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Problem One DATA:

Beginning Inventory 1st Purchase 2nd Purchase 3rd Purchase UNITS AVAILABLE Ending Inventory Units Sold

$0 $60 $70 $100

= = = =

$0 $7,500 $19,250 $50,000 76,750

125 @ 275 @ 500 @ 900 225 675

1. Specific Identification SOLD-> 100 from 1st purchase, SOLD-> 200 from 2nd. SOLD 375 from the 3rd purchase A. What is the value of Cost of Goods Sold Under Specific Identification:

1st Purchase 2nd Purchase 3rd Purchase Units Sold

100 x 200 x 375 x 675

$60 = $70 = $100

6,000 14,000 37,500 57,500

B. What is the value of Ending Inventory under Specific Identification:

1st Purchase 2nd Purchase 3rd Purchase Ending Inventory 2. FIFO

25 @ 75 @ 125 @ 225

$60 = $70 = $100 =

1,500 5,250 12,500 19,250

A. What is the value of Cost of Goods Sold Under FIFO: 1st Purchase 2nd Purchase 3rd Purchase 100 25 175 100 275 @ @ @ @ @ $60 $60 $70 $70 $100 = = = = = 6,000 1,500 12,250 7,000 27,500

Cost of Goods Sold B. What is the value of Ending Inventory under FIFO: 1st Purchase 2nd Purchase 3rd Purchase Ending Inventory 3. LIFO A. What is the value of Cost of Goods Sold Under LIFO: 1st Purchase 2nd Purchase 3rd Purchase Cost of Goods Sold 100 @ 200 @ 200@ 375 175@ 675 $100 = $100 = $100 = $70 = 225 @ $100 =

54,250

22,500 $22,500

10,000 20,000 20,000 12,250 62,250

B. What is the value of Ending Inventory under LIFO: 1st Purchase 2nd Purchase 3rd Purchase Ending Inventory 225 14,500 125 @ 100 @ $60 = $70 = 7,500 7,000

4. Weighted Average A. What is the value of Cost of Goods Sold Under Weighted Average: 675 @ 85.28 = $57,564

B. What is the value of Ending Inventory under Weighted Average: 225 Problem TWO DATA: @ 85.28 = $19,188

Beginning Inventory 1st Purchase

0 20

@ @

$0 $7

= =

$0 $140

2nd Purchase 3 Purchase UNITS AVAILABLE Ending Inventory Units Sold


rd

30 40 90 50 40

@ @

$8 $11

= =

$240 $440 820

5. Specific Identification SOLD-> 20 from 1st purchase, SOLD-> 10 from 2nd. SOLD 10 from the 3rd purchase A. What is the value of Cost of Goods Sold Under Specific Identification:

1st Purchase 2nd Purchase 3rd Purchase Units Sold

20 x 10 x 10 x 40

$7 = $8 = $11 =

$140 $80 $110 $330

B. What is the value of Ending Inventory under Specific Identification:

1st Purchase 2nd Purchase 3rd Purchase Ending Inventory 6. FIFO A. What is the value of Cost of Goods Sold Under FIFO: 1st Purchase 2nd Purchase 3rd Purchase Cost of Goods 20 x 10 x 10 x 40 $7 = $8 = $8 = $140 $80 $80 $300 20 x 30 x 50 $8 = $11 = $160 $330 $490

B. What is the value of Ending Inventory under FIFO: 1st Purchase 2nd Purchase 3rd Purchase 10 x 40 x $8 = $11 = $80 $440

Ending Inventory 7. LIFO

50

$520

A. What is the value of Cost of Goods Sold Under LIFO: 1st Purchase 2nd Purchase 3rd Purchase Cost of Goods 20 x 10 x 10 x 40 $11 = $11 = $11 = $220 $110 $110 $440

B. What is the value of Ending Inventory under LIFO: 1st Purchase 2nd Purchase 3rd Purchase Ending Inventory 50 $380 20 x 30 x $7 = $8 = $140 $240

8. Weighted Average A. What is the value of Cost of Goods Sold Under Weighted Average: 40 @ $9.12 = $364.80

B. What is the value of Ending Inventory under Weighted Average: 50 @ $9.12 = $456.00

9 Lower of Cost or Market: June 2, 2010 purchased 500 widgets for $10 each. December 31, 2010 the widgets cost $7.00 each Insert the correct amounts in the entry below assume all 500 are sold: DEBIT COST OF SALES (cost $5,000-market $3,500) INVENTORY To write inventory down to market value 10 Estimate Ending inventory Beginning inventory is $10,000 Purchases total $5,000 Sales are $20,000 assume a 40% gross profit What is ending inventory: 1,500 1,500 CREDIT

$3,000 equals ending inventory

plus

$10,000 $5,000 $15,000 $20,000 $8,000 $12,000 $15,000 $12,000 $3,000

cost of goods available

$20,000 x 40% = $8,000 or gross profit minus

cost of goods sold

minus

ending inventory

85.27777778 $ 57,577.50 38864812.5

19,187.50