Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 5, Problem 5.32P
Problem 5.32
LO 7, 8
Cost flow assumptions-FIFO, LIFO, and weighted average using a periodic system The following data are available for Sellco for the fiscal year ended on January 31, 2017:
| Sales | 3,200 units |
| Beginning inventory | 1,000 units @ $8 |
| Purchases, in chronological order | 1,200 units @ $10 |
1,600 units @ $12
800 units @ $16
Required:
a. Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system):
- FIFO.
- LIFO.
- Weighted average. Round the unit cost answer to two decimal places and ending inventory to the nearest $10.
b. Assume that net income using the weighted-average cost flow assumption is $232,000. Calculate net income under FIFO and LIFO.
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Cost Flow Methods
The following three identical units of Item JC07 are purchased during April:
April 2
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April 20
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Average cost per unit
Item Beta
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183
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184
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Assume that A method of inventory costing in which the cost of the units sold and in ending Inventory is a weighted average of the purchase costs.
(b) last-in, first-out (LIFO); and (c) weighted average cost method.
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Problem 11-6 (IAA)
Total cost
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40.
400,000
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31 Sale
1 Purchase
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December 31 Sale
10,000
5,000
15,000
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25,000
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750,000
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Required Information
Problem 6-1A Perpetual: Alternative cost flows LO P1
[The following information applies to the questions displayed below]
Warnerwoods Company uses a perpetual Inventory system. It entered into the following purchases and sales transactions
for March.
Date
Activities
Mar. 1 Beginning inventory
Mar. 5 Purchase
Mar
9 Sales
Mar. 18 Purchase
Mar. 25 Purchase
Mar. 29 Sales
Totals
Problem 6-1A Part 4
Gross Margin
Sales
Less: Cost of goods sold
Gross profit
Units Acquired at Cost
200 units@ $53.00 per unit
275 units@ $58.00 per unit
FIFO
135 units@ $63.00 per unit
250 units@ $65.00 per unit
860 units
4. Compute gross profit earned by the company for each of the four costing methods. For specific Identification, the March 9 sale
consisted of 115 units from beginning Inventory and 245 units from the March 5 purchase: the March 29 sale consisted of 95 units from
the March 18 purchase and 135 units from the March 25 purchase. (Round weighted average cost per unit to two…
Chapter 5 Solutions
Accounting: What the Numbers Mean
Ch. 5 - Prob. 5.1MECh. 5 - Prob. 5.2MECh. 5 - Mini-Exercise 5.3 LO 5 Accounts receivable, bad...Ch. 5 - Mini-Exercise 5.4 LO 5 Bad debts...Ch. 5 - Mini-Exercise 5.5 LO 7, 8 Cost flow...Ch. 5 - Mini-Exercise 5.6 LO 7, 8 Cost flow...Ch. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10E
Ch. 5 - Exercise 5.11 LO 5 Bad debts analysis-Allowance,...Ch. 5 - Exercise 5.12 LO 5 Bad debts analysis-Allowance...Ch. 5 - Exercise 5.13 LO 5 Cash discounts-ROI Annual...Ch. 5 - Prob. 5.14ECh. 5 - Exercise 5.15 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.16 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.17 LO 7, 8 LIFO versus FIFO-matching...Ch. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Prob. 5.20ECh. 5 - Exercise 5.21 LO 5, 6, 8 Transaction...Ch. 5 - Exercise 5.22 LO 5. 8, 10 Transaction...Ch. 5 - Exercise 5.23 LO 5, 6, 7 Transaction...Ch. 5 - Exercise 5.24 LO 7, 8, 10 Transaction...Ch. 5 - Prob. 5.25PCh. 5 - Prob. 5.26PCh. 5 - Problem 5.27 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.28 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.29 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.30 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.31 LO 7, 8 Cost flow assumptions-FIFO...Ch. 5 - Problem 5.32 LO 7, 8 Cost flow assumptions-FIFO,...Ch. 5 - Prob. 5.33PCh. 5 - Prob. 5.34PCh. 5 - Problem 5.35 LO 7 Effects of inventory errors If...Ch. 5 - Prob. 5.36PCh. 5 - Case 5.37 LO 5, 7, 8 Focus company-accounts...Ch. 5 - Case 5.38
LO 5, 7
Comparative analysis of current...
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