Cost of Merchandise Sold and Related ItemsThe following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2019:Increase in estimated returns inventory$ 10,900Merchandise inventory, May 1, 2018435,600Merchandise inventory, April 30, 2019544,500Purchases3,539,000Purchases returns and allowances108,900Purchases discounts65,300Sales5,444,600Freight in16,300a. Prepare the cost of merchandise sold section of the income statement for the year ended April 30, 2019, using the periodic inventory system. Harkins CompanyIncome StatementFor the Year Ended April 30, 2019Cost of merchandise sold:Merchandise inventory, May 1, 2018 yCost of merchandise purchased:PurchasesLess: Purchases returns and allowances vLess: Purchases discounts vNet purchasesAdd freight in /Total cost of merchandise purchasedMerchandise available for sale vLess merchandise inventory, April 30, 2019Cost of merchandise sold before estimated returns vIncrease in estimated returns inventory vCost of merchandise sold

Cost of goods sold is determined by adding the opening inventory to the net purchases made during…

Answered: Cost of Merchandise Sold and Related…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question Content Area Based on the following data for the current year, what is the inventory turnover (rounded to one decimal place)? Sales on account during year $586,967 Cost of merchandise sold during year 176,594 Accounts receivable, beginning of year 46,824 Accounts receivable, end of year 52,382 Merchandise inventory, beginning of year 31,526 Merchandise inventory, end of year 40,442 a.21.2 b.4.9 c.16.3 d.3.9
Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows: Inventory Purchases May 10 May 1 2,900 units at $37 1,450 units at $39 1,305 units at $41 Sales May 12 14 2,030 units 1,740 units 20 31 870 units a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Schedule of Cost of Merchandise Sold LIFO Method Prepaid Cell Phones Cost of Merchandise Sold Purchases Purchases Quantity Quantity Unit Cost Inventory Inventory Inventory Quantity Unit Cost Total Cost Unit Cost Total Cost Sold Date Purchased May 1 BE May 10 May 12 May…
FIFO and LIFO costs under perpetual inventory system The following units of an item were available for sale during the year: DATA Beginning inventory Sale First purchase Sale Second purchase Sale Ending inventory Quantity 8,100 5,000 15,400 12,600 15,900 13,100 8,700 REQUIRED: a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of the ending inventory according to LIFO? a. FIFO method b. LIFO method Price Inventory Cost Using formulas and cell references from the problem data, perform the required analysis. Formulas entered in the green cells orange cells. Transfer amounts to CNOWv2 for grading. $160 $300 $167 Formulas $300 $172 $300
Requirements: Complete the Ending Inventory and Cost of Goods Sold schedules for each inventory costing method; FIFO, LIFO, WAVG. Complete the Income Statement and Cash Flow Statement under each inventory costing method. Explain the differences in Net Income under each inventory costing method. Notes: Operating Expenses and taxes were paid in cash. The company's beginning cash balance was $1,200. Cost of Goods Available For Sale Unit Total Units Price Cost Beginning Inventory 150.0 15.0 First Purchase (cash) 100.0 16.0 Second Purchase (cash) 190.0 17.2 Total Cost of Goods Available for Sale Weighted Average Cost Cost of Goods Available For Sale Unit Total Units Price Cost Beginning Inventory 150.0 15.0 First Purchase (cash)…
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LIFO (perpetual) Inventory Cost of Goods Purchased Cost of Goods Sold Cost of Inventory Remaining Numberof units Unit Cost Total Cost Numberof units Unit Cost Total Cost Numberof units Unit Cost
Required information [The following information applies to the questions displayed below.] Hemming Company reported the following current-year purchases and sales for its only product. Activities Beginning inventory Sales Purchase Sales Purchase Sales Purchase Totals Date January 1 January 10 March 14 March 15 July 30 October 5 October 26 a) Cost of Goods Sold using Specific Identification Available for Sale Date January 1 March 14 July 30 October 26 Less: Equals: Activity Beginning Inventory Purchase Purchase Purchase b) Gross Margin using Specific Identification # of units Units Acquired at Cost 300 units @ $14.00 = @ $19.00 = @ $24.00 = @ $29.00 = 300 520 500 200 1,520 520 units 500 units 200 units 1,520 units Ending inventory consists of 50 units from the March 14 purchase, 80 units from the July 30 purchase, and all 200 units from the October 26 purchase. Using the specific identification method, calculate the following. Cost Per # of units Unit sold MITSTRA 480 units @ $44.00 @…
Current Attempt in Progress Assume that Pharoah Company uses a periodic inventory system and has these account balances: Purchases $392,700, Purchase Returns and Allowances $12,300, Purchase Discounts $8,800, and Freight-In $15,300. Determine net purchases and cost of goods purchased. Net purchases Cost of goods purchased $ $ I
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Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales for Item ER27 are as follows: May 1 Inventory 72 units @ $17 9 Sale 58 units 13 Purchase 76 units @ $19 28 Sale 22 units Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on May 28 and (b) the inventory on May 31. a. Cost of merchandise sold on May 28 b. Inventory on May 31
Determining the Beginning and Ending Inventory from a Partial Spreadsheet: Periodic Inventory System From the following partial spreadsheet, indicate the dollar amount of beginning and ending merchandise inventory to be used to compute cost of goods sold. ADJUSTMENTS ADJUSTED TRIAL BALANCE ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT Merchandise Inventory Estimated Returns Inventory Supplies Prepaid Insurance Customer Refunds Payable Income Summary 60,000.00 55,000.00 60,000.00 6,000.00 5,500.00 6,000.00 4,700.00 3,300.00 1,600.00 3,800.00 2,200.00 7,200.00 55,000.00 60,000.00 55,000.00 60,000.00 5,500.00 6,000.00 5,500.00 6,000.00 Sales Sales Returns and Allowances 525,140.00 2,200.00 16,700.00 Beginning inventory 55,000 x Ending inventory 60,000 x
Perform the vertical Financial Statement Analysis of Income Statement

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