accounting 2301 homewor chapter 6

Assume Bargain.com began September with 8 units of inventory that cost a total of $ 136. During September​, Bargain.com purchased and sold goods as follows​: Sep. 8 Purchase 24 units​ @ $ 18 14 Sale 20 units​ @ $ 36 22 Purchase 16 units​ @ $ 20 27 Sale 24 units​ @ $ 36 Under the FIFO inventory costing method and the perpetual inventory​ system, how much is Bargain.com​'s cost of goods sold for the sale on September ​14?

$ 352 beginning inventory = 8 units purchase (sep.8) = 12 units beginning inventory = 8 units x 17 =136 purchase september 8th = 12 units x 18 = 216 cost of goods sold = 20 units $352

Assume Baxter Manufacturing begins March with 25 units of inventory that cost $20 each. During March, the following purchases and goods sold were: March 15 Purchased 10 units at $22 30 Sold 30 units Using the LIFO inventory costing method and the perpetual system, what is the ending Merchandise Inventory on March 30? $100 If Baxter Manufacturing is using LIFO, Cost of Goods Sold would be the (10 units $22) + (20 units $20) and Merchandise Inventory would have

$100 If Baxter Manufacturing is using LIFO, Cost of Goods Sold would be the (10 units $22) + (20 units $20) and Merchandise Inventory would have the remaining 5 units at $20 = $100.

Assume Baxter Manufacturing begins January with 11 units of inventory that cost $12 each. During January, the following purchases and goods sold were: Jan 5 Purchased 8 units at $14 7 Sold 12 units 15 Purchased 6 units at $16 30 Sold 15 units Using the LIFO inventory costing method and the perpetual system, how much is Costs of Goods Sold for the sale of January 7?

$160 Since the company is using LIFO, the 8 units purchased on January 5 at $14 each would be moved to Cost of Goods Sold first and you would need 4 more units (for the total sale of 12 units) from the beginning inventory of $12 per unit. As a result, Cost of Goods Sold for the sale on January 7 is (8 units $14) + (4 units $12) = $160.

Assume the following beginning inventory, purchases, and sales during the month of April: April 1 Beginning Merchandise Inventory, 10 units @ $15 each 3 7 units sold 10 Purchased 9 units at $16 23 4 units sold Determine the Cost of Goods Sold using the LIFO inventory costing method and the periodic inventory system on April 30.

$174 Take the last 9 units purchased at $16 , then take 2 units * $15 (the next level up for a total of 11 units): (9 $16) + (2 $15) = $174 Or it can be put into the following format: Beginning Merchandise Inventory (10 units x $15) $150 Net Cost of Purchases (9 units x $16) 144 Cost of Goods Available for Sale 294 Less: Ending Merchandise Inventory (8 units x $15)** (120) Cost of Goods Sold $174 **Use $15 as in LIFO the first units purchased at $15 would be the units remaining in merchandise inventory. You have 8 units in merchandise inventory (10 beginning inventory + 9 purchases - 7 sold - 4 sold = 8 units).

Assume Jones Manufacturing begins March with 20 units of inventory that cost $15 each. During March, the following purchases and goods sold were: March 15 Purchased 25 units at $18 30 Sold 30 units Using the FIFO inventory costing method and the perpetual system, what is the ending Merchandise Inventory on March 30?

$270 If Jones Manufacturing is using FIFO, Cost of Goods Sold would be the (20 units $15) + (10 units $18) and Merchandise Inventory would have the remaining 15 units at $18 = $270.

Bates Manufacturing purchased merchandise inventory for $10,000. At the end of the accounting period it has a market value of $8,700. Using the lower-of-cost-or-market rule, what is the amount to report on the Balance Sheet as Merchandise Inventory?

$8,700 Using the lower-of-cost-or-market, the lower of the cost or market value is reported on the Balance Sheet. The market value is lower at $8,700 so that is the amount to report on the Balance Sheet as Merchandise Inventory.

The Tampa Manufacturing Company had the following financial data for December 31, the end of the current year: Cost of Goods Sold $500,000 Beginning Merchandise Inventory 55,000 Ending Merchandise Inventory 45,000 What is the inventory turnover for the year?

10.00 times per year 500,000/50,000= in 37 days

Assume Jones Manufacturing begins January with 10 units of inventory that cost $10 each. During January, the following purchases and goods sold were: Jan 5 Purchased 8 units at $11 7 Sold 11 units What is the weighted average cost per unit in the perpetual system at the time the 11 units are sold on January 7?

10.44 The weighted average cost per unit at the time of the January 7 sale would be $10.44 per unit, calculated as [(10 units $10) + (8 units $11)] / 18 total units = $10.44.

Assume Jones Manufacturing begins January with 10 units of inventory that cost $10 each. During January, the following purchases and goods sold were: Jan 5 Purchased 8 units at $11 7 Sold 11 units 15 Purchased 6 units at $12 30 Sold 15 units Using the FIFO inventory costing method and the perpetual system, how much is Costs of Goods Sold for the sale of January 7?

