The value of cost of goods sold and cost of ending inventory using average cost method.

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Answer 1

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Chapter 6, Problem 6.19AE

1.

To determine

To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

2.

To determine

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

3.

To determine

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

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(Learning Objectives 4, 5: Compute gross profit; estimate inventory using the grossprofit method) Cleveland Company, a camera store, lost some inventory in a fire on October15. To file an insurance claim, the company must estimate its October 15 inventory using thegross profit method. For the past two years, Cleveland Company’s gross profit has averaged41% of net sales. Its inventory records reveal the following data:Inventory, October 1................ $ 57,700Transactions October 1–15:Purchases ................................. 490,800Purchase discounts................... 17,000Purchase returns....................... 70,900Sales......................................... 660,000Requirements1. Estimate the cost of the lost inventory using the gross profit method.2. Prepare the income statement for October 1 to October 15 for this product through grossprofit. Show the detailed computations of cost of goods sold in a separate schedule.

(Learning Objective 2: Compare inventory by three methods) Navy Surplus beganJuly 2018 with 80 stoves that cost $10 each. During the month, the company made the following purchases at cost:1826July 6 90 stoves @ $20100 stoves @ $2530 stoves @ $30= $1,800= 2,500= 900The company sold 250 stoves, and at July 31, the ending inventory consisted of 50 stoves. Thesales price of each stove was $52.Requirements1. Determine the cost of goods sold and ending inventory amounts for July under the averagecost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimalplaces, and round all other amounts to the nearest dollar.2. Explain why cost of goods sold is highest under LIFO. Be specific.3. Prepare the Navy Surplus income statement for July. Report gross profit. Operating expensestotaled $3,250. The company uses average costing for inventory. The income tax rate is 40%.

(Learning Objective 2: Apply various inventory costing methods) A Gold MedalSports outlet store began August 2018 with 42 pairs of running shoes that cost the store $31each. The sales price of these shoes was $63. During August, the store completed these inventory transactions:Units Unit CostSale ............. 16 $319 Purchase...... 81 33$6313 Sale ............. 26 31 63Sale ............. 33 6422 Sale ............. 36 33 6429 Purchase...... 18 35Aug 218 13Unit Sales PriceRequirements1. The preceding data are taken from the store’s perpetual inventory records. Which costmethod does the store use? Explain how you arrived at your answer.2. Determine the store’s cost of goods sold for August. Also compute gross profit for August.3. What is the cost of the store’s August 31 inventory of running shoes?

Answer 2

Question

Chapter 6, Problem 6.19AE

1.

To determine

To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

2.

To determine

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

3.

To determine

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

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Answer 3

Question

Chapter 6, Problem 6.19AE

1.

To determine

To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

2.

To determine

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

3.

To determine

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 6.19AE

1.

To determine

To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

2.

To determine

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

3.

To determine

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.19AE

1.

To determine

To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

2.

To determine

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

3.

To determine

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

Answer 6

Chapter 6, Problem 6.19AE

1.

To determine

To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

Answer 7

Chapter 6, Problem 6.19AE

1.

To determine

To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

Answer 8

2.

To determine

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

Answer 9

2.

To determine

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

Answer 10

3.

To determine

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

Answer 11

3.

To determine

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 6 - Ravenna Candles recently purchased candleholders...Ch. 6 - Which inventory system maintains a running record...Ch. 6 - How is cost of goods sold classified in the...Ch. 6 - Snyders total cost of goods available for sale...Ch. 6 - Snyders cost of goods sold using the average-cost...Ch. 6 - Snyders ending inventory using the FIFO method...Ch. 6 - Snyders cost of goods sold using the LIFO method...Ch. 6 - Which U.S. GAAP principle or rule would apply if...Ch. 6 - Corrigan Corporation had beginning inventory of...Ch. 6 - Corrigans gross profit for the period is a.79,000....

The value of cost of goods sold and cost of ending inventory using average cost method.

Solution Summary: The author explains the cost flow assumption method that distributes the total cost of goods available for sale among all the available units.

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To Compute: The value of cost of goods sold and cost of ending inventory using average cost method.

To Compute: The value of cost of goods sold and ending inventory using FIFO method.

To Compute: The value of cost of goods sold and ending inventory using LIFO method.

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