80
    62
    4960
    TOTAL
    820

    46600
    580

    32540
    2400

    14060

Therefore, Ending Inventory is 240 units of $14060.

Requirement 4:

Gross Profits:

Gross Profits means excess of sales revenue over the cost of goods sold.

To determine

Gross profits earned by the company under various methods.

Expert Solution
Check Mark

Explanation of Solution

The Gross profits is computed as a difference between the sales revenue and cost of goods sold as assigned under various methods and has been computed as under:

FUNDAMENTAL ACCT PRIN CONNECT ACCESS, Chapter 6, Problem 2APSA

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Chapter 6 Solutions

FUNDAMENTAL ACCT PRIN CONNECT ACCESS

Ch. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Inventory ownership Homestead Crafts, a...Ch. 6 - QS 6-2 Inventory costs C2 A car dealer acquires a...Ch. 6 - Prob. 3QSCh. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Inventory costing with LIFO Refer to...Ch. 6 - Perpetual Inventory costing with weighted average...Ch. 6 - Periodic: Inventory costing with FIFO P3 Refer to...Ch. 6 - Periodic: Inventory costing with LIFO Refer to the...Ch. 6 - Periodic: Inventory costing with weighted average...Ch. 6 - Perpetual: Assigning costs with FIFO Trey Monson...Ch. 6 - QS6-11 Perpetual Inventory costing with LIFO Refer...Ch. 6 - QS 6-12 Perpetual: Inventory costing with weighted...Ch. 6 - QS6.13 Perpetual Inventory costing with specific...Ch. 6 - Periodic: Inventory costing with FIFO P3 Refer to...Ch. 6 - Periodic Inventory costing with LIFO P3 Refer to...Ch. 6 - Periodic: Inventory costing with weighted average...Ch. 6 - Periodic: Inventory costing with specific...Ch. 6 - QS 6-18 Contrasting inventory costing methods...Ch. 6 - Prob. 19QSCh. 6 - Inventory errors A2 In taking a physical inventory...Ch. 6 - Analyzing inventory A3 Endor Company begins the...Ch. 6 - Prob. 22QSCh. 6 - Inventory costs C2 A solar panel dealer acquires a...Ch. 6 - Exercise 6-1 Inventory ownership C1 1. At...Ch. 6 - Exercise 6-2 Inventory costs C2 Walberg...Ch. 6 - Exercise 6-3 Perpetual Inventory costing methods...Ch. 6 - Exercise 6-4 Perpetual: Income effects of...Ch. 6 - Exercise 6-5A Periodic: Inventory costing P3 Refer...Ch. 6 - Exercise 6-6A Periodic: Income effects of...Ch. 6 - Exercise 6-7 Perpetual Inventory costing...Ch. 6 - Exercise 6.8 Specific identification Refer to the...Ch. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Exercise 6-13 Inventory turnover and days' sales...Ch. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Exercise 6-1E Perpetual inventory costing P1 Tree...Ch. 6 - Exercise 6-19APeriodic inventory costing P3 I...Ch. 6 - Problem 6-1A Perpetual: Alternative cost...Ch. 6 - Prob. 2APSACh. 6 - Prob. 3APSACh. 6 - Prob. 4APSACh. 6 - Problem 6-5A Lower of cost or market P2 A physical...Ch. 6 - Prob. 6APSACh. 6 - Prob. 7APSACh. 6 - Prob. 8APSACh. 6 - Prob. 9APSACh. 6 - Prob. 10APSACh. 6 - Prob. 1BPSBCh. 6 - Prob. 2BPSBCh. 6 - Prob. 3BPSBCh. 6 - Prob. 4BPSBCh. 6 - Prob. 5BPSBCh. 6 - Prob. 6BPSBCh. 6 - Prob. 7BPSBCh. 6 - Prob. 8BPSBCh. 6 - Prob. 9BPSBCh. 6 - Prob. 10BPSBCh. 6 - Prob. 6SPCh. 6 - AA 6-1 Use Apple's financial statements in...Ch. 6 - AA 6-2 Comparative figures for Apple and Google...Ch. 6 - Prob. 3AACh. 6 - BTN 6-3 Golf Challenge Corp. is a retail sports...Ch. 6 - Prob. 2BTNCh. 6 - Prob. 3BTNCh. 6 - Prob. 4BTNCh. 6 - Prob. 5BTNCh. 6 - Prob. 6BTN
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