111 Since the company is using FIFO, the 10 units in beginning inventory at $10 each would be moved to Cost of Goods Sold first and you would need 1 more unit (for the total sale of 11 units) from the next purchase of $11 per unit. As a result, Cost of Goods Sold for the sale on January 7 is (10 units $10) + (1 unit $11) = $111.

The Smith Manufacturing Company had inventory turnover of 9 for the current year. What is the days' sales in inventory for the current year?

365/9= 40.56 days

Which principle or concept states that businesses should use the same accounting methods and procedures from period to​ period?

Consistency

Data for Shelby Company for the current year is as follows: Sales Revenue $10,000 Cost of Goods Sold: Beginning Merchandise Inventory $3,000 Net Cost of Purchases 7,000 Cost of Goods Available for Sale 10,000 Less: Ending Merchandise Inventory 2,000 Cost of Goods Sold 8,000 Gross Profit $2,000 Assume that the ending Merchandise Inventory was accidently overstated by $500. What are the correct amounts for Cost of Goods Sold and Gross Profit?

Cost of Goods Sold = $8,500 Gross Profit = $1,500 If Merchandise Inventory is overstated, then Cost of Goods Sold is understated by $500 (need to add another $500 to Cost of Goods Sold). This makes Net Income overstated by $500 or needs to be $500 less at $1,500. After ending Merchandise Inventory is corrected, data for Shelby Company for the current year is as follows: Sales Revenueb$10,000 Cost of Goods Sold: Beginning Merchandise Inventory $3,000 Net Cost of Purchases 7,000 Cost of Goods Available for Sale 10,000 Less: Ending Merchandise Inventory 1,500 Cost of Goods Sold 8,500 Gross Profit$ 1,500

Which principle holds that a business's financial statements must report enough information for outsiders to make a knowledgeable decision about the company?

Disclosure Principle

Which of the following costing method results in the highest net income during a period of increasing inventory costs?

FIFO

Which inventory costing method assigns to ending merchandise inventory the newestlong dashthe most recentlong dashcosts incurred during the​ period?

First-in, first-out​ (FIFO)

Assume Baxter Manufacturing begins March with 25 units of inventory that cost $20 each. During March, the following purchases and goods sold were: March 15 Purchased 10 units at $22 30 Sold 30 units Using the FIFO inventory costing method and the perpetual system, what is the ending Merchandise Inventory on March 30?

If Baxter Manufacturing is using FIFO, Cost of Goods Sold would be the (25 units * $20) + (5 units * $22) and Merchandise Inventory would have the remaining 5 units at $22 = $110.

The following statement is true regarding inventory errors (overstating or understating ending Merchandise Inventory):

Inventory errors will cancel out after two periods.

When inventory costs are rising, a company may prefer to use the __________ method in the perpetual system in order to pay the lowest amount of taxes.

LIFO LIFO results in a higher Cost of Goods Sold, and then a lower net income, resulting in less taxes being paid.

Which inventory costing method results in the lowest net income during a period of rising inventory​ costs?

Last-in, first-out​ (LIFO)

On December 31 of the current year, Aztec Company understated ending Merchandise Inventory by $10,000. How does this error affect the Cost of Goods Sold and the Net Income for the current year?

Overstates Cost of Goods Sold and understates Net Income.

Assume Jones Manufacturing begins January with 10 units of inventory that cost $10 each. During January, the following purchases and goods sold were: Jan 5 Purchased 8 units at $11 7 Sold 11 units 15 Purchased 6 units at $12 30 Sold 15 units Using the FIFO inventory costing method and the perpetual system, how much is Costs of Goods Sold for the sale of January 7?

Since the company is using FIFO, the 10 units in beginning inventory at $10 each would be moved to Cost of Goods Sold first and you would need 1 more unit (for the total sale of 11 units) from the next purchase of $11 per unit. As a result, Cost of Goods Sold for the sale on January 7 is (10 units * $10) + (1 unit * $11) = $111.

Assume Baxter Manufacturing begins January with 11 units of inventory that cost $12 each. During January, the following purchases and goods sold were: Jan 5 Purchased 8 units at $14 7 Sold 12 units 15 Purchased 6 units at $16 30 Sold 15 units Using the FIFO inventory costing method and the perpetual system, how much is Costs of Goods Sold for the sale of January 7?

Since the company is using FIFO, the 11 units in beginning inventory at $12 each would be moved to Cost of Goods Sold first and you would need 1 more unit (for the total sale of 12 units) from the next purchase of $14 per unit. As a result, Cost of Goods Sold for the sale on January 7 is (11 units * $12) + (1 unit * $14) = $146.

Ace Manufacturing purchased merchandise inventory for $8,000. At the end of the accounting period it has a market value of $7,800. Using the lower-of-cost-or-market rule, what is the journal entry to record the adjustment?

accounts cost of goods sold debit 200 merchandise inventory credit 200

Inventory turnover measures

how rapidly merchandise inventory is sold