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 5.6ME
Mini-Exercise 5.6
LO 7, 8
Cost flow assumptions-FIFO and LIFO using a periodic system The beginning inventory was 600 units at a cost of $20 per unit. Goods available for sale during the year were 2,600 units at a total cost of $57,600. In May, 1,200 units were purchased at a total cost of $26,400. The only other purchase transaction occurred during October. Ending inventory was 1,100 units.
Required:
- Calculate the number of units purchased in October and the cost per unit purchased in October.
- Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system):
- FIFO
- LIFO
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Cost flow methods
The following three identical units of Item P401C are purchased during April:
Item Beta Units Cost
Apr. 2
Apr. 15
Apr. 20
Total
Average cost per unit ($360 ÷ 3 units)
Purchase
1 $100
Purchase
1
120
Purchase
1
140
3
$360
$120
Assume that one unit is sold on April 27 for $300.
Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c)
weighted average cost method.
Gross Profit
Ending Inventory
a. First-in, first-out (FIFO)
$
b. Last-in, first-out (LIFO)
c. Weighted average cost
$
69
69
Cost flow methods
The following three identical units of Item P401C are purchased during April:
Apr. 2
Apr. 15
Apr. 20
Total
Average cost per unit ($348 ÷ 3 units)
Item Beta Units
Cost
Purchase
1
$114
Purchase
1
116
Purchase
1
118
3
$348
$116
Assume that one unit is sold on April 27 for $159.
Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-ou
and (c) weighted average cost method.
a. First-in, first-out (FIFO)
b. Last-in, first-out (LIFO)
c. Weighted average cost
Gross Profit
Ending Inventory
$
$
$
Cost Flow Methods
The following three identical units of Item P401C are purchased during April:
Item Beta
Units
Cost
April 2
Purchase
1
$100
15
Purchase
1
120
20
Purchase
1
140
Total
3
$360
Average cost per unit
$120
($360 ÷ 3 units)
Assume that one unit is sold on April 27 for $300.
Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method.
Gross Profit
Ending Inventory
a. First-in, first-out (FIFO)
$
$
b. Last-in, first-out (LIFO)
$
$
c. Weighted average cost
$
$
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